Details Emerge On Apple's iPhone Strategy In China

Apple Inc. AAPL priced its iPhone XR and XS lines in China at a 26% to 28% premium to U.S. prices, which begs the question of how will the company price its new iPhone 11 lineup in the key market.

What Happened

Apple was forced to lower its iPhone prices in China in reaction to sales falling short of management's expectations, CNBC's Arjun Kharpal reported Monday. 

Ahead of the upcoming launch of the new iPhone 11 models in China, there are similar concerns, as the Chinese market is more price sensitive.

Apple will sell the 11 Pro and Pro Max devices at a 23% premium versus the U.S. price, Kharpal said. But the base iPhone 11 is priced at a premium between 10% and 20%, which shows Apple "clearly has learned a little bit of a lesson" over the past year, Kharpal said.

Why It's Important

Apple's online store in China shows the iPhone 11 has the longest wait time for delivery, which may confirm its popularity, he said.

In addition, China e-commerce company and authorized Apple reseller Fenqile told CNBC that over 60% of all iPhone pre-orders are for either the 128GB or 64GB iPhone 11 models.

What's Next

Data from Apple's own website and confirmation from Fenqile that the iPhone is performing well is a "promising" sign for the company, Kharpal said.

Apple may be able to reverse some "pretty tough" recent quarters in China and start showing some growth in the country moving forward, he said. 

Apple shares were up 0.45% at $219.74 at the time of publication Monday. 

Related Links

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Photo courtesy of Apple.