This week Apple dropped prices on some of its product lines in China. These products include Macs, iPads, AirPods, and the iPhone. Many ask why, but it is believed that the price drop could be a result of the 3% tax cut that took effect in China recently.
In some cases, the prices have even dropped further. For instance, there is a 500 yuan, or $74 or 6% drop on the iPhone XS (Apple’s flagship phone).
The Apple price drop may also be a result of the decrease in demand for the Apple iPhone in China. The country remains the largest smartphone market in the world and smartphone companies whose products are suffering in China will experience serious market challenges. Recently, Apple even blamed its lower than expected earnings on weak iPhone demand in China.
The handset’s revenue dropped 15 percent year-over-year in Q1, with China taking center stage. Among the factors are slowed economic growth in the country and flagging global smartphone sales, as users upgrade their devices less frequently.
Chinese companies like Huawei are gaining a strong foot in China and Apple will have to deal with that. Huawei now ranks as a top seller of smartphones across the world. In all, however, more competition is sometimes good.
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