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Apple has initiated smartphone price wars in China: Jefferies

Published 05/28/2024, 06:40 PM
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Analysts at Jefferies believe Apple (NASDAQ:AAPL) has created significant pricing pressure on the local brands in China, given its recent iPhone discounts.

The investment firm said that steep 618 shopping day festival discounts on the iPhone 15 series are putting pressure on Android and Huawei, with the price cuts "likely the only way for Apple to defend its iPhone market share in China."

"Our recent tracking indicates that for Android and Huawei's (HW) flagship models, the 618 discounts have expanded, and offline discounts are mostly bigger than online discounts," said analysts.

"We found that offline discounts on those four flagship models are on average 8% to 10%, while online discounts are only 2% to 7% (except OPPO Find X7 at 10%). Before 618, we had seen only very limited discounts on OV's flagship models."

Those deeper discounts on the iPhone 15 series likely make it more attractive than Android and Huawei's flagship models.

"Those discounts have put iPhone 15 P/PM much closer to those of the top end of Android+HW flagship models," notes analysts. In particular, since there is no discount on Mate 60 Pro and Pura70 Pro, their selling prices are now higher than that of iPhone 15 Pro (based on the cheapest promotional pricing)."

"Therefore, we believe Apple has created significant pricing pressure on the local brands, particularly HW since HW's flagship models are selling at the highest prices among the local brands."

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