Apple cuts iPhone 14 prices in China by up to US$125, making rare sales push following quarterly revenue drop

Apple’s stores on JD.com offered discounts of up to 10.6 per cent, while bricks-and-mortar shops in Shenzhen sold out of some models
The price cuts come after Apple reported a 5 per cent year-on-year decline in revenue to US$117 billion for the last quarter of 2022

Apple

Iris Dengin Shenzhen

Published: 2:39pm, 6 Feb 2023

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Apple merchants in China are cutting prices for iPhone 14 models by up to 850 yuan (US$125) to boost sales, after the US tech giant reported a revenue decline in the December quarter because of supply-chain disruptions under Covid-19 controls and weak demand in the world’s biggest smartphone market in 2022.

Apple’s online stores on JD.com, China’s second largest e-commerce platform, showed a markdown of 800 yuan for the iPhone 14 Pro and Pro Max models on Monday, with an additional 50 yuan off if the buyer became a member of the online store. That works out to 10.6 per cent off the 7,999 yuan price of the 128-gigabyte iPhone 14 Pro.

Bricks-and-mortar resellers have also offered price cuts ranging from 600 to 800 yuan, with some of the most popular models sold out already. Shenzhen outlets of Chinese retail giant and authorised Apple reseller Suning were sold out of iPhone 14 Pro models with storage of 256GB or more on Monday, soon after the 800-yuan markdown was offered during the weekend, according to a sales representative.

Local Shenzhen retail chain Sundan offered a 650-yuan price cut starting on Sunday and has run out of inventory for both the Pro and Pro Max models with large storage, an employee said on Monday.

Apple CEO Tim Cook pictured at a release event for the Apple iPhone 14 range in New York City on September 16, 2022. Photo: Reuters

Meanwhile, the prices on Apple’s official website and offline stores in China remained unchanged as of noon Monday, in general indicating a sufficient stock level with instant online delivery or offline pickup promised.

The price reductions come at a time when China’s domestic smartphone sales have dropped below 300 million for the first time in a decade, falling 13.2 per cent to 285.8 million in 2022, compared with 2021, according to market research firm IDC.

The price cuts in China also arrive just days after California-based Apple reported poor quarterly earnings, blaming supply disruptions from China’s pandemic controls. The company on Thursday reported a 5 per cent year-on-year drop to US$117 billion in revenue for the quarter ended December, marking its first quarterly revenue decline since early 2019.

02:23

iPhone 14 delays expected after days of violent protests at Foxconn Zhengzhou factory

“Covid-19 challenges … significantly impacted the supply of iPhone 14 Pro and iPhone 14 Pro Max and lasted through most of December,” Apple chief executive Tim Cook said during an earnings call, citing a November notice when the company warned that restrictions forced its major iPhone factory in Zhengzhou, capital of central Henan province, to operate “at significantly reduced capacity”. Cook added that the production is now back on track.

Foxconn Technology Group, which runs the world’s biggest iPhone factory in Zhengzhou, was rocked by an exodus of tens of thousands of employees and violent workers’ protests amid a Covid-19 outbreak that began in late October, and the company has been striving to reboot production by offering fat bonuses to workers.

Taiwan-based Foxconn, officially known as Hon Hai Precision Industry, said on Sunday its revenue jumped 48.2 per cent in January to reach a record high of NT$660.4 billion (US$22 billion), as operations in China returned to normal.

Employees during lunchtime at a Foxconn Technology Group plant in Zhengzhou, Henan province, China, on January 6, 2023. Photo: Bloomberg

Last year, Apple faced weakened consumer demand in China, as its full-year smartphone shipments hit a 10-year low at 287 million units, according to a report by Canalys. Apple reached a record-high market share of 18 per cent to rank third in China in 2022, but in the fourth quarter, traditionally a sales season, iPhone shipments declined 14 per cent year-on-year, the Canalys report showed.

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