Apple Inc. has teamed up with Chinese payments giant Ant Financial Services Group and some local banks to bid interest-free financing, its first such move in the country as it looks to boost declining smartphone sales.
The U.S. technology behemoth issued a rare revenue warning a month ago quoting weaker iPhone sales in China, one of its most important markets, where customer spending has taken a hit because of a stoppage in financial development.
On its China website, Apple is promoting the new scheme, under which consumers can pay 271 yuan ($40.31) every month to buy an iPhone XR, and 362 yuan every month for an iPhone XS. Consumers trading in old models can get low-priced installments.
Users purchasing products cost a minimum of 4,000 yuan worth from Apple would qualify for interest-free financing that can be paid over three, six, nine, 12 or 24 months, the website shows.
The 64GB versions of iPhone's XR and XS models sell at official sticker prices of 6,499 yuan and 8,699, respectively.
Apple is offering the plan through Huabei, a customer credit service run by Ant Financial, the payment associate of e-commerce giant Alibaba, Apple's China website shows.
Apple and Ant Financial refused to comment on the scheme.
China Construction Bank Corp, China Merchants Bank Co Ltd, Agricultural Bank of China Ltd and Industrial and Commercial bank of China Ltd also bid financing schemes for Apple products, with minimum buying of 300 yuan, Apple's China website shows.
Apple is facing headwinds in China where financial development slowed in 2018 to the weakest pace in 28 years, worsened by a crippling trade war with the United States. The U.S. firm is also battling rising rivalry from Chinese handset manufacturers.
Some Chinese electronics retailers including Alibaba-backed Suning and JD.com dropped iPhone prices lately, with discounts as high as 20 percent.
Information from research firm IDC shows iPhone shipments to China tumbled 19.9 percent in the fourth quarter of 2018 against a year earlier. Overall smartphone shipments to the country were down 9.7 percent over the same period, although local brands such as Huawei, Oppo, and Vivo still raised market share.
Apple's profits for its Greater China region dropped 27 percent year-on-year to $13 billion in the quarter ended December. CEO Tim Cook blamed macroeconomic conditions and currency fluctuations for Apple's overall flagging development.
The company has been improving its focus on its services business, including the App Store, mobile payments and music streaming, after the current dip in iPhone sales that generates most of its revenue.
It has teamed up with Goldman Sachs to issue credit cards that will be team up with iPhones and will help users manage their money, the U.S. stocks Journal reported, and quoting people familiar with the issue.