EU and US could reach trade deal this weekend - Reuters
Investing.com -- Apple’s iPhone sales have posted a sharp rebound in China following a fresh round of targeted discounts and government-backed subsidies, brokerage firm Jefferies said in a Sunday report. The report notes that sales volumes grew more than 50% year-on-year for two consecutive weeks.
Jefferies attributes the surge to significant promotions introduced by Apple (NASDAQ:AAPL) on specific models. The iPhone 16 with 256GB memory was offered at a 13% discount by Apple, and 28% after applying government subsidies.
Similarly, the 16 Pro with 128GB memory was discounted by 25%, rising to 31% with subsidies. These targeted discounts were first introduced on May 25, paused briefly, then resumed on May 28 and expired on June 1.
“That has driven 50%+ YoY growth in sales volume for two weeks in a row,” Jefferies analysts led by Edison Lee said in a note.
Last year, discounts on the iPhone 15 series drove only a one-week volume spike of 45%. In contrast, this year’s more focused strategy appears to have sustained stronger momentum.
Year-to-date, iPhone volume has now rebounded to being down just 1% year-over-year, compared to down 8-9% two weeks ago. However, Jefferies analysts said “this is likely pulling in demand; thus, we remain cautious on full-year demand.”
While iPhone shipments in April grew by about 1% year-on-year, Android shipments fell 2.1%, dragging total smartphone shipments down 1.6%. Jefferies notes that Android brands offered broad 618 promotional discounts to clear high inventory levels, but these efforts resulted in only low single-digit volume growth.
Inventory data show iPhone stock levels increased by 11 days on a six-month rolling basis but improved by 8 days since March. On the other hand, Android inventory days rose by 19 days over the same period and declined by just 1 day from March, indicating a slower pace of inventory clearance for local brands.
Despite iPhone sales recovery, the broker maintains a preference for Xiaomi (OTC:XIACF) over Apple, citing the Chinese brand’s global market share gains and rising average selling prices.
The report also flags potential cost pressure for Apple tied to U.S. President Donald Trump’s tariff policies, as well as legal headwinds for its Services segment.