Apple (NASDAQ:AAPL) has encountered fresh headwinds in its domestic market. The company continues to grapple with the coronavirus fallout. Meanwhile, the company’s stores were targeted by looters during the George Floyd killing protests over the weekend.
In response to the looting incidents, Apple closed most of its stores in the US. The company has been disabling looted iPhones. Notably, the fresh wave of store closings in the wake of Floyd’s killing comes as Apple just started to reopen the stores after closing them in March. Initially, the company closed its stores in China before extending the closures globally as a measure to curb the spread of coronavirus.
The store closings and the economic hit from COVID-19 caused a 6.5% year-over-year drop in iPhone revenue in the March quarter.
Apple slashes iPhone prices in China to boost sales
The iPhone business is Apple’s main revenue source. Notably, China is one of the largest iPhone markets. According to CNBC, iPhones are selling at steep discounts in China. The price cuts in China come as the country reopens its businesses. Chinese authorities placed large parts of the country on lockdown for months to combat COVID-19.
The lockdown diminished the demand for products like smartphones. Apple’s iPhone sales in China fell by more than 60% in February. With China reopening, the iPhone demand in the country has started rebounding and Apple wants to build on the momentum.
Notably, the iPhone price cuts in China also comes as the country’s 6.18 shopping festival starts. The 6.18 festival is an annual Chinese shopping holiday pioneered by JD.com (NASDAQ:JD) to celebrate its founding. The numbers represent June 18—the month and date that JD was founded in 1998. JD is one of China’s top e-commerce providers. Apple runs a digital shop on JD’s platform.
Pandemic disrupts Apple’s product launch schedule
Traditionally, Apple has launched flagship iPhones in September, which might change this year. The company continues to grapple with the COVID-19 pandemic. According to 9to5Mac, Apple’s flagship smartphone model for 2020, the iPhone 12, will enter mass production in July or August. The company will likely skip the September launch and release the device in October. The iPhone 12, which will likely come in four variants, will be Apple’s first 5G handset. The company will catch up with Samsung and Huawei, which already have 5G devices on the market.
Finally, Apple stock has registered a remarkable comeback from the pandemic sell-off. At about $322 per share, Apple has pulled up more than 50% from its pandemic lows reached in March.