The latest Apple iPhone models currently cost around a thousand dollars, which makes it a bit out of reach for most consumers. This is also particularly true in China, where Apple is currently losing a lot of sales. In an effort to boost its sales in the country, the company has reportedly partnered with the Chinese mobile payments network, Alipay, to allow customers to get their iPhones through an interest-free installment plan.
According to local media reports, the financing scheme will involve up to two years of staggered payments without any added interests. Alipay and Apple both announced that customers could avail of the new financing scheme for any product in their lineup that is worth more than 4,000 Yuan or US$595.
With up to two years to pay off the loan, consumers in China now have the ability to get the latest products from the company. Through the partnership, Alipay will be acting as a virtual credit card to make the initial purchase with a small percentage of the product's original price. This way, Alipay will be able to make some money out of every purchase, while Apple will enjoy increased sales through their relatively affordable financing option.
Among the new iPhone models, the iPhone XR is currently the most affordable, priced at around 6,499 Yuan or US$965. Despite the new financing scheme, Apple's iPhones are still quite expensive. The top-of-the-line iPhone XS Max tops out at around US$1,449 or almost 10,000 Yuan. The price is twice that of the price of a new Huawei Mate 20 and three times that of a new Xiaomi Mi Mix 3.
Due to the various Android alternatives available, which are significantly cheaper, and the continued economic pressures, Apple has lost a lot of business in China. Apple previously revealed that it lost nearly US$5 billion in revenue in the country when compared to 2017.
The company's CEO Tim Cook previously mentioned in an interview that 100 percent of the shortfall was due to lagging iPhone sales. Cook also mentioned that the slowdown was mainly due to economic pressures and the growing trade tensions between the country and the United States. The new partnership between Apple and Alipay is seen as a possible remedy to increase the sales numbers in the country. Prior to the deal, Alipay already offered customers 12-month financing schemes for different Apple products. The new 24-month offer will likely be more attractive to more consumers who are not capable of shelling out so much money for the new models.
