iPhone 15 Sales in China Increasingly Dependent on Promotions

[MacRumors]

Apple resellers in China are offering discounts on iPhone 15 models by as much as $180, indicating an unusually lengthy drop in demand, reports Bloomberg.

According to the media outlet, Alibaba's Tmall is trying to drive sales of the premium handsets by offering them at less than the roughly $120 discount Apple offered around the same time last year.

The discounts follow Apple's own rare price reductions on its website ahead of the Lunar New Year holiday in February. Apple has since returned to selling its iPhone 15 lineup at original prices.

The promotions indicate Apple's latest iPhone generation is struggling to achieve the same popularity of previous models in China. Apple sales in China dropped 13% to $20.8 billion in the quarter ended December, falling short of the $23.5 billion predicted by analysts.

Strong interest in Android phones with generative AI features are believed to be fueling the trend, which is expected to deepen throughout 2024. "The pressure was mainly coming from other Android vendors as we saw Apple decline by around 10% year-on-year in the month while Huawei grew triple-digits over the same period, IDC analyst Will Wong told Bloomberg.

Apple's next major software update,‌ ‌iOS 18, is expected to include a slew of new AI features, while some AI capabilities are rumored to be exclusive to upcoming iPhone 16 models. But it's unclear how game-changing the features will prove to be, and whether they will arrive in time to revive the slump in iPhone sales.

Article Link: iPhone 15 Sales in China Increasingly Dependent on Promotions

 

[kiranmk2]

After all the moaning about Apple phoning it in for the last few years of iPhone updates, this is likely going to show that the best way to effect change is to hit Apple in the wallet by not buying new, barely upgraded devices.

 

[Infodataset]

Dont worry for sales because new Siri Subscription is incoming 🤑

 

[Populus]

I’m not sure if this is something specific of the Chinese smartphone market, but if not, it’s an indicator that the regular iPhone maybe should decrease its price a bit. I think hitting the 1000€ mark for the regular iPhone, like the iPhone 14 already did on the European market, is a mistake. But we all know that, if Apple wants to contain the regular iPhone price, they will cut costs because the margins are untouchable. And, to be fair, the cost of some components may increase.

 

[desslr]

Sorry but I don’t think it is accurate to say AI has fuelled the Android boom at Apple’s expense. That is poor analysis.

The globe is going through a cost of living crisis, Chinese regulators are clamping down on Apple… and the hardware is barely changed from last year.

 

[Shirasaki]

When everyone wants to save as much money as possible due to uncertainty, and WeChat’s dominance, apple iPhone really isn’t as appealing as in US or other western countries.

 

[coffeemilktea]

Poor Tim Cook, he spends so much time and effort trying to appease the Chinese government, only for the iPhone to not do as well in China. 😢 He might have to do something really wild and extreme soon, like, you know... actually giving the iPhone enough genuinely interesting features that it can compete with Chinese smartphones.

...nah, that's crazy talk. 🤪

 

[AndiG]

AI is a disruptive technology, like the iPhone once was. And AI is a strong requested feature on the chinese market, companies like Honor are competing against each other and Apple is out - for the moment, but struggling to get back.

That's how you should look at a trillion-dollar company that only has one leg to stand on with the iPhone: In the blink of an eye, it could be over.

 

[Shirasaki]

Poor Tim Cook, he spends so much time and effort trying to appease the Chinese government, only for the iPhone to not do as well in China. 😢 He might have to do something really wild and extreme soon, like, you know... actually giving the iPhone enough genuinely interesting features that it can compete with Chinese smartphones.

...nah, that's crazy talk. 🤪

Tim Cook is Tim cook. I would not have sympathy on him regardless of his circumstances. On top of that, I think he alone cannot unilaterally decide the direction of iPhone, but that’s a different story.

 

[dbwie]

With the rise of nationalism more generally, I am also wondering if this has nothing to do with Apple, and more about Chinese consumers buying their own brands. Sorry, RE: politics but it could be a factor.

 

[2low_tech]

There is a lot of phone options In China. I am surprised sellers have managed to avoid steep discounts for this long.

 

[brofkand]

Sounds like people just don't want to pay the prices Apple is asking for their warmed over releases anymore. Time for some actual innovation, or some price cuts.

 

[dbwie]

AI is a disruptive technology, like the iPhone once was. And AI is a strong requested feature on the chinese market, companies like Honor are competing against each other and Apple is out - for the moment, but struggling to get back.

That's how you should look at a trillion-dollar company that only has one leg to stand on with the iPhone: In the blink of an eye, it could be over.

I think Apple worrying about having one leg to stand on, is a good way for them to think, to motivate them to keep innovating. However, they are in a much better position than Blackberry was in 2007. They have built an ecosystem, and not just a single product, and have resources to adapt to changes in the market. For example, they can endure taking losses for a period of time to get a completely different product to market. I have used ChatGPT and I don’t think it’s revolutionary. It doesn’t answer the questions that I want answers to. So Apple has time to get on that train and it sounds like they are. They have been doing machine learning stuff for a while. The most useful aspect of AI for me will be better voice recognition, but even that would not make me switch to another phone. Making deepfake photos and videos is more for propagandists than it will be for me.

 

[icanhazmac]

Not surprising.

1. Apple (or any other company) needs cheap labor, calls China
2. China promises (wink, wink) not to steal Apple's (or any other company) IP
3. China begins providing cheap labor for assembly, giggling the entire time as they steal IP
4. Chinese competitors (such as Huawei) open and begin making products with the aforementioned stolen IP at a lower price
5. CCP "encourages" the populous to buy Chinese products
6. Rinse and repeat
7. Profit

 

[coachgq]

I just bought a $100 iphone SE from walmart and traded that in for $800 of bill credits with T-Mo buying it from the apple store. Yea, I need to be with T-Mo for 2 more years to get the value, but I've been with them for 9 years. And they are still the cheapest by far for service. I then sold my 14 for $500. Incremental updates don't bother me if I'm paying $100 for the upgrades.

 

[Unami]

I've heard that the chinese market is highly flexible and customers don't have much brand-loyality. It makes sense that it had a popularity peak as a luxury item, but as it's newness and value (due to price increases and stagnant design) dininish, so will it's popularity. It'll probably be the same in the rest of the world unless they drop prices / innovate more this year.

 

[jrhop]

I’m not sure if this is something specific of the Chinese smartphone market, but if not, it’s an indicator that the regular iPhone maybe should decrease its price a bit. I think hitting the 1000€ mark for the regular iPhone, like the iPhone 14 already did on the European market, is a mistake. But we all know that, if Apple wants to contain the regular iPhone price, they will cut costs because the margins are untouchable. And, to be fair, the cost of some components may increase.

Yeah I think it is anywhere outside the US, they are priced too high. Amazon UK were doing iphone 15 for £649 a week or two back, got mine on 5 month 0% interest.

 

[DelayedGratificationGene]

Ya well next revolution in mobile tech with “iphone AI” Edge AI is on its way so your lack of Apple iPhone innovation concerns will be going away folks. Tim has basically pounding the table as emphatic as Apple could possibly be about “groundbreaking AI” so get ready for upgrades galore. Have a great day!

 

[erikkfi]

After all the moaning about Apple phoning it in for the last few years of iPhone updates, this is likely going to show that the best way to effect change is to hit Apple in the wallet by not buying new, barely upgraded devices.

Which we already knew, but we buy them anyway for some reason.

 

[Born Again]

Sounds like the Chinese see past the delusion that we fellow Americans believe that iPhones are a premium device that command a premium price!

Jfc there are members here that continue to compare their iPhones to a Ferrari and androids to a Honda.

Iphone is more like a Honda with lipstick. 💄

 

[j26]

Sorry but I don’t think it is accurate to say AI has fuelled the Android boom at Apple’s expense. That is poor analysis.

The globe is going through a cost of living crisis, Chinese regulators are clamping down on Apple… and the hardware is barely changed from last year.

What I'm reading is that the Chinese market is pivoting towards high end phones, and that the market phone overall is expanding again. Put the two together and it would suggest that the market for high end phones is expanding rapidly in China.
If Apple is dropping in a rising market, that's really not good news for them.

I do suspect that regulators, and probably some element of economic nationalism is at play here. Whatever it is, it seems Apple has gone off the boil in China.

I doubt AI is a big factor.

 

[ksec]

And China is the only places where Apple gives special pricing. Most if not all the countries have pricing that is basically US pricing @ Apple's fixed Exchange Rate + Import Tax + Sales Tax + Premium on certain laws and guarantees that does not exist in US.

And yet if you deduct Sales Tax and Import Tax, you will quickly find China has the cheapest iPhone. And China is the only county which Apple does not follow the normal pricing formula. One could even argued the rest of the world's iPhone are subsidising iPhone in China just to make up for Apple's Net Margin worldwide.

 

[Ameer_1]

Why doesn’t America have any deals like this all we get is monthly crap from different carriers that brainwash people. I rather pay for my iPhone instead of paying monthly. Apple is basically Toyota it’s the same design each year with nothing different.

 

[sw1tcher]

Sorry but I don’t think it is accurate to say AI has fuelled the Android boom at Apple’s expense. That is poor analysis.

The globe is going through a cost of living crisis, Chinese regulators are clamping down on Apple… and the hardware is barely changed from last year.

It's worse in China. They're still trying to figure out how to fix their real estate problems; It's hit the middle class hard.

China has been trying to get their citizens to spend to support their economy while trying to pivot their economy more to a consumption one, but when 70 percent of Chinese household wealth is tied up in real estate investments, that's not going to happen soon.

Then there's the high teen/young adult unemployment rate.

I suspect buying a new iPhone isn't very high on their priority list. Those that are in the market for a new phone are probably intrigued by the new AI-powered and foldable smartphones.

 

[twolf2919]

What I'm reading is that the Chinese market is pivoting towards high end phones, and that the market phone overall is expanding again. Put the two together and it would suggest that the market for high end phones is expanding rapidly in China.
If Apple is dropping in a rising market, that's really not good news for them.

I do suspect that regulators, and probably some element of economic nationalism is at play here. Whatever it is, it seems Apple has gone off the boil in China.

I doubt AI is a big factor.

Agree with everything the OP and @j26 have said - it's got nothing to do with AI. My in-laws are Chinese and we just visited Suzhou/Shanghai a few weeks ago. This is the first time we didn't need to bring new iPhones as gifts - our relatives didn't want them. The reason may surprise the reader: it was that the US iPhones no longer had SIM slots! eSIMs are not allowed in China! (although if you come into the country with an eSIM-equipped phone, it will work on the Chinese telecom networks). But beyond that, most of the folks there were very sympathetic towards Huawei because they felt the US/West had discriminated against the company on some trumped-up security grounds. That's why Huawei has been the main benefactor of the recent surge in smartphone sales in China. Together with Chinese government officials firing warning shots across US/Apple's bow by forbidding the use of iPhones in government buildings.

The Chinese live most of their mobile live in the WeChat and a couple other "super applications". So moving to another smartphone is pretty easy for them. The only 'loyalty' Apple's devices get is via the sale of wearables. And, of course, even today it's seen as more of a luxury item than the average Android phone.