The values of Apple iPhones in the region of China are tumbling due to tax reduction that came into effect since Monday.
Apple announced that it will be reducing the prices of its devices like iPhones, iPads and other similar products on the official website. The cost reduction is due to a drop in 3% in the overall rate of value added (sales) tax that started on the 1st of April, as mentioned by state-run news agency Xinhua.
Some of the products that would now be cheaper are iPhone XS and this is bound to make consumers happy. At present the price of iPhone XS (64GB) is 8,1999 yuan (approximately USD 1,220), the same is reduced by 500 yuan (approximately USD 74). To put it in simpler terms now Chinese consumers can buy the phones at a reduced rate of 5.8%. Also the price of iPhone XR has been reduced by 300 yuan (approximately USD 45) or 4.6%, of the overall amount.
Officials from the Apple Company declined to comment on the price changes. During January, when Tim Cook had warned that severe economic conditions are bound to reduce the overall profit and impact the market over the upcoming year and is bound to impact the sales of iPhone sales in the year. He had also dropped a hint that the company would lower iPhone prices in some market out of United States to meet the US dollar.
iPhone was undergoing struggling in China, long before the economy showed signs of slowing and there was drop in the Chinese yuan. The sales of Apple's smartphone in China is falling since the last three years and has dropped to 20% of the overall sales.
The California Company has competition from various domestic companies like Oppo, Huawei, Vivo and Xiaomi. These offer pocket friendly and high-end smartphones that are customized to meet the demand of Chinese market. Inspite of this, China still is the key market for Apple and contributes to almost 15% of the total sales with revenue of 27% and of USD 13.2 billion during the last quarter in comparison to the similar period of the last year.