Some of the biggest retailers in China have slashed the price of the older models of Apple’s iPhone after observing weak demand for the phones.
JD.com and Suning, a retailer that is backed by Alibaba, are both iPhone resellers. They are among those to have slashed the prices of the iPhone 8, 8 Plus and XR models by more than a fifth in an effort to boost its sales.
Earlier this month, a profit warning was issued by Apple for the first time since 2002, with figures 10 percent below the expectations. The iPhone maker partly blamed the declining sales in China for the slowdown.
The rare misstep from the firm also sent the shares in other major tech firms, including Microsoft and Amazon, falling.
In a letter that was addressed to shareholders, Tim Cook, the CEO of Apple, stated: “In some developed markets, iPhone upgrades were also not as strong as we thought they would be.”
He added: “While macroeconomic challenges in some markets were a key contributor to this trend, we believe there are other factors broadly impacting our iPhone performance, including consumers adapting to a world with fewer carrier subsidies, US dollar strength-related price increases, and some customers taking advantage of significantly reduced pricing for iPhone battery replacements.”
The news saw $55 billion wiped off the value of the tech giant within 24 hours after the announcement, the biggest one-day decline in the share price for the firn within a period of five years.
Apple facilitates the majority of its sales in China through third-party resellers, which have more freedom in setting the price points.
The tech giant reduced the production of its iPhone line – including its new XS, XS Max and XR models – by 10 percent. It marked the second time in two months that the production levels have been reduced.