Suffering from lackluster demand in China, Apple has taken the step to slash prices by close to 6 percent in the country.
According to a report in CNBC, citing the Cupertino, California iPhone maker's online store in China, the cuts are across the board on its iPhones, iPads, Macs, and Airpods. As one example, an iPhone XR is now priced 4.6 percent lower than it was at the end of March, the report said.
The price cuts were prompted by lower than anticipated demand for iPhones in China, Taiwan and Hong Kong, the news outlet reported. Apple blamed its fourth-quarter revenue shortfall on its China business, with CEO Tim Cook saying at the time the shortfall was 100 percent due to iPhone sales, largely in China. As of the fourth quarter, China accounted for around 15 percent of Apple's sales.
Demand has been slumping in China for Apple products in part because of the hefty price tag. Chinese competitors are cramming the same technology as Apple in their smartphones but are charging a fraction of the cost. Additionally, the smartphone market is getting saturated. Consumers are holding on to their phones for longer, lengthening the replacement cycle. All of that has hurt Apple the most, with its stature declining in the country.
With sales of the iPhone slumping, Apple has been in diversification mode, focusing more on services revenue. That encompasses everything for iTunes to Apple Pay. On the payments front, last week Apple launched the Apple Card, a new credit card that has zero fees and lower interest rates than what's on the market now. Users of the credit card will get 2 percent cash back for purchases made with Apple Pay and 1 percent cash back on all non-Apple Pay purchases. Apple makes it easy for customers to apply; they sign up through their Apple Wallet with their accounts funded almost instantly in some cases. The Apple Card will be available in the summer.