Apple looks to boost sales in China with hefty discounts as e-commerce festival gets underway

To compete with local manufacturers like Huawei, Apple is providing significant discounts on iPhones in China during the 618 shopping holiday.

JD.com and Alibaba’s Tmall have been offering various iPhone models at discounts of up to 20% since the 618 festival began on Monday.

Apple’s 256-gigabyte iPhone 15 Pro Max was selling for 7,949 yuan (US$1,120), down from the original price of 9,999 yuan, a substantially greater discount than reported in February.

Tmall and JD.com are two of Apple’s sales channels in the country that frequently provide discounts during the mid-year 618 shopping festival.

Alibaba said that this year’s event will have two sales periods: May 20 to May 28, and May 31 to June 20.

According to Apple’s website, Chinese shoppers can save up to 6,100 yuan on the iPhone 15 by trading in an iPhone 11 or later edition.

While the promos coincide with the shopping festival, Le Xuan Cheiw, an analyst at technology industry research firm Canalys, told CNBC that the large discounts are also likely due to decreasing iPhone sales.

“Apple’s second price cut in 2024, following the first in February, aims to boost sales and counteract Huawei’s resurgence,” he added, stressing that previous price cuts have increased sales momentum.

The firm has been facing challenges in China, one of its main customers, since Chinese telecoms provider Huawei unveiled new smartphone models late last year that used advanced technology that the US had sought to prevent the company from obtaining.

According to Canalys data, Apple’s sales in China fell 25% year on year in the first three months of this year, and its market share fell from 20% to 15% during the same period.

Meanwhile, Huawei launched the Pura 70, a new line of high-end smartphones, last month as another challenger to the iPhone.

Despite the challenges in China and a 10% drop in global iPhone sales in the March quarter, the business has managed to sustain investor confidence following an earnings beat and large stock buyback earlier this month.

Apple also increased its gross profit margin by 46.6% in the quarter, thanks in large part to its burgeoning services division, with the company forecasting sales growth in the current quarter.