In brief: While Apple is preparing for longer smartphone replacement cycles, the decision to price its iPhone 11 $50 lower than its predecessor has certainly had an effect in China, which is the second-largest market after the US.
When Apple revealed the iPhone 11 earlier this year, it was clear that this would be the phone that most people would want to buy. Compared to last year’s iPhone XR, it’s the same size phone with an improved camera system, better internals, more color options, and excellent battery life. It’s still a fragile sandwich of glass and metal, but the most important part is that it’s cheaper, starting at $699 for the base version with 64 GB of storage.
Interestingly, the iPhone is picking up steam again in China thanks to the new mainstream model. According to official data from the Chinese Academy of Information and Communications Technology spotted by Bloomberg, Apple shipped more than 10 million iPhones in the country in the first two months since release. That is a 6 percent increase year-over-year in a region that seemed all but conquered by Chinese manufacturers like Huawei who offer cheaper alternatives.
This result is very important to Apple’s bottom line, as the company doesn’t have to pay import tariffs on iPhones sold in China like it does with the ones it sells in the US. Samsung and Huawei’s smartphone shipments have been growing in places like Europe at the expense of Apple until the release of iPhone 11, which is more appealing than the iPhone XR before it thanks to the lower price (and possibly smarter naming scheme).
Apple is said to have bumped production by 10 percent in response to the strong demand, but the company is still focused on other plans for its long-term growth. Recently, the company has been pushing TV, music and news subscription services to its loyal customer base and is even thinking about bundling them together to make them more appealing.
It’s also worth noting that Apple is deeply invested in the health and wellness market and is looking for ways to make iPhone upgrades more attractive to US customers. CEO Tim Cook recently said Apple Card users will have the option of interest-free financing for their new purchases.