Apple's China problem is only getting worse, even after those recent iPhone discounts

Apple's China problem is only getting worse, even after those recent iPhone discounts
While Apple rarely offers actual iPhone discounts in markets like the US, the company's recent Chinese struggles made price cuts on 2017 and 2018 iOS mobile devices pretty much inevitable. We're not (just) talking about trade-in deals, mind you, but also savings offered to local consumers with absolutely no strings attached or convoluted terms and conditions via major third-party retailers like JD.com and Tmall.

At first, these price reductions reportedly did the trick, significantly boosting iPhone sales between January 11 and 30, but in the long run, analysts quoted by AppleInsider today don't expect any positive impact on the company's regional or global market share. Specifically, Rosenblatt Securities still predicts worldwide shipments of between 38 and 39 million iPhone units in the January - March 2019 quarter, possibly followed by 33 to 34 million in the April - June timeframe, which is actually lower than what the research firm previously anticipated.

Even though it's true that overall mobile device sales in China have been steeply declining of late, with that worrying trend set to continue throughout 2019, Apple's problem is not entirely related to the general state of the industry. In January, the Cupertino-based tech giant and arch-rival Samsung together accounted for a massive 50 percent year-on-year drop in shipments, while the market as a whole was down just 12.8 percent.

It's fairly obvious that iPhone prices are still not low enough to make a dent in Huawei, Oppo, or Vivo's sales numbers, especially as the trade war between the US and China continues to heat up, stirring patriotic emotions in the latter's population. It remains to be seen if Apple is willing to further lower its notoriously high profit margins to try to gain a foothold in key markets like China and India.

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22 Comments

1. cncrim

Posts: 1515; Member since: Aug 15, 2011

No surprise here. 33-38M phone ship is still quite impressive. The problem is investors will not happy, it is normal cycle of public company, and natural human greedy.

7. mahima

Posts: 696; Member since: Nov 20, 2014

The problem is...partly the pricing of iphone, the bigger problem is...iPhone is not "cool" or "wow" anymore...it's just, "this guy is stupid, buying an iphone while it cost this much, my phone can do all the iphone could and much more" kinda vibe

12. lyndon420

Posts: 6270; Member since: Jul 11, 2012

That is so true. I've never been a huge fan of Samsung, but ever since my bro picked up the S8...I'm seriously thinking about getting one myself or a Note to replace my LG V30. I want to find something decent with wireless charging and no 'in display' fp scanner before it's too late.

13. midan

Posts: 2407; Member since: Oct 09, 2017

I think iPhone is cooler than ever before. Never seen as much IPhones than i see these days. Also the fact how insanely popular AirPods are is also proof about it. Also iPhone userbase is growing, more iPhone users coming every day.

14. sissy246

Posts: 6826; Member since: Mar 04, 2015

Thats funny, i haven't seen many out and about at all. I have yet to see one person have the xr, not saying they are not out there, i just have not seen them so can'tbe a lot. I have seen a few x max and a couple xs

16. midan

Posts: 2407; Member since: Oct 09, 2017

Most own older models.

11. lyndon420

Posts: 6270; Member since: Jul 11, 2012

They will need to reduce their pricing again or come up with another solution, because 30+ million is a lot of iPhones sitting on store shelves waiting to be sold.

2. surethom

Posts: 1535; Member since: Mar 04, 2009

Apple need to buy back way more shares while it is still making billions from iPhones, as the massive success wont last and the more shares it owns the more control it will have over shareholders & stock market.

5. Leo_MC

Posts: 5879; Member since: Dec 02, 2011

Why buy when the share are still expensive?

19. mootu

Posts: 1253; Member since: Mar 16, 2017

Then why has Apple spent almost $100 billion buying back shares in the last 12 months? Answer, buying back shares artificialy stabilizes stock prices when they are falling and Tim Cook is obsessed with one thing and thats the price of Apple stock.

20. Leo_MC

Posts: 5879; Member since: Dec 02, 2011

Apple has always had a budget for buying back stocks, but it only did it when the price was right and now it's not the case. Stock is just a way for a company to get capital; Apple doesn't need that so it won't waste money to control the price of stocks.

3. Furkan

Posts: 552; Member since: Feb 25, 2017

Overpriced

4. OneLove123

Posts: 580; Member since: Aug 28, 2018

$50 discount ain't gonna cut it.

6. Leo_MC

Posts: 5879; Member since: Dec 02, 2011

Told you you can't win, playing the price game... Told you the price is hardly a problem for one who wants an iPhone.

8. shiv179

Posts: 114; Member since: Aug 08, 2012

So if an iPhone costs $3000, people who want an iPhone will still buy it? Money talks, and people have been speaking with their wallets. Apple and Samsung need to keep their pricing in check.

10. Leo_MC

Posts: 5879; Member since: Dec 02, 2011

Yes, if get value from a €10k iPhone, I buy it; if a €300 phone is useless to me, it means that phone is more expensive than a €10k one. For a smart man the price is just a equation and it's absolute value is almost never the reason of a purchase (for instance, I would have found the XR too expensive, if my carrier would have asked me more than €50).

17. wickedwilly

Posts: 449; Member since: Sep 19, 2018

Your reading has obviously not improved. It clearly says that price did affect sales and when the price came down, a large number of people rushed out to buy at a lower price. It clearly says the price is not low enough to sour even more to buy. Remember you repeatedly said that price is NEVER a factor in purchasing an iPhone. I will never forget it, it is one of the most stupid things I have ever heard.

18. Leo_MC

Posts: 5879; Member since: Dec 02, 2011

I said the price was never an IMPORTANT factor and this just proves my point.

21. CQuine

Posts: 26; Member since: Dec 27, 2016

No you didn't.....

23. wickedwilly

Posts: 449; Member since: Sep 19, 2018

No you never included important (even if it is), you changed your view after I told you even TC said it was a factor. Not the first time this has happened either.

9. alanrock

Posts: 187; Member since: Oct 04, 2018

cool kids have Android phone with triple cam setup anyway :)

15. Poptart2828

Posts: 267; Member since: Jan 23, 2018

Vivo, Oppo, Xiaomi and Huawei are going to steamroll Apple right out of the two biggest markets in the world. Trump is def speeding things up with his actions.

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