(Bloomberg) — Apple Inc.’s latest iPhones are selling at over $100 discounts in China, an unusually steep price drop just months after launch that suggests a drop in demand even for its devices the most upscale.
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JD.com Inc. and common carrier China Mobile Ltd. are among the retailers taking 800 yuan ($118) off the iPhone 14 Pro lineup over 11 days. Retailers in Shenzhen’s southern electronics center have also started slashing prices of the same handsets by 700 yuan, the China Securities Official Journal reported after visiting outlets in the city. Apple’s local website, meanwhile, continued to offer devices at regular prices.
The discount appeared towards the end of the Lunar New Year season, when retailers gear up for a holiday shopping spree before schools reopen. While it’s unclear how long the cuts could persist, they point to weak demand in the world’s biggest smartphone market, just as Apple is counting on a recovery in China. Unusually, the discounts of around 7% to 9% on the iPhone Pro range reflected the bargains on offer on lower-end models, which are usually discounted first.
“The discount appears larger than what we found in January, which was 3% to 4%,” analysts at Jefferies led by Edison Lee wrote in a Sunday research note. “We see this as a sign of weak demand.”
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An Apple representative did not immediately respond to a request for comment.
Apple reported its first quarterly revenue decline since 2019 last week, blaming production disruptions at its biggest manufacturing partner in China as well as pulverized global demand. But CEO Tim Cook pointed to a rebound in the Chinese market, which had only just abandoned tough Covid-19 restrictions that hammered the economy.
Still, smartphone sales are expected to contract again in 2023 after falling last year, companies such as Samsung Electronics Co.
Although Cupertino, Calif.-based Apple didn’t provide a detailed outlook for the current quarter, it said its performance would mirror that of the December period. That suggests a drop in revenue of around 5% could be on the cards, although the company said iPhone revenue would accelerate in the March quarter.
Sales of the four iPhone 14 models in their first 38 days in the Chinese market fell 28% compared to the iPhone 13 family, Jefferies analysts estimated.
Read more: Apple rebounds as investors look past sluggish holiday quarter
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