Sales of Apple’s latest top-of-the-line smartphones have reportedly been much worse than expected in the world’s largest smartphone market, CNBC reported. The cause of the reduced sales seems to be high prices and a lack of innovative features compared to local competitors like Huawei.
Earlier this month, Apple CEO Tim Cook issued a statement acknowledging the company’s poor performance in the Chinese market. He put the blame on the slowing Chinese economy and rising trade tensions with the US as the key reasons for reduced sales in the first quarter. However, experts told CNBC that iPhone’s problem in China stems from incorrect pricing.
Apple's 512GB iPhone XS Max, the most expensive of the new models, costs $1,499 in the U.S. But in Asia's largest economy, the non-discounted price is 12,799 yuan, or nearly $1,900. Even the iPhone XR, the cheapest of new models, costs 18 percent higher than the same phone in the US.
"The trade war is background noise and more of a scapegoat excuse, with the real issues being iPhone XR demand and a mispriced product in a competitive Chinese market," Daniel Ives, managing director of equity research at Wedbush Securities, told CNBC by email.