Apple Inc.’s (NASDAQ: AAPL) iPhone models are being marked down among retailers in China as they struggle to sell the devices, according to CNBC. The discounted prices come shortly after Apple Chief Executive Officer Tim Cook slashed the Company’s guidance for the upcoming quarter due to the weakness stemming from China.
Experts are saying that Apple’s smartphones have posted poor sales in China due to the expensive prices. Apple is also struggling to compete against Chinese tech giant Huawei’s phone models, which offer more innovative features.
According to CNBC, a large Chinese retailer, Suning has already slashed its iPhone model prices. The retailer discounted the newest iPhone XR 126GB from CNY 6,999 to CNY 5,799 or from USD 1,036 to USD 858, which is a USD 178 discount.
Chinese consumers were being asked to pay nearly a 28% premium for the XR as opposed to American consumers. The XR is supposed to be the cheapest iPhone model among the lineup Apple recently launched several months ago.
Other third-party sellers are selling it for even cheaper, offering flash sales to get rid of the iPhones. One seller had a 256GB iPhone XS Max for CNY 9,699 or USD 1,436. Originally, the XS Max costed CNY 10,999 or USD 1,628. However, even with the discounted price, the model still remains more expensive than the U.S. listed price of USD 1,249.
Analysts are saying that Apple is facing two major issues in China: wrong pricing and failure to introduce new technological features. Because of that, analysts are saying competitors have taken advantage and took over Apple in the smartphone market in China.
“The trade war is background noise and more of a scapegoat excuse with the real issues being iPhone XR demand and a mispriced product in a competitive Chinese market,” Daniel Ives, Managing Director of Equity Research at Wedbush Securities, told CNBC by email. “It’s time for Cook and Apple to look in the mirror, take their medicine around pricing and execution and move forward with the biggest installed base in the world to turn this ship around from this dark chapter in Cupertino.”
Apple has not announced whether the Company will slash its prices on iPhone models within its official stores in China.