Apple caught in subsidy price cap

Staff reporter and Reuters

A substantial number of Apple's latest offerings may be left out of China's new round of subsidies, as the country capped the selling price of each eligible product at 6,000 yuan (HK$6,363).

Individual consumers will be offered a subsidy of 15 percent of selling prices when buying smartphones, tablets and smart bracelets, according to a document issued by China's top state planner and the finance ministry.

But products should not be sold for more than 6,000 yuan per piece, the file said.

Every consumer will be allowed to buy only one piece of each eligible product type, and given a subsidy of up to 500 yuan per device. However, the top products in Apple's latest iPhone series - 16 Pro Max and 16 Pro - are priced from 9,999 yuan and 7,999 yuan respectively, according to its mainland China unit's website.

Only the base level iPhone 16 has a price tag starting at 5,999 yuan, just below the cap.

China also added more home appliances to the list of products that can be used in its consumer trade-in scheme, in an effort to revive demand in the sluggish household sector.

Microwave ovens, water purifiers, dishwashing machines and rice cookers will be included in the trade-in scheme for home appliances this year. Notably, the country increased the maximum subsidy for air conditioners from one to three pieces per consumer.

The increase in the number of subsidized air conditioners comes after Beijing took into account "the actual needs of residential households," the National Development and Reform Commission said.

While it did not specify the total cost of the incentives, a finance ministry official said the government had so far allocated 81 billion yuan for consumer goods trade-ins to support consumption in 2025.

The new measures are part of a broader plan to spur growth in the world's second-largest economy in 2025, where a severe property crisis has eroded consumer wealth and hurt household spending. China's consumer sector has been a particular pain point for the economy, with analysts and policy advisers calling for urgent measures to get households spending again.

China has also renewed a trade-in subsidy of up to 20,000 yuan to help underpin sales of fuel-efficient vehicles, including electric cars and hybrids.

Meanwhile in Hong Kong, shares declined for Apple component suppliers.

Sunny Optical Technology (2382) dropped 7.58 percent, Q Technology (1478) lost 4.7 percent, and BYD Electronic International (0285) dipped 3.23 percent.