Why Apple is Offering Unusual iPhone Discounts in China

Shoppers in China are receiving rare discounts on iPhones as Apple contends with rising competition from local brands. Starting this Saturday (4 January), a four-day promotion will offer discounts of up to 500 yuan ($68.50, £55.30) on some of Apple’s newest iPhone models.

In response to this, Chinese phone manufacturer Huawei has also reduced prices on its high-end devices by up to 20%. The discounts come amid consumer hesitancy to spend, as China grapples with ongoing economic challenges. The promotion includes discounts on both Apple’s latest flagship phones and older models, as well as other devices.

The largest discount of 500 yuan will apply to the iPhone 16 Pro, which is priced starting at 7,999 yuan, and the iPhone 16 Pro Max, which currently costs 9,999 yuan. Apple ran a similar promotion in China last year ahead of the Lunar New Year holiday, which this year falls at the end of January.

“Apple’s strategy has shifted to align with changes in Chinese consumers’ shopping habits,” said Will Wong, senior research manager at market intelligence firm International Data Corporation (IDC). “With a growing value-seeking trend, price discounts are becoming more attractive. If Apple doesn’t adjust its pricing strategy, it risks falling behind competitors.”

These discounts from Apple and Huawei are part of a broader trend in China, where businesses across various sectors—from online retail giants to car manufacturers—are offering deals to attract customers in the face of a slowing economy. Last year, Beijing introduced a trade-in program to encourage consumers to replace old items such as cars and home appliances. This initiative was expanded on Friday to include mobile phones, tablets, smartwatches, and fitness bands.

Apple’s market share in China has come under increasing pressure from local rivals like Vivo and Xiaomi. In the third quarter of 2024, Apple reentered China’s top five smartphone makers after briefly dropping out. IDC’s latest research shows that Vivo led the market during this period, with sales rising more than 20%. Meanwhile, Apple’s sales dipped by 0.3%, and Huawei’s sales surged by over 40%.

“The competition has intensified, with nearly every major player releasing a flagship in the last quarter,” said Ivan Lam, senior analyst at Counterpoint Research. Huawei has seen strong demand for its products since returning to the premium smartphone market in August last year, despite facing US restrictions. The company has launched several new devices featuring advanced technology.