Apple Slashes iPhone Prices In China As VAT Rate Cut Goes Into Effect
Apple loves its high margins, and it rarely cuts prices on devices, save for the occasional sale. It did institute a price cut in China back in February that saw prices fall modestly in the country, and sales boomed as a result. Apple cut prices in China as it faces very strong competition from local brands like Huawei and Xiaomi. Reports indicate that Apple has now cut prices in China once again.
A reduction in the value-added tax (VAT) went into effect in China on April 1. Apple passed the tax savings on to the consumer in China and cut prices as much as 300 to 500 yuan, or about $44 to $75, for some of the latest iPhone models. Price cuts were made to the iPhone X, iPhone 7, and iPhone 8 smartphones.
The price cuts made earlier this year were given as discounts to third-party retailers, while the new price cuts are offered directly on Apple's website for China. The move might entice fans to purchase directly from Apple rather than the third-party retailers. Chinese Apple fans who have purchased one of the newly discounted devices in the last 14 days will see refunds bringing their purchase price down to the new rate.
iPhone models aren't the only Apple products seeing discounts; iPad, AirPods, and Mac devices are also seeing price cuts thanks to the reduced taxes. The tax cuts in China are part of the government's plan to improve a slowing economy within the country as the trade war with the U.S. heats up. Tim Cook said that the economic environment in China is part of the reason that Apple lowered the revenue guidance for Q1 fiscal 2019.