SHANGHAI (Reuters) – Apple Inc. has teamed up with the Chinese payment giant Ant Financial Services Group and several local banks offering interest-free financing, its first move in the country, as it appears to increase declining smartphone sales.
FILE PHOTO: A new iPhone X has been sold at an Apple Store in Beijing, China November 3, 2017. REUTERS / Damir Sagolj / File Photo
The US tech company issued a rare revenue alert last year with reference to weaker iPhone sales in China, one of its main markets, where consumer spending has hit due to a decline in economic growth.
On its Chinese website, Apple promotes the new scheme, where customers can pay 271 yuan ($ 40.31) each month to buy an iPhone XR and 362 yuan each month for an iPhone XS. Customers who shop in old models can get cheaper installments.
Users who buy products worth at least 4,000 yuan worth of Apple qualify for interest-free financing, payable over three, six, nine, 12, or 24 months, the site shows.
64 GB versions of the iPhone XR and XS models are sold to official stickers of 6,499 yuan and 8,699, respectively.
Apple offers the plan through Huabei, a consumer credit service run by Ant Financial, the payment company for the e-commerce giant Alibaba, showing Apple's Chinese website.
Apple and Ant Financial refused to comment on the scheme.
China Construction Bank Corp., China Merchants Bank Co. Ltd., the Agricultural Bank of China Ltd and the Industrial and Commercial Bank of China Ltd also offer financing schemes for Apple products, with a minimum purchase of 300 yuan, showing Apple's Chinese website.
Apple is facing headwinds in China, where economic growth slowed down in 2018 to the weakest pace for 28 years, aggravated by a criminal war with the United States. The American firm is also struggling with increasing competition from Chinese handset makers.
Several Chinese electronics retailers, including Alibaba-backed Suning and JD.com, slashed iPhone prices recently, with discounts as steep as 20 percent.
Data from research firm IDC show that iPhone transfers to China fell 19.9 percent in the fourth quarter of 2018 compared to the previous year. The total number of smartphone shipments to the country was down to 9.7 percent over the same period, although domestic brands such as Huawei, Oppo and Vivo continued to increase market share.
Apple's revenues for its Great China region fell 27 percent year-on-year to $ 13 billion in the quarter ended December. CEO Tim Cook blamed macroeconomic conditions and currency fluctuations for Apple's overall flag growth.
The company has a strong focus on its service business, including the App Store, mobile payments and music streaming, following the latest dip in iPhone sales that generate the bulk of the profits.
It has joined forces with Goldman Sachs to issue credit cards that will be paired with iPhones, and will help users manage their money, reports the Wall Street Journal on Thursday, and quotes people who are familiar with the case.
Reporting by Josh Horwitz; Editing Himani Sarkar