Reuters Beijing, January 8 - China's 2025 consumer goods trade-in subsidy officially includes digital products such as smartphones on Wednesday, but requires that the single sale price does not exceed 6,000 yuan, which will make a number of domestic brands the main beneficiaries of this policy, while most models of Apple (AAPL.O) sold in China may be excluded.
The National Development and Reform Commission and the Ministry of Finance of China jointly issued a document on Wednesday, clarifying that the subsidy scope for the 2025 consumer goods trade-in program has added four categories of home appliances and three categories of digital products. Among them, for personal consumers purchasing three categories of digital products including smartphones, tablets, and smartwatches (with a single sale price not exceeding 6,000 yuan), a subsidy of 15% of the product sale price will be granted, with each consumer eligible for one subsidy per product category, and each subsidy not exceeding 500 yuan.
This means that if Apple and its platform partners do not actively lower their product prices, their mainstream models sold in China will not be able to enjoy the new purchase subsidies provided by the Chinese government.
Information on Apple's official website in China shows that the starting price of the iPhone 16 Pro model, which accounts for the company's current sales mainstay, is 7,999 yuan, clearly exceeding the 6,000 yuan limit proposed by the National Development and Reform Commission. The entry-level model, the iPhone 16, has a starting price of 5,999 yuan, but if consumers need models with more memory, such as 256GB, they will need to pay between 6,999 and 8,999 yuan.
In contrast to Apple, domestic brands offer a wider variety of models, covering all price ranges from budget to high-end flagship, and their high-end models are mainly concentrated in the 5,000-6,000 yuan range, which will make domestic brands the obvious main beneficiaries of the new purchase subsidies.
&#34;Support different brands to participate in the subsidy&#34;
Li Gang, director of the Consumption Promotion Department of the Ministry of Commerce, emphasized at a press conference that for the new purchase subsidies for products such as smartphones, support will be given to eligible &#34;different brands and different models&#34; to participate in the subsidy.
&#34;No subsidy above 6,000 yuan, 15% subsidy below 6,000 yuan, but the maximum subsidy is only 500 yuan. This means that to maximize cost-effectiveness, you need to buy a phone below 3,500 yuan,&#34; a Weibo user commented online.
&#34;I was originally planning to take advantage of the national subsidy to buy an expensive phone, but now, let alone an expensive phone, whether to change it or not is still up in the air,&#34; another user &#34;complained&#34; online.
Apple's supply chain stocks in the Hong Kong and mainland markets fell on Wednesday, with Luxshare Precision (002475.SZ) dropping as much as 3.9%, and Sunny Optical Technology (2382.HK) listed in Hong Kong falling by up to 8%.
According to estimates by analysts at Jefferies, Android supply chain companies will be the main beneficiaries of the Chinese smartphone subsidies. In addition to eating into Apple's market share, high-end Android models can still see an increase in sales after raising prices; moreover, some local governments launched smartphone subsidies in November last year, but observed that iPhone sales did not increase.
&#34;This may indicate that a subsidy amount of 1,000-1,500 yuan may still not make the iPhone attractive,&#34; Jefferies pointed out.
Apple's iPhone is facing fierce competition in the Chinese market from rivals such as Huawei (HWT.UL) and Xiaomi (1810.HK). Additionally, as the company has yet to determine its partner for AI services in China, the iPhone 16 series has not immediately gained favor with Chinese consumers
Chinese domestic brands have previously launched smartphones equipped with AI features.
According to data from the China Academy of Information and Communications Technology, the domestic smartphone shipment volume in November last year decreased by 5.1% year-on-year, with overseas brands, including iPhone, seeing a nearly 50% drop in shipments. (End)
(Reported by Lin Yuhan; Edited by Yang Shuzhen)

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China will launch a trade-in subsidy policy in 2025, requiring smartphone prices to be below 6,000 yuan to qualify for the subsidy. This policy will benefit domestic brands, as their product prices are diverse and meet the subsidy criteria. Most mainstream models from Apple exceed this price limit and may not qualify for the subsidy. The subsidy is 15% of the product price, with a maximum of 500 yuan per consumer per product category

- China's 2025 consumer goods trade-in subsidy now includes digital products like smartphones, with a price cap of 6,000 yuan, favoring domestic brands over Apple.  
- The subsidy offers 15% off the purchase price for eligible products, with a maximum rebate of 500 yuan, impacting Apple's market share as most of its models exceed the price limit.  
- Analysts predict that Android supply chain companies will benefit significantly from the subsidy, while Apple's sales may decline due to increased competition from local brands.

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China sets a smartphone "national subsidy" threshold of 6,000 yuan, expected to be unfavorable for Apple, with domestic brands emerging as winners