China re­tail­ers cut iPhone prices after sales warn­ing

Gulf Times Business - - BUSINESS -

Sev­eral Chi­nese elec­tron­ics re­tail­ers in­clud­ing Alibaba-backed Sun­ing and JD.com have slashed iPhone prices this week, after Ap­ple re­cently blamed poor sales of the smart­phone in the coun­try for a rare rev­enue warn­ing.

The dis­count­ing, as steep as $118 for the re­cently launched 64GB iPhone XR, is the lat­est sign that Ap­ple’s weak hol­i­day sales in China may have ex­tended to the cur­rent quar­ter.

The price cuts on iPhones by Chi­nese re­tail­ers be­gan in the mid­dle of this week, with at least six of­fer­ing pro­mo­tions this week­end, ac­cord­ing to checks done by Reuters.

Ap­ple did not re­spond to re­quests for com­ment.

Prices for iPhones sold through its Chi­nese web­site re­mained un­changed.

Such wide­spread price cuts are not un­com­mon around shop­ping fes­ti­vals like Sin­gle’s Day in Novem­ber, but these cuts stand out as they af­fect Ap­ple’s lat­est XS and XR mod­els that were re­leased only months ago, said Mo Jia, a Canalys an­a­lyst who tracks China’s smart­phone in­dus­try.

Jia be­lieves Ap­ple it­self could have low­ered prices of the phones it ships to dis­trib­u­tors, or that dis­trib­u­tors may have slashed rates in or­der to move more units.

“It’s pos­si­ble Ap­ple wants to test the mar­ket’s feed­back if it brings down the chan­nel prices.

Or, Ap­ple might be un­der pres­sure to clean out its stock of iPhones,” he said.

Ap­ple has been trail­ing lo­cal com­peti­tors such as Huawei Tech­nolo­gies Co Ltd that of­fer cheaper op­tions in China, home to the world’s big­gest smart­phone mar­ket in terms of ship­ment vol­ume.

Last week, Ap­ple is­sued its first rev­enue warn­ing in nearly 12 years, cit­ing poor Chi­nese de­mand, send­ing its shares down 10%, their big­gest in­tra­day fall in six years.

Sun­ing an­nounced yes­ter­day that it would start sell­ing the 64GB iPhone XR for 5,699 yuan, 800 yuan ($118.46) less than the de­vice’s sticker price in China.

It is also sell­ing the 64GB ver­sion of the iPhone 8 for 3,899 yuan, a 1,200 yuan dis­count.

JD.com, a ma­jor on­line seller of con­sumer elec­tron­ics, is of­fer­ing pro­mo­tions on mod­els go­ing back to the 8 se­ries.

Dang­dang, one of its ri­vals, has launched a sim­i­lar cam­paign.

Brick-and-mor­tar re­tailer GOME Re­tail Hold­ings has dis­counted a range of iPhone mod­els, while sev­eral au­tho­rised Ap­ple re­sellers on Tmall, a mar­ket­place run by e-com­merce gi­ant Alibaba, are set to of­fer discounts to­mor­row.

Qian Chao, a dis­trict man­ager for Shang­hai-based iPhone dis­trib­u­tor Dou­bleRise Bei­jing Tech­nol­ogy, said it was the com­pany’s de­ci­sion to make the price cuts and that it had not re­ceived any of­fi­cial no­tice from Ap­ple.

Ap­ple’s China woes come against the back­drop of a broader slow­down in de­mand for gad­gets across the tech sec­tor as the coun­try’s eco­nomic growth slows, ex­ac­er­bated by Bei­jing’s fes­ter­ing trade war with the United States.

Ac­cord­ing to govern­ment data, smart­phone ship­ments dropped 15.5% an­nu­ally in the coun­try in 2018.

Domestic Chi­nese brands, mean­while, have won over lo­cal con­sumers with a wide range of de­vices at com­pet­i­tive price points.

A new iPhone X is seen at an Ap­ple store in Bei­jing. Sev­eral Chi­nese elec­tron­ics re­tail­ers are dis­count­ing as steep as $118 for the re­cently launched 64GB iPhone XR.

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