Apple's Latest iPhones Sell at Rare $100-Plus Discounts in China

In Business
2023-02-06 01:41:00Z
By Bloomberg

(Bloomberg) -- Apple Inc.'s latest iPhones are selling at discounts of more than $100 in China, an unusually steep price cut just months after launch that suggests dwindling demand for even its highest-end devices.

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JD.com Inc. and state carrier China Mobile Ltd. are among the retailers taking 800 yuan ($118) off the iPhone 14 Pro range over 11 days. Retailers in the southern electronics hub of Shenzhen have also begun cutting prices for the same handsets by 700 yuan, the official China Securities Journal reported after visiting outlets around the city. Apple's own local website, meanwhile, continued to offer devices at regular prices.

The discounting emerged around the end of the Lunar New Year season, when retailers gear up for a holiday shopping spree before schools reopen. While it's unclear how long the cuts may persist, they point to weak demand in the world's largest smartphone arena just as Apple is counting on a recovery in China. Unusually, the roughly 7% to 9% discounts on the iPhone Pro range mirrored bargains offered on lower-end models, which typically get cut first.

"The discount seems bigger than what we found in January, which was 3%-4%," Jefferies analysts led by Edison Lee wrote in a Sunday research note. "We see that as a sign of weak demand."

Apple Buyers Willing to 'Stretch' for Pricier iPhones: Power On

An Apple representative didn't immediately respond to a request seeking comment.

Apple last week reported its first quarterly revenue decline since 2019, blaming output disruptions at its biggest manufacturing partner in China as well as sputtering global demand. But Chief Executive Officer Tim Cook pointed to a rebound in the Chinese market, which had only just dropped strict Covid-19 restrictions that hammered the economy.

Still, smartphone sales are likely to contract again in 2023 after a decline last year, companies including Samsung Electronics Co. have warned.

While Cupertino, California-based Apple didn't provide a detailed outlook for the current quarter, it said its performance would mirror that of the December period. That suggests a revenue decline of about 5% could be on the cards, though the company has said iPhone revenue would accelerate in the March quarter.

Sales of the four iPhone 14 models over their first 38 days on the Chinese market were down 28% compared with the iPhone 13 family, Jefferies analysts have estimated.

Read more: Apple Rebounds as Investors Look Past Sluggish Holiday Quarter