Apple has had to make some changes to stay in the Chinese game.
Apple has cut the prices of some of its products on its official Chinese website, following a 3% sales tax cut that was implemented on April 1st.
CNN reports that the reduction of the value-added tax cut affected the prices of Apple products, some by even more than 3%. According to the news site, the iPhone XS 64GB is now 8,199 yuan ($1,220) or 500 yuan ($74) cheaper in China. The price of an iPhone XR has also lowered by 300 yuan ($45).
In January, Apple’s CEO, Tim Cook, warned investors that the worsening economic conditions in China managed to negatively affect iPhone sales in 2018. Due to this, Apple lowered the prices of its iPhones in some non-US markets in order to ‘offset’ the US dollar. However, CNN also says that the iPhone had already been ‘struggling’ in the Chinese markets, even before China’s economy slowed down. Market research firm IDC says that for the last three years, iPhone sales in China have already been declining. In fact, it ended last quarter with a 20% decline. This is mostly due to the strong competition that Apple faces in China, thanks to local rivals such as Xiaomi, Huawei, Oppo, and Vivo, all of which offer “cheaper, high-end smartphones tailored for the Chinese market.”
IDC analyst Kiranjeet Kaur says, “Even with this price reduction, these iPhones are still more expensive than the competing ones from those such as Huawei.” It’s still a rather large market for the tech giant though, since 15% of Apple’s total sales come from China.