Apple priced the iPhone out of the Chinese smartphone market

“Apple Inc.’s falloff in demand for iPhones in China shows the company’s flagship product is hurt by its high price and the rise of cheaper, more comparable rival devices in the world’s biggest market,” Ian King and Mark Gurman write for Bloomberg. “The company cited struggling iPhone sales in China when it cut its quarterly revenue forecast on Wednesday for the first time in almost two decades. Chief Executive Officer Tim Cook said a number of factors contributed to the revised outlook for the holiday period, including the strength of the dollar, fewer subsidies from phone service providers and existing customers sticking with older models via cheaper battery replacements. He didn’t mention that Apple had priced its new models at stratospheric levels.”
“The iPhone XS Max, the current top of the iPhone range, starts at 9,599 yuan ($1,400) in China. Flagship phones from Huawei Technologies Co. and Oppo cost from 4,000 to 5,000 yuan, around half that of an iPhone. Some of Vivo’s entry level smartphones cost a quarter of the price,” King and Gurman write. “Even Apple’s iPhone XR, which was supposed to be a lower-cost alternative to the high-end iPhones, costs about 1,000 yuan more than a competing device.”
Apple’s all-new 5.8-inch iPhone Xs starting at $999 and 6.5-inch iPhone Xs Max starting at $1099
 
“The average monthly white-collar salary in China was 7,850 yuan in the third quarter of 2018, meaning that most new iPhones cost more than a month of work,” King and Gurman write. “Apple has recognized its pricing in China may be too high, expanding a recent iPhone trade-in promotion from the U.S. to the region at the end of December.”
Read more in the full article here.
MacDailyNews Take: Apple pushed the pricing elasticity to see how far they could go and the elastic broke. That’s good news for iPhone consumers the world over. The next generation of iPhones will cost less and do more. (Hopefully, they’ll be better named as well.)
SEE ALSO:
Apple launches trade-in program in China to get Android users to upgrade to iPhones – January 3, 2019