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Apple lowers iPhone prices in China to keep pace after lockdown

Apple staff and customers who wear face masks to protect against COVID-19 coronavirus will be seen in Beijing’s retail premises on February 22, 2020.

Nicolas Asfouri | AFP | Getty Images

Apple has lowered the prices of its latest iPhones in China ahead of a major online shopping festival, as it looks to continue the momentum it has seen since the gradual resumption of the world̵

7;s second-largest economy after the shutdown of the coronavirus.

In China, Apple sells its products through various channels. At Alibaba-owned e-commerce site Tmall, Apple has an official store. JD.com is an official retailer of Apple products, although the US company works closely with the online shopping giant when it comes to pricing.

At Tmall, users can purchase an iPhone 11 64 GB model for 4,779 yuan ($ 669.59), which is about 13% off the original sales price of 5,499 yuan. The iPhone 11 Pro starts at 7,799 yuan, up from 8,699 yuan, while the iPhone Pro Max is listed for 8,359 yuan compared to the original price of 9,599 yuan. The recently released iPhone SE, the cheapest in Apple’s range, is priced at 3,999 yuan, down from 3,299 yuan.

Apple’s own official Chinese website does not show these price reductions.

Tmall rival JD.com has even steeper discounts. The iPhone 11 64GB model is priced at 4599 yuan, iPhone 11 Pro to 6999 and iPhone 11 Pro Max to 7,499 yuan. If all discounts are applied, the iPhone 11 Pro Max has more than 21% off its original price on JD.com. The IPhone SE is listed at 3,069 yuan at a discount, up from 3,199 yuan.

A spokesman for JD.com said the company makes discounts every day during the so-called 6.18 shopping festival but the discount structure may vary day by day.

The prices listed in this article reflect the campaigns on June 1. A spokesman for JD said that the volume of transactions for Apple products during the first hour of sales on June 1 reached three times that of the same period last year but did not provide a specific value.

Apple did not respond to a request for comment when contacted by CNBC.

Other third-party sellers also offer discounts on both JD.com and Tmall. The huge discounts on a big brand like Apple for the upcoming 6.18 shopping festival in China show the fierce competition between the country’s e-commerce giants, which runs counter to consumers’ attention and wallets. The shopping event that takes place on June 18 is similar to Singles Day, the largest 24-hour sales period that takes place on November 11 every year in China. Although these events got their name after a day, they often happen over a number of days.

Apple is known for very much controlling the prices of its third party vendors and it is common for them to offer discounts on the Cupertino giant’s products. But it is less common to see discounts at Apple’s own official stores in China. Will Wong, a research manager at IDC, told CNBC that this is only the second time Apple has participated in the 6.18 event.

“Last year when they did, the reception was good and they had a good result by giving discounts and promotions,” Wong said. “This year we see it as a good timing during this post-lockdown season as people are very cautious (with spending) and discounts will stimulate demand.”

Earlier cuts in iPhone prices have often come due to lack of demand for the smartphone. But Apple is currently seeing good momentum in China after the effective shutdown of the country during the height of the coronavirus outbreak that forced the US tech giant to shut down stores.

A recent CNBC analysis showed that Apple saw strong bounce in China in April when the economy restarted.

The company hopes that the campaigns will attract older iPhone users to upgrade.

“The cheaper iPhones actually attract quite a lot of attention today. They are trying to focus on the older generation’s iPhone installation base such as (the ones on) the iPhone 6, iPhone 7 and iPhone 8,” Nicole Peng, vice president of mobility at Canalys, told CNBC.

“They don’t want to spend much more compared to what they previously spent, but they will need a unit upgrade.”

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