Apple’s decline in China is worrying
One of the biggest factors behind Apple’s (AAPL) poor December quarter was indeed poor sales in China. Apple’s revenue from the region fell 26.6% YoY during the holiday quarter. The Greater China region remains an important one as it still made up 15.6% of Apple’s total revenue in the December quarter.
To boost sales in China, Apple is pairing up with Alibaba (BABA) founder Jack Ma’s Alipay to allow Chinese consumers to borrow money at zero cost to buy Apple products on the iPhone maker’s online store, according to the Wall Street Journal.
Apple is reportedly offering iPhones to Chinese consumers free of interest costs
The Wall Street Journal said that customers will be able to buy products in monthly installments over 24 months with a minimum purchase to avail the offer of 4,000 yuan, or $595. Ant Financial’s Alipay has a whopping 700 million active users in the country. The offer will be from Alipay’s Huabei service, which operates like a virtual credit card, the report says.
The offer could definitely help boost Apple’s sales in China, but it will have to bear the financing cost, something it might be willing to do, in order to improve sales.
As we have seen in this part and the previous part of the series, Apple is trying hard to boost its total revenue in light of its deteriorating core business. It is trying to leverage its deep ecosystem and its brand value as iPhone sales dwindle. Apple stock is up 20.3% since troughing on January 3.