Apple ties up with Ant Financial Services Group and several banks to ease purchase of interest free iPhones

While Apple’s market share in China have shrunk significantly, those of domestic smartphone makers including most notably Huawei, have expanded. Chinese consumers view those using iPhones as traitors. While Apple’s iPhones may be cost effective, unless it targets the core issue of nationalism, it would be surprising if it were to make any significant headway.

On Friday, in what is the first such move in China, Apple Inc has teamed up with China’s Ant Financial Services Group as well as several local banks to offer interest-free financing for its smartphones.

The move is aimed at maintaining if not increasing its footprint in the Chinese market.

Last month, in a rare revenue warning, Apple said the sales of iPhones in China, one of its key markets, was waning.

On its Chinese website, Apple has begun promoting a scheme under which customers can pay $40.31 (271 yuan) each month to purchase an iPhone XR, and 362 yuan each month for an iPhone XS.

Customers who trade in old models can get lower installments.

Further, consumers who spend more than 4,000 yuan from Apple will qualify for interest-free financing that can be paid over three, six, nine, 12 or 24 months, said Apple on its China website.

The 64GB versions of iPhone’s XR and XS models sell at official sticker prices of 6,499 yuan and 8,699, respectively.

The plan is being offered through Huabei, a consumer credit service run by Ant Financial, the payment affiliate of Alibaba.

Apple and Ant Financial declined to comment on the scheme.

Further, according to Apple’s China website, Agricultural Bank of China Ltd, China Construction Bank Corp, Industrial and Commercial bank of China, and China Merchants Bank Co Ltd, also offer financing schemes for Apple products, after a minimum purchases of 300 yuan.

China’s trade war with the U.S. has significantly shrunk its economy.

Apple is also facing strong competition from Chinese handset makers. Many Chinese electronics retailers, including JD.com and Suning have cut iPhone prices and offer discounts as deep as 20%.

According to data from IDC, a research firm, iPhone shipments to China have fallen by 19.9% during the fourth quarter of 2018 in comparison to the same period last year. Total smartphone shipments to China is also down by 9.7% over the same period; however the market shares of Chinese domestic brands such as Huawei, Oppo, and Vivo have expanded.

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