Apple Releases ‘Low-Price’ iPhone SE To Combat Coronavirus Demands
In China, Apple recently announced that they would be discounting pricing on all iPhone 11 models, and now with the release of their new low-price iPhone SE models as well, Apple is hoping they’re putting themselves in a better business position to recover economically from the coronavirus pandemic.
China accounts for about 15% of Apple’s annual revenue, it’s also where a majority of their manufacturing takes place. Apple is waiting to see how their second-quarter reports look before implementing these discounts, especially considering the United States and Europe have closed down all retail business locations in general amid Covid-19 concerns. China will be the only country that will be able to reopen parts of their market to sell these products, as they’ve begun easing out of their lockdown policies.
“Apple is better positioned than most to experience a rapid recovery in a post COVID world. We see demand as pushed out, not canceled,” analyst Amit Daryanani said.
As Daryanani stated, while consumer spending in general has slowed down due to the coronavirus pandemic, Apple is relatively prepared and equipped to recover. As the second-most valuable tech company in the world, experts from Apple aren’t necessarily worried, but by launching the $400 iPhone SE model, they’re definitely taking some precautionary measures.
Apple analysts predict that they’ll see a 6% decrease in revenue from this past quarter, and an 11% decrease in general net income. To prepare for this decrease, several online Chinese retailers have discounted their iPhone 11 pricing as much as 18% off of the original price.
This isn’t the first time Apple has offered random and obscure online sales for their products as a means of increasing demand in times of economic distress. During the 2008 recession, Apple discounted their Macbook pricing as a means of increasing demand, which ended up increasing Apple’s revenue for that year exponentially.
As previously mentioned, Apple announced the low-priced iPhone SE model this week, and social media has remained relatively quiet about it. The company, however, is hopeful that momentum will begin to pick up in the coming weeks, as individuals looking to purchase a new iPhone will likely want the cheapest and easiest option for acquiring it during a pandemic.
“The cheaper iPhone SE could tempt iPhone owners to opt for a newer device, something they might have otherwise delayed in a weak economy. People want to avoid uncertainty in a downturn. Having a brand like Apple that can showcase quality and make people less worried about breakdowns or after-sales service can bring in buyers,” said Nicole Peng, who tracks the smartphone sector at research firm Canalys.
Initial data has already proved that China’s smartphone market is recovering when compared to what it looked like when this pandemic began. Reports showed that iPhone sales in China increased by 21% last month when compared to sales from this time last year. While experts are still predicting a decrease in net income, this immediate increase in smartphone sales before the pandemic is even over is a good sign for the world’s many businesses/companies, and their economic futures after this quarantine is over.
Eric Mastrota is a Contributing Editor at The National Digest based in New York. A graduate of SUNY New Paltz, he reports on world news, culture, and lifestyle. You can reach him at eric.mastrota@thenationaldigest.com.
