Apple (AAPL) is offering discounts in China, representing a significant and rare move from the tech giant as it aims to counter rising competition in the market.
According to reports, the discounts will also apply to its latest iPhones, with Apple implementing a promotion in China from Thursday to Sunday, which is said to be cutting the price of iPhones by the equivalent of as much as $70. Meanwhile, the price of other products will be cut by up to $110 as part of the promotional push ahead of the Lunar New Year holiday, which starts on February 10.
Various investment bank analysts have pointed to declining iPhone demand in China as a reason to be cautious on the stock. Competition from rivals such as Huawei is also applying pressure on the iPhone maker.
In a recent note, analysts at Evercore ISI noted that investors have become increasingly bearish on the outlook for iPhone revenue in FY24, largely driven by concerns around a more competitive Huawei in China.
However, they believe the concerns are overstated and that iPhone revenue should remain stable this year with ASP uplift and India share gains offsetting any potential weakness in China.
"There were not any signs of share loss in the industry numbers for Sept-qtr, but Apple admittedly only faced 1 month of Huawei competition in this period," wrote analysts at Evercore ISI, maintaining an outperform rating and $220 price target on Apple shares (NASDAQ:AAPL).
"We expect investors to pay a lot of attention to the Dec-qtr iPhone results as a potential indicator of how the Huawei Mate 60 may impact iPhone demand," they added. "We remain optimistic that Apple's positioning as a premium brand and sticky ecosystem will help fend off any challenge from Huawei."