Apple's iPhone shipments in China surge 40% in May amid aggressive discounting

BEIJING (Reuters) -Apple's smartphone shipments in China rose nearly 40% in May from a year earlier, extending a rebound seen in April, data from a research firm affiliated with the Chinese government showed on Friday.

Shipments of foreign-branded phones in China increased by 1.425 million in May to 5.028 million units from 3.603 million a year earlier,calculations based on the data from the China Academy of Information and Communications Technology (CAICT) showed.

Although the data did not explicitly mention Apple, the company is the dominant foreign phone maker in China's smartphone-dominated market.

This suggests that the increase in foreign-brand phone shipments can be attributed to Apple's performance.

The jump in Apple's sales follows a weak performance by the U.S. tech giant in the world's biggest smartphone market earlier this year amid strong competition in the high-end smartphone category from local rivals such as Huawei.

The sales boost also comes after Apple launched an aggressive discounting campaign on its official Tmall site in China in May, offering price cuts of up to 2,300 yuan ($316.71)on select iPhone models.

Apple's May sales increase extended its growth streak for the past two months, including a 52% jump in April. This marks a significant improvement from the first two months of 2023, when the company experienced a 37% slump in sales.

Earlier last month, Apple CEO Tim Cook forecast iPhone sales growth in some markets, including China, after the company reported an 8.1% drop in second-quarter revenue from the Greater China region.

The price reduction in May, double the size of a discount it offered in February, comes after Huawei introduced in April its new series of high-end smartphones, the Pura 70, following the launch of the Mate 60 last August.

Huawei overtook Apple in the first quarter as the No. 2 smartphone vendor in China and is ramping up its retail strategy by opening more flagship stores and adding more retail distributors. Huawei spinoff Honor holds the top spot.

Overall phone sales in China increased by 16.5% to 30.33 million units in May, data from the CAICT showed.

($1 = 7.2622 Chinese yuan renminbi)

(Reporting by Beijing Newsroom; Editing by Anil D'Silva)