Recently, JD.com announced that "618" will increase the price reduction of Apple phones. The highest discount for Apple products at JD's self operated flagship store, the iPhone 15 Pro Max, is 2350 yuan, and the iPhone 15 Pro will be directly reduced by 2000 yuan.
Several industry insiders told Securities Daily reporters that due to the phenomenon of Apple's domestic performance experiencing a simultaneous decline in both quantity and price, and the increasingly complex competitive environment, Apple has had to increase its discount efforts. A significant price reduction is conducive to stimulating consumer enthusiasm for device replacement, and may achieve a short-term rebound in sales.
Apple's multi-channel price decline
The Securities Daily reporter learned from Apple's self operated flagship store on JD.com that from June 1st to 3rd, after a price reduction, the iPhone 15 Pro was priced at 5949 yuan; The iPhone 15 Pro Max starts at 7749 yuan. According to the official flagship store of Tmall Apple Store, the price of iPhone 15 Pro starts at 6099 yuan; The price of iPhone 15 Pro Max starts at 7949 yuan. Compared to the selling price, the maximum price reduction has exceeded 25%. The official iPhone 15 series has dropped to its lowest price in history.
This is also the biggest drop in the latest generation iPhone during the 618 event in recent years. Taking last year's 618 as an example, the iPhone 14 Pro 128GB was only reduced by 1500 yuan, with a price of 6499 yuan. The iPhone 14 Pro Max, which has the highest price reduction, is only 1800 yuan lower than the official website, and this year's price reduction has exceeded 2000 yuan.
In fact, the price of Apple's iPhone 15 series has been lowered several times. In January of this year, Apple launched a price reduction on its official website, with the iPhone 15 series offering a maximum price reduction of 500 yuan; In March of this year, Apple briefly lowered the starting price of the iPhone 15 series by 1000 yuan.
"The further price reduction of the iPhone 15 series on '618' is mainly due to intensified market competition, changes in consumer purchasing psychology, and the impact of the global economic situation." An anonymous securities industry analyst told Securities Daily that the price reduction strategy is aimed at attracting more consumers, especially in the face of strong challenges from domestic mobile phone brands. Meanwhile, Apple may also be laying the groundwork for the release of the new iPhone and clearing inventory.
Zhang Yi, CEO and Chief Analyst of iMedia Consulting, told Securities Daily that the pricing of Apple's iPhone 15 series is at a relatively high level in the smartphone market, so it has enough room for price reduction. Price reduction is not only to adapt to market changes, but also an adjustment based on product pricing strategies. Apple has stimulated market demand by lowering prices, while demonstrating flexibility in its pricing strategy.
Can price reduction boost sales?
It is worth noting that Apple's sales situation in China is not optimistic. The financial report shows that in the first quarter of 2024, Apple's sales in Greater China decreased by 8% to $16.4 billion.
In addition, in terms of shipment volume, according to a report released by International Data Corporation (IDC), in the first quarter of 2024, Honor and Huawei tied for the first place in the Chinese smartphone market, while Apple's shipment volume decreased by 6.6% year-on-year, falling to the third place in the domestic market. In terms of sales, Apple's sales in the first quarter decreased by 19.1% year-on-year, marking the worst performance in China since 2020.
"In the past, Apple's dominance in the Chinese market was mainly due to the lack of competitors. However, China currently has strong research and development, technological reserves, industrial chain support, and research personnel reserves in the field of smartphones. The ability to produce high-end domestic phones is no less than that of Apple." Zhang Yi, CEO and Chief Analyst of iMedia Consulting, told Securities Daily reporters, "However, the price of Apple phones is still high, and cost-effectiveness is no longer dominant. Consumers are switching to domestic brands, leading to a gradual decline in Apple's sales."
However, some institutions are optimistic about Apple's future market performance. According to a research report by Everbright Securities, although facing the impact of intensified competition in the Chinese market in the short term, Apple's core competitiveness lies in its sustained innovation ability, strong brand power and user stickiness, as well as a highly collaborative ecological loop. With a global active device base of over 2.2 billion units, the company's service business with higher profit margins is expected to further penetrate, providing the company with stable profitability.