Apple Joins China Subsidy Program in Effort to Counter Declining Sales

[Johnny907]

The real story here is that china had to introduce government subsidies on cellphones in the first place to combat declining sales.
Have a feeling the CCP is going to be dealing with some insane inflation in the near future to cover for all the money they’ve had to print to keep these subsidies flowing, and it will be interesting to see how the domestic and international markets react to that.

 

[ProbablyDylan]

We don't need to be subsiding cellphones in the "western world", nor does Apple need subsidy help from China; they could just lower the price.

Why not?

We already (currently) do with electric cars and some high-efficiency appliances. I got a $3000 cash rebate from my power company for moving to a heat-pump, on top of a federal tax rebate.

The problem with rebates is that they require an upfront investment from the consumer, something very many Americans (for example) just don't have. Credit isn't always an ideal option either for a lot of people. On the other hand, lowering the upfront price would make these products more accessible to those consumers while still benefiting the people who could have afforded them anyway.

 

[russell_314]

Crazy that China has consumer subsidies for things like smartphones. Seems that this same program also applies to electric vehicles and high-quality high-efficiency home appliances. The western world could learn a thing or two from these programs!

Umm I live in the “western world” USA and we have EV subsidies. I’m not a big fan of them but sometimes they’re beneficial.

 

[russell_314]

Not that crazy for a surveillance state to go out of its way to ensure everyone has a virtual wiretap in their pockets.

The USA doesn’t need to go out of their way to make sure of that. I mean other than the few government subsidized phones most people willingly give up their privacy to catch VR creatures… We have to catch them all! 😂

 

[Michael Scrip]

I wonder how tech will respond to the fact that that we no longer need to upgrade every year. even as a Designer, the iphone or MBP last longer than 3-4 years unless there are major benefits in speed or camera quality. Why keep paying for 1600 dollar phones each year?

Most people don't upgrade every year.

People were used to two-year cycles for a long time. But now people are keeping phones even longer.

 

[Scipster]

Wait, why can't we subsidize Apple products in the US? I would love subsidies!

 

[simply258]

Is there a catch? How does it benefit the government? Subsidizing electric cars you can say has environmental benefits in the long run, but phones?

 

[Agent007]

Why has folding now become the latest make-it or break-it feature?

Because folding allows for much larger screens on portable devices. The obvious downsides are durability and cost but only until foldables evolve over a few more years. Personally, I don't want one yet. I don't think foldables will take over - I think the single-screen bar will remain king...until Jony Ive and Sam Altman change the world with their revolutionary new device🥱

 

[Scipster]

Is there a catch? How does it benefit the government? Subsidizing electric cars you can say has environmental benefits in the long run, but phones?

Personally, I'd be more in favor of voting for politicians that are willing to subsidize Apple products because it benefits me. Happy constituents = ability to remain in power. I'm not sure how voting works in China, but I imagine the government there would like to remain in power.

 

[Dr McKay]

How about drop the price and add usable features?

Unless they start adding a tonne of China specific features that the West largely doesn’t care about then I doubt it’ll make much of a difference. It’s why Oneplus split their ROMs and ship OxygenOS in the west which is very close to stock Android, and ColorOS on Chinese models filled with features to cater to that user base.

 

[russell_314]

Is there a catch? How does it benefit the government? Subsidizing electric cars you can say has environmental benefits in the long run, but phones?

I’d say it helps the economy when people spend money. One could argue that the short term benefits are outweighed by long term negatives but that’s a decision politicians make.

 

[JPack]

Why has folding now become the latest make-it or break-it feature?

Everybody wants an iPad. Why do you think iPad sales are second only to iPhone?

 

[svish]

Interesting to see whether this will help to boost the sales. Maybe reducing the price of device might help Apple even more.

 

[NewOldStock]

Greed shows its ugly head time and time again.
When the poor can not afford to pay the rich for products.
Fair prices be damned.

 

[CapitalIdea]

Crazy that China has consumer subsidies for things like smartphones. Seems that this same program also applies to electric vehicles and high-quality high-efficiency home appliances. The western world could learn a thing or two from these programs!

We already have these programs, but it’s for ethanol and dairy among other things.

 

[Octavius8]

China government gives subsidies for apple products?!. How about USA lift the ban on Huawei for some devices at least???.

 

[BuffaloTF]

Everybody wants an iPad. Why do you think iPad sales are second only to iPhone?

I think you just made the strongest argument on why Apple isn’t, and likely shouldn’t be, making a foldable device.

 

[JPack]

I think you just made the strongest argument on why Apple isn’t, and likely shouldn’t be, making a foldable device.

I'm sure Apple wanted to sell two separate devices in 2007: iPhone and iPod. Guess what happened?

In the early 2010s, Apple wanted to sell two devices to everyone: big iPad and small iPhone. They deliberately held back on phablets until the Samsung Note series gained so much traction. Then iPhone 6/Plus happened.

Same thing with iPhone XR. Chinese manufacturers were making and selling so many 6.1-inch LCD phones, Apple had to join the game. Apple didn't want to use LCD or make XR bigger than XS.

 

[HighwaySnowman]

Wait, why can't we subsidize Apple products in the US? I would love subsidies!

Oh, we have subsidies here. They just go directly to Apple. Can't have actual humans benefiting from corporate welfare!

 

[amartinez1660]

Why not?



The problem with rebates is that they require an upfront investment from the consumer, something very many Americans (for example) just don't have. Credit isn't always an ideal option either for a lot of people. On the other hand, lowering the upfront price would make these products more accessible to those consumers while still benefiting the people who could have afforded them anyway.

Very well said.

It reminds me how here in Canada EV tax credits rebates and subsidies were all the rage… during the years no EV car was affordable enough.

So here we have the government giving subsidies to someone that could reach for a $50K or more Tesla while the people on bus, subway and bicycles (that could maybe at most afford a $15K used Toyota) are also subsidizing that through their taxes.

 

[Unregistered 4U]

Crazy that China has consumer subsidies for things like smartphones. Seems that this same program also applies to electric vehicles and high-quality high-efficiency home appliances. The western world could learn a thing or two from these programs!

Here’s another thing that’s surprising to me… This is China trying to show that they treat non-China based companies the same as China based companies. Another region could learn from this. Well, not really, as that OTHER region, unlike China, has no tech companies to speak of. So, they have no way to show they’re treating a non-region tech company like a region one.

 

[Unregistered 4U]

Why has folding now become the latest make-it or break-it feature?

When they’re being manufactured fast enough and reliable enough and desirable enough for Huawei to be able to ship, say, 50 million in a year, THEN they’ll be closer to being a make-it or break-it feature. The ENTIRE folding market is just shy of 18 million a year. If Apple were to release a folding ANYTHING, they’d sell that many in the first weekend it’s available and several tens of millions for several weeks after that.

It’s easy to toot your horn when selling 5 million units is considered a runaway success. Apple selling 5 million would be in the first 4 seconds of the preorder period.

 

[Unregistered 4U]

I wonder how tech will respond to the fact that that we no longer need to upgrade every year. even as a Designer, the iphone or MBP last longer than 3-4 years unless there are major benefits in speed or camera quality. Why keep paying for 1600 dollar phones each year?

Tech doesn’t need to respond to it. Tech realizes there are 8 billion people in the world and, while some may buy a phone every year, the number of people that DON’T own a phone made within the last 12 months is EASILY many times greater than those that DO own a phone made within the last 12 months.

Will that fact stop people from thinking that, just because THEY buy a new phone every year, that the entire cellphone world is just the same few hundred million folks buying phones over and over again every year? No, people will still think that and wonder how the tech world is going to respond to something that’s not happening.

 

[Unregistered 4U]

The real story here is that china had to introduce government subsidies on cellphones in the first place to combat declining sales.
Have a feeling the CCP is going to be dealing with some insane inflation in the near future to cover for all the money they’ve had to print to keep these subsidies flowing, and it will be interesting to see how the domestic and international markets react to that.

Interesting point, thanks for the info!

 

[Unregistered 4U]

I’d say it helps the economy when people spend money. One could argue that the short term benefits are outweighed by long term negatives but that’s a decision politicians make.

China has HUGE app stores and those companies charge up to 50% or more commission, so a lot of revenue on the back end is just a bonus on top of helping citizens own the means of digital acquisition.