Apple Inc. (AAPL, Financial) is making a smart move to tackle China's ultra-competitive tech market by slashing iPhone 16 Pro and Pro Max prices by up to 500 yuan. Consumers will be able to avail of these discounts between January 4-7 using WeChat Pay and Alipay in a strategic move to beat local rivals and in a cautious economic climate.
In the following years, China's tech market experienced much slower growth, deflation, and plunging consumer spending, a combination of factors that have constrained consumers' spending on premium brands like Apple. In early 2024, Apple lost some market share but still recovered by Q3 of that year despite a nominal annual decline in sales. In contrast, Huawei raked in a 42% sales rise on its use of domestically produced chips and sharp cuts on high-end devices.
Apple is also discounting other products beyond iPhones, including its older MacBooks and iPads. It signals the company's effort to muscle its way back to the top again in its second-largest revenue-making market.
The price cuts show how China's tech sector is flush with rivalry, both between domestic firms and foreign companies, many of whom are now catching up and, in some cases, even drawing ahead. Huawei's dominance and innovative strategies are a challenge for foreign brands, including Apple.
Beyond its economic slowdown, China's situation is also hitting some broader implications. This environment is building pressure on Western companies like Apple to become more price competitive and may also set the bar for global market strategy.
