An advertisement for the Huawei Pura70 mobile phone is displayed in front of an Apple Store on Nanjing Road Pedestrian Street in Shanghai, China, May 15, 2024.
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apple The company is offering deep discounts on iPhones in China to boost sales amid stiff competition from local brands such as Huawei as promotions for China's 618 shopping festival get underway.
Chinese e-commerce marketplaces JD.com and Alibaba's Tmall have been selling select iPhone models at discounts of up to 20 percent since their 618 festival promotions began on Monday.
Apple's 256GB iPhone 15 Pro Max is on sale for 7,949 yuan ($1,120), down from an original price of 9,999 yuan, a significant reduction from the price reported in February.
Tmall and JD.com are some of Apple's sales channels in China and regularly offer discounts during the annual 618 shopping festival.
This year's event will include two sale periods, from May 20 to May 28 and May 31 to June 20, according to a statement from Alibaba.
According to Apple's website, the company is offering Chinese buyers a discount of up to 6,100 yuan on the iPhone 15 if they trade in an iPhone 11 or newer model.
Le Xuan Cheayeu, an analyst at technology market research firm Canalys, told CNBC that while the promotion coincides with a shopping festival, the steep discounts are also likely linked to sluggish iPhone sales.
“Following the first price cut in February, the second price cut in 2024 is aimed at boosting sales and countering a resurgent Huawei,” he said, noting that previous price cuts had boosted sales momentum.
Chinese telecoms equipment giant Huawei has been facing headwinds in China, one of its biggest markets, since late last year it launched new smartphones equipped with advanced chips to which the United States tried to restrict the company's access.
In the first three months of this year, Apple's sales in China fell 25% year-over-year, with its market share falling from 20% to 15% over the same period, according to data from Canalys.
Meanwhile, last month, Huawei unveiled a new series of high-end smartphones, the Pura 70, as a new challenger to the iPhone.
But despite struggles in China and a 10% drop in global iPhone sales in the March quarter, the company has managed to maintain investor confidence with better-than-expected profits and a big share buyback earlier this month.
Apple also expanded its quarterly gross margin by 46.6% due to growth in its services business, signaling revenue growth in the current quarter.
