The recent discounts on Apple’s latest iPhone 14 Pro range in China suggest a declining demand for high-end devices in the world’s largest smartphone market. Retailers such as JD.com and China Mobile have taken $118 off the iPhone 14 Pro range in 11 days, while retailers in Shenzhen have started cutting prices by $98. Apple’s own local website, however, still offers the devices at regular prices.
The discounts come at the end of the Lunar New Year season, when retailers typically embark on a holiday shopping spree before schools reopen. While the duration of the cuts is unclear, they point to weaker demand in the Chinese smartphone market as Apple looks to recover in the region. The discounts, which range from 7% to 9%, are also unusual since bargains on lower-end models are usually offered first.
Analysts at Jefferies believe the discounts are a sign of weak demand, citing a 3%-4% increase in discounts from January. Apple last week reported its first quarterly revenue decline since 2019, due to a slowdown in production in China and a slump in global demand. However, CEO Tim Cook pointed to a rebound in the Chinese market, as the country has lifted strict Covid-19 restrictions.
Despite Cook’s optimism, smartphone sales are expected to decline again in 2023 after declining last year, according to companies such as Samsung Electronics. Apple did not provide a detailed outlook for the current quarter, but said its performance would be similar to the December period, suggesting a revenue decline of around 5%. Jefferies analysts estimated that the four iPhone 14 models sold 28% less in their first 38 days in the Chinese market compared to the iPhone 13 family.