SHANGHAI (Reuters) – Apple Inc has teamed up with Chinese payment giant Ant Financial Services Group and several local banks to offer interest-free financing, the first so-called flight in the country, as it appears to increase sales of slim smartphone.
FILE PHOTO: A new iPhone X is being sold at an Apple Store in Beijing, China on November 3, 2017. REUTERS / Damir Sunflower / File Photo
The US tech handler issued a rare revenue warning last month with weaker iPhone sales in China, one of the most important markets where consumer spending has been hit by a decline in economic growth.
On its Chinese site, Apple markets the new system, according to which customers can pay 271 yuan ($ 40.31) each month to buy an iPhone XR and 362 yuan each month for an iPhone XS. Customers shopping in old models can get cheaper installments.
Users who purchase products worth at least 4,000 yuan from Apple would qualify for interest-free financing that can be paid over three, six, nine, 12, or 24 months, the site shows.
64 GB versions of the iPhone's XR and XS models are sold at 6,499 yuan and 8,699 official stickers respectively.
Apple offers the plan through Huabei, a consumer credit service run by Ant Financial, the e-commerce giant payment transaction. Alibaba, shows Apple's Chinese site.
Apple and Ant Financial refused to comment on the system.
China Construction Bank Corp., China Merchants Bank Ltd., the Agricultural Bank of China Ltd and the Industrial and Commercial Bank of China Ltd also offer financing systems for Apple products, with minimum purchase of 300 yuan, showing Apple's website in China.
Apple faces headwinds in China, where economic growth slowed in 2018 to the weakest pace of 28 years, exacerbated by a devastating trade war with the United States. The American company also contravenes increased competition from Chinese handset manufacturers.
Several Chinese electronics retailers including Alibaba-backed Suning and JD.com recently slashed iPhone prices, with discounts as steep as 20 percent.
Data from the research company IDC shows that iPhone transfers to China fell 19.9 percent in the fourth quarter of 2018 compared to a year earlier. Total SMS transmission to the country decreased by 9.7 percent over the same period, although domestic brands such as Huawei, Oppo and Vivo continued to grow market share.
Apple's revenue for Greater China fell 27 percent year-on-year to $ 13 billion in the quarter ending December. CEO Tim Cook blamed Macroeconomic conditions and currency fluctuations for Apple's overall flagging growth.
The company has sharpened its focus on its service business, including the App Store, mobile payments and music streams, following the latest dip in iPhone sales that generate the bulk of its profits.
It has teamed up with Goldman Sachs to issue credit cards that will be paired with iPhones and help users manage their money, Wall Street Journal reported on Thursday and quoted people familiar with the case.
Reporting by Josh Horwitz; Editing Himani Sarkar