The latest round of iPhone price cuts on China have accomplished their goal, according to an analyst with Wedbush. Demand for Apple handsets has increased in that country.
That’s very good news for the company, as CEO TIm Cook said early this year that slow sales in China were the entire reason Apple saw a revenue decease at the end of 2018.
“As we have discussed with investors, it has been Apple’s pricing hubris on iPhone XR that was the major factor in the company’s December earnings debacle in China,” wrote Wedbush analyst Daniel Ives in a note to investors this morning. “However with some recent price cuts demand trends are slowly turning around in this all-important region for Cupertino.”
China causing headaches for iPhone sales
In January, Apple revealed that during the last quarter of 2018 it had experienced a year-over-year decline in revenue, the first time that had happened since before the original iPhone launch.
At the time, Cook said, “Most of our revenue shortfall to our guidance, and over 100 percent of our year-over-year worldwide revenue decline occurred in Greater China across iPhone, Mac, and iPad.”
In hopes of fixing the problem, Apple cut the prices on multiple devices in China. The costs of iPhones and iPads to Macs and AirPods have been reduced by up to 6 percent.
Wedbush’s Ives says these cuts should spur 60 million to 70 million iPhone users in China to upgrade over the next 12 to 18 months. But the analyst wants further price reductions, dropping the cost of the iPhone XR by 20 percent.
Apple’s share price is up today on this news. It’s working on its tenth-straight day of increases, something that hasn’t happened for many years.