Facing the "618" shopping festival: Apple Inc. (AAPL.US) has reduced Pro model prices by 1,000 yuan, and investment banks are optimistic about the iPhone 17 series grabbing market share against the trend.

Note that Apple Inc. recently reduced the prices of some iPhone 17 models in the Chinese market, just before the annual "618" shopping festival. Investment bank Wedbush Securities believes that this is Apple Inc.'s attempt to boost its market share in China. Analyst Matt Bryson said, "We believe that Apple Inc. has a component pricing advantage in its whole machine production by the end of 2025 (due to stable memory prices in the inflationary cycle). We speculate that Apple Inc. may be leveraging this advantage to compete for market share in the production of the iPhone 17, in response to: 1) iPhone 18 may bear higher memory costs; and/or 2) the need for higher specifications (such as edge AI products) in new software/services in the future, which may lead to a gradual path of hardware cost absorption with the increase in high-margin service/software fees." According to prices displayed on Chinese e-commerce platforms such as JD.com, Inc. Sponsored ADR Class A and Alibaba Group Holding Limited Sponsored ADR's Taobao, the prices of some iPhone 17 Pro models have been reduced by 1000 Chinese yuan (approximately $138 USD). Taking into account trade-in subsidies and other promotional activities, the actual price of the iPhone 17 Pro has now dropped to 6999 Chinese yuan. The base model iPhone 17 has also received a price reduction. Products from other mobile phone manufacturers, including Huawei, Xiaomi, and other brands, have also seen price reductions. China introduced a nationwide trade-in subsidy policy a few years ago, which in some cases can reduce the price of a new smartphone by 15%, with a subsidy cap of 500 Chinese yuan. Despite other mobile phone manufacturers lowering their prices, Bryson believes that Apple Inc., and to some extent Samsung, have a "unique" ability to increase shipments during periods of rising component costs, which will ultimately result in an increase in smartphone prices.