Tech

Apple slashes iPhone prices in China

Key Points
  • Apple has cut prices on products in China, including iPhones, by nearly 6 percent.
  • The price cuts come as Apple has seen sales drop in China, leading to lower-than-expected revenue in the fourth quarter of 2018.
  • The price cuts were in direct response to a tax change in China which lowered the value-added tax for manufacturers like Apple. 
Chinese customers in an Apple store on Jan. 3, 2019, in Beijing, one day after Apple preannounced weak quarterly results that it attributed primarily to a sales slowdown in China.
Lintao Zhang | Getty Images

Apple has cut prices for several of its most important products on its official Chinese online store by nearly 6 percent. The price cuts affect products including iPhones, iPads, Macs and AirPods, according to Apple's online store in China.

The price cuts were in direct response to a tax change in China which lowered the value-added tax for manufacturers like Apple, according to Caixin.

The cuts also come months after the company blamed a $5 billion to $9 billion revenue shortfall in the fourth quarter of 2018 on "lower than anticipated" iPhone sales and demand in China, Taiwan and Hong Kong.

VIDEO2:4302:43
Warren Buffett weighs in on the Apple credit card, Apple TV+

"If you look at our results, our shortfall is over 100 percent from iPhone and it's primarily in greater China," Apple CEO Tim Cook told CNBC in January when the company lowered its revenue guidance ahead of earnings.

The price cuts can be seen on Apple's website. For example, the entry-level iPhone XR now costs 6,199 yuan, 4.6 percent lower than on March 29, when Apple listed 6,499 yuan as its price. Apple's high-end iPhone XS and iPhone XS Max models each got a 500 yuan price cut, which works out to $74.50 at the current exchange rate.

Earlier this year, prices on Apple products were lowered on official third-party sellers in China including Tmall and JD.com.

According to Apple's customer service, anybody who has bought an affected product from Apple in China within the past 14 days can receive a refund for the difference in price.

Greater China, which includes Hong Kong and Taiwan, accounted for about 15 percent of Apple's revenue in the fourth calendar quarter of 2018, the most recent quarter for which statistics are available. However, Apple's China revenue of $13.17 billion was down nearly $5 billion from a year ago.

Apple shares went up slightly Monday.

VIDEO2:2002:20
Canceling AirPower an embarrassment for Apple, says Wedbush's Dan Ives