Apple Offers Rare Discounts on Flagship iPhone in China Amid Intensifying Competition and Lack of AI Features

Wallstreet InsightThursday, Jan 2, 2025 4:08 am ET

1min read

Apple is offering rare discounts of up to 500 yuan ($68.50) on its latest iPhone models in China as the tech giant moves to defend its market share against rising competition from domestic rivals like Huawei and Xiaomi. And also to attract Chinese consumers who are upset about being unable to experience the latest AI features due to regulatory hurdles.

The four-day promotion, running from January 4-7, applies to several iPhone models when purchased using specific payment methods, according to Apple's website. The flagship iPhone 16 Pro, with a starting price of 7,999 yuan, and the iPhone 16 Pro Max, with a starting price of 9,999 yuan, will see the highest discount of 500 yuan (~$70). The iPhone 16 and iPhone 16 Plus will receive a 400 yuan reduction (~$50).

These discounts come as consumers remain cautious with spending amid overall slowing economy and deflationary pressures. Although Apple has released its first AI-embedded iPhone, Chinese consumers cannot experience it firsthand due to regulatory hurdles. Many expect Apple to debut the Apple Intelligence in China as early as April. Due to the ban on ChatGPT in mainland China, Apple may need to work locally, potentially partnering with Tencent, Alibaba, or Bytedance.

In addition, local manufacturers have intensified competition. Huawei has emerged as a particularly strong challenger since its return to the premium segment in August 2023 with locally-made chipsets. Huawei had cut the prices of a variety of high-end devices, including mobile phones, by up to 3,000 yuan over the weekend on one of China's leading e-commerce platforms.

Apple briefly fell out of China's top five smartphone vendors in the second quarter of 2024 before recovering in the third quarter. The U.S. company's smartphone sales in China still slipped 0.3% during the third quarter from a year earlier, while Huawei's sales surged 42%, according to research firm IDC.

The Apple promotion also includes discounts of 200 to 300 yuan on older iPhone models, as well as other categories of products such as MacBook laptops and iPad tablets. Customers must use designated payment methods, including WeChat Pay or Alipay, to qualify for the discounts.

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