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Apple cuts iPhone prices in China to keep momentum going as economy continues to reopen

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Apple has cut 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 following the gradual resumption of the world’s second-largest economy after the coronavirus lockdown. 

In China, Apple sells its products via various channels. On Alibaba-owned e-commerce site Tmall, Apple has an official store. JD.com is an official reseller of Apple products, though the U.S. company works closely with the online shopping giant on pricing.

On Tmall, users can buy an iPhone 11 64GB model for 4,779 yuan ($669.59), down around 13% from its original 5,499 yuan selling price. The iPhone 11 Pro starts at 7,579 yuan down from 8,699 yuan, while the iPhone Pro Max is listed for 8,359 yuan versus the original price of 9,599 yuan. The recently-released iPhone SE, the cheapest in Apple’s range, is priced at 3,099 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 4,599 yuan, the iPhone 11 Pro at 6,999 and the iPhone 11 Pro Max at 7,499 yuan. If the full discounts are applied, the iPhone 11 Pro Max is at a more than 21% discount from its original price on JD.com. The iPhone SE is listed at 3,069 yuan with discount, down from 3,199 yuan.

A JD.com spokesperson said that the company is doing 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 promotions on June 1. A JD spokesperson said that the transaction volume of Apple products in the first hour of sales on June 1 reached three times that of the same period last year but did not give a specific figure. 

Apple staff and customers, wearing facemasks to protect against the COVID-19 coronavirus, are seen on the shop premises in Beijing on February 22, 2020.

Nicolas Asfouri | AFP | Getty Images

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

Other third-party sellers are offering discounts too on both JD.com and Tmall. The heavy discounts on a major brand like Apple for the upcoming 6.18 shopping festival in China, shows the fierce competition between the country’s e-commerce giants, vying for consumers’ attention and wallets. The shopping event which takes places on June 18, is similar to Singles Day, the major 24-hour sales period that takes place on Nov. 11 every year in China. Even though these events are named after one day, they often take place over a number of days. 

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

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

Previous cuts on iPhone prices have often come due to lack of demand for the smartphone. But Apple is currently seeing good momentum in China following the effective lockdown of the country during the height of the coronavirus outbreak which forced the U.S. tech giant to shut down stores.

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

The company will be hoping the promotions will attract older iPhone users to upgrade. 

“The cheaper iPhones are actually attracting quite a lot of attention these days. They are trying to target the older generation iPhone install base for example (those on a) 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 device upgrade.” 

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