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Apple Shows It’s Not Ready to Cede China to Huawei

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Apple lowering barrier to owning iPhone in China

Apple (AAPL) has partnered with Alibaba’s (BABA) Ant Financial and several banks in China to extend interest-free loans to Chinese consumers to spend toward purchases of its products, according to a Reuters report. In addition, Apple is allowing customers in China to spread out installment payments for a new iPhone over 24 months, meaning that people in China can buy a brand new iPhone XR for less than $30 a month.

By teaming up with lenders on interest-free loans and allowing customers up to two years to finance an iPhone purchase, Apple seems to be trying to open up a more affordable option for Chinese consumers to own an iPhone and drive sales of the product in the country.

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Apple’s China revenue tumbled nearly 28%

Tight competition from domestic rivals such as Huawei and a slowdown in China’s economic growth resulted in Apple reporting a decline in its revenue from China in the December quarter. Apple’s revenue from Greater China, the market that includes Hong Kong and Taiwan, fell 27.8% YoY to $13.2 billion in the December quarter.

Apple’s iPhone shipments in China dropped 22% YoY to 10.9 million units in the December quarter, according to estimates by Strategy Analytics. In contrast, Huawei’s unit shipments rose nearly 24% YoY to 30 million.

Apple is trying to boost the uptake of new iPhones in China at a time when it has been banned from selling some older iPhone models in the country in relation to a patent dispute with Qualcomm (QCOM). Apple used modem chips from Intel (INTC) in the latest iPhone models while avoiding Qualcomm chips as the standoff between the two continues.

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