Daily Management Review

Apple Offers Zero Interest Financing In China For iPhones To Boost Sale


02/22/2019




Apple Offers Zero Interest Financing In China For iPhones To Boost Sale
Apple Inc had joined hands with Alibaba in China to offer interest free loans to customers to purchase iPhones as a strategy of the US tech giant to boost up its dropping sale in the Chinese market – one of the largest and most critical overseas markets for the company.
 
Apple has tied up with a number of banks and Huabei, a consumer credit company operated by Alibaba’s Ant Financial unit, to offer the interest free loans and these packages can now be seen on the Chinese website of Apple currently.
 
Details of the entire deal for the no-interest local package from Apple is available on the China website where in the new scheme is being clearly promoted by Apple. According to the scheme, consumers would need to pay just 271 yuan ($40.31) each month as instalments for purchasing an iPhone XR while they can own an iPhone XS against a monthly instalment of 362 yuan. The deals can be cheaper for those customers who exchange their older iPhone models. 
 
Additionally, Apple is also allowing interest-free financing to those customers who make purchases of a minimum of 4,000 yuan from Apple. The loan can be repaid by customers over three, six, nine, 12 or 24 months, according to information from the website. And those consumers willing to trade devices from the likes of Huawei, Xiaomi and others are also being offered discounts.
 
The financing deals, according to analysts, shows an interesting marketing and sale strategy by Apple because it was just a few weeks ago that revenue forecast was cut by the company for the first quarter of the current year. The company reduced its revenue guidance from the $89 billion to 93 billion range to $84 billion and blamed the unexpected “economic deceleration, particularly in Greater China” for the lowering of the forecast
 
While some consumers could be convinced to make purchase of an iPhone because of the financing package, it also is a signal to some analysts that the current upgrades and newest designs of the iPhones are not able to strike a chord with the customers like they used to do earlier among Chinese consumers. Typically on earlier occasions , Apple has always managed to induce sale buying frenzy among consumers with the release of every newly designed iPhones . However, analysts say that the current iPhone models of XR, XS and XS Max have quite a significant degree of similarity with the one-year-old iPhone X.
 
While there is generally a high consumer interest and sale of newly launched iPhones during the first quarter of a launch, the impact seems to fizzle away in the subsequent quarters.
 
Analysts are also now eagerly waiting to see if Apple would launch similar financing programs in India as well where, according to The Wall Street Journal, Apple noted a 40 per cent drop in sale in 2018. And in that period, the market share of Apple in India, which was very small to start with, has reduced by 50 per cent from 2 per cent to 1 per cent of the Indian market accorio9dng to reports.
 
(Source:www.techcrunch.com)






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