iPhone discounts ease Apple’s pain in China only briefly

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China iPhone sales
Apple CEO Tim Cook meets with Apple Store employees in China.
Photo: Apple

Temporary price cuts in China offered only a temporary boost in iPhone sales, according to industry analysts watching how Apple would follow up dismal year-end figures in the depressed Chinese smartphone market.

To start 2019, Apple revealed unexpected revenue shortfalls, blaming it mostly on a sharp drop in demand for iPhones in China.

China iPhone sales: Discount worth a try

Apple attempted a rebound strategy to coincide with the Chinese New Year by slashing prices for the period of Jan. 11-30.

Though iPhone sales rose 83 percent for that period, the increase had little impact on projected unit shipments for the March quarter, according to a note by Rosenblatt Securities to investors obtained by the website Apple Insider.

Rosenblatt’s Jun Zhang told investors the price cuts “provided little benefit to iPhone sales in the Chinese market.” He put estimates of iPhone shipments no more than 39 million units for the quarter ending in March.

Apple likely had little confidence the price cuts would reverse withering growth. In an interview with NPR last month, Apple CEO Tim Cook responded to the plan with “We’ll see how that works out for us,”

The smartphone market in China was down more than 12 percent overall last year. Chinese brands performed well, but non-Chinese companies like Apple and Samsung accounted for more than 50 percent of the decline there. Many analysts say Chinese consumers view the iPhone as too expensive.

Smartphone sales have slowed worldwide because more people have them and a lack of new features provides little incentive for consumers to upgrade.

While Apple continues to innovate its line of hardware, the tech giant has been placing a greater emphasis on services like Apple Pay and music and video streaming.

In other Apple Insider report, Apple saw a drop in sales in Japan but continues as the dominant vendor there with 56 recent of the market share. Sharp is a distant second place with a 9.8 percent market share.

Source: AppleInsider