This subsidy program allows rebates of up to 500 yuan per purchase, is limited to one item per product category, and is open to domestic and foreign manufacturers. However, its structure favors Chinese brands such as Huawei, Vivo, Xiaomi, Honor and Oppo.
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China’s latest consumer subsidy scheme aimed at boosting sales of smartphones, tablets and smartwatches leaves most of Apple’s new iPhone models ineligible. The program, announced by the National Development and Reform Commission and the Ministry of Finance, provides a 15% subsidy for equipment costing less than 6,000 yuan (US$818).
However, premium iPhone models exceed this price cap, and Apple feels it is at a disadvantage compared to domestic brands.
A tailwind for Chinese smartphone makers
This subsidy program allows rebates of up to 500 yuan per purchase, is limited to one item per product category, and is open to domestic and foreign manufacturers. However, its structure favors Chinese brands such as Huawei, Vivo, Xiaomi, Honor and Oppo. Most top-of-the-line iPhones, including the iPhone 16 Pro and Pro Max, start at 7,999 yuan and 9,999 yuan, respectively, well above the subsidy threshold.
Only a limited number of Apple devices are eligible. For example, the base model iPhone 16 with 128GB storage whose price is below the upper limit of 5,999 yuan, and some older models of the iPhone 15 and iPhone 14 series. While these devices may benefit slightly from subsidies, the policy still puts Apple at a disadvantage in a market where competition from domestic brands is already fierce.
Declining market share of foreign brands
Apple’s exclusion comes as foreign smartphone brands, led by Apple, have seen their market share in China dramatically shrink. According to the China Academy of Information and Communication Technology, only 3.04 million units of foreign brands were shipped in November last year, down 47.3% from 5.77 million units the previous year. While the subsidies could help boost sales of older iPhone models, analysts believe the policy is more in line with promoting domestic brands.
Chinese smartphone makers dominate the domestic market and are expected to benefit even more from this system. The policy is in line with the government’s broader goals to stimulate consumption and support domestic high-tech manufacturers. Counterpoint Research notes that Apple’s position in the high-end market could limit benefits, as the subsidies are primarily targeted at budget-conscious consumers who are less likely to consider premium iPhone models. did.
Limited impact despite discounts
Although the subsidy system is a strategic push to encourage consumer spending, its overall impact on the market may be weakened. Online platforms and retailers already offer a variety of discounts, so additional savings won’t dramatically change consumer behavior. Still, for domestic brands operating in the high-end and mid-range segments, government support will help them maintain their dominance in the world’s largest smartphone market.
As Apple navigates these challenges, it remains to be seen how the tech giant will adapt to the changing dynamics in China, where affordability is increasingly driving consumer choice.
