While local competitors soared, Apple’s numbers dropped 9% compared to the same period last year — down to 9.8 million units.

This is the seventh consecutive quarter Apple has seen its shipment volume shrink in China. For a company that once shaped global tech culture, that’s a worrying trend.

At the heart of the issue? Pricing. Apple is sticking to its high-end strategy, but that playbook isn’t working anymore — at least not in China.

A new wave of government subsidies, rolled out in January, is giving Chinese consumers a 15% rebate on devices priced below 6,000 yuan (about $820). Most iPhones don’t qualify. But brands like Xiaomi do, and they’re cashing in.

Xiaomi shipped 13.3 million phones — a 40% jump from the same time last year. That puts it comfortably ahead of Apple in market share, as more Chinese buyers choose value over brand prestige.

“The subsidy scheme is clearly designed to boost domestic consumption, but it’s also giving Chinese brands a strong edge,” said IDC analyst Will Wong. “Apple’s premium pricing structure has prevented the U.S. company from capitalising on new government subsidies.”

Overall, China’s smartphone market grew by 3.3% in Q1. So while the pie got bigger, Apple’s slice got smaller. Its market share now sits at 13.7%, down from 17.4% in the previous quarter — a sharp drop in such a competitive space.

Now, to be fair, Apple isn’t doing badly in shipments everywhere. Globally, it shipped 57.9 million phones in Q1 — its best first-quarter performance ever, with a 10% increase year-on-year.

But China isn’t just another market. It’s the world’s largest consumer electronics battlefield, and losing ground here sends a strong signal.

Chinese consumers are changing. They’re more price-sensitive, more nationalistic, and less dazzled by the Apple logo. And with brands like Xiaomi, Oppo, and Vivo offering sleek design and solid performance at lower prices — backed now by government support — Apple’s old charm isn’t quite cutting it.

The company has a decision to make. Stick to its high-margin strategy and risk further erosion in one of its most important markets? Or rethink its approach to pricing and product positioning in China?

Anyways, this is beyond being one bad quarter. It’s about whether Apple can still compete in a market that’s no longer waiting to be impressed.

The multilateral lender, in a new report titled ‘Industrial Policy Is Not a Magic Cure for Slow Growth’, said most industrial policies rely heavily on costly subsidies or tax breaks, which could be detrimental to productivity and welfare if not effectively targeted.

According to the global lender, Industrial policy, in which governments support individual sectors, can drive innovation if done right.

It said striking the right balance was a crucial consideration, as history is full of cautionary tales of policy mistakes, high fiscal costs, and negative spillovers in other countries.

The report also noted that many countries were ramping up industrial policy to boost innovation in specific sectors in the hope of reigniting productivity and long-term growth amid security concerns.

The report read in part, “Most industrial policy relies heavily on costly subsidies or tax breaks, which can be detrimental for productivity and welfare if not effectively targeted.

“This is frequently the case, for example, when subsidies are misdirected toward politically connected sectors. In addition, discriminating against foreign firms can prove self-defeating, as such policies can trigger costly retaliation and most countries—even major advanced economies—rely on innovation done elsewhere.”

According to the report, the recent turn to industrial policy to support innovation in specific sectors and technologies is not a magic bullet.

“However, well-designed fiscal policies that support innovation and technology diffusion more broadly, with an emphasis on fundamental research that forms the basis of applied innovation, can lead to higher growth across countries and accelerate the transition to a greener and more digital economy,” it noted.

It advised governments deploying industrial policies to invest in technical capacity, recalibrate support as conditions change, and act in line with open and competitive markets.

It added, “In some cases, industrial policy can be justified, such as when it supports sectors that generate strong knowledge spillovers to the domestic economy (for example, in the semiconductor industry).

“Another important use case is driving green innovation—reaching net zero emissions will require technologies that do not yet exist. But subsidies to green innovation should be transparent, focused on environmental objectives, and complemented by robust carbon pricing to minimise fiscal costs.”

Since taking over the reins of power, the Bola Tinubu-led administration has embarked on widespread reforms premised on discontinuing subsidies that many analysts had blamed for Nigeria’s current economic woes

During his inauguration on May 29, 2023, President Bola Tinubu announced that the regime of fuel subsidy had come to an end for good.

Two weeks later, the Central Bank of Nigeria floated the local currency to allow it to find its true value.

The two major policy reforms, despite being met with criticism by some quarters of society, have received applause from international observers.

In an earlier report released in January, the IMF had commended Nigeria and three other countries for recent subsidy reforms that would create space for development spending.

It said, “Building resilience in the face of these trends requires countries to act. Some countries have made progress— for instance, Angola, The Gambia, Nigeria, and Zambia have taken steps to implement significant energy subsidy reforms to create space for development spending.”

It, however, expressed worry that many countries were lagging, especially in efforts to increase revenues, such as broadening the tax base, reducing tax exemptions, and increasing the efficiency of tax administration (Punch).

The TUC called for a conducive environment for negotiation and stated that the minimum wage should be increased by the end of June 2023, with consequential adjustments for the cost of living allowance.

In a statement issued by TUC President Festus Osifo and Secretary General Nuhu Toro, the following demands were highlighted:

1. Maintenance of the previous pump price of petrol (N185 per liter) while discussions continue.
2. Increase in the minimum wage from the current N30,000 to N200,000, with consequential adjustments on the cost of living allowance.
3. Inclusion of a representative of state governors in the negotiation process, with a commitment from all governors to implement the new minimum wage.
4. Tax holiday for employees earning less than N200,000 or $500 per month, whichever is higher.
5. Introduction of a PMS allowance for those earning between N200,000 and N500,000 or $500 to $1,200 per month, whichever is higher.
6. Maintenance of a stable exchange rate for retailing PMS, with a limit of two percent fluctuation for the next 10 years. If the fluctuation exceeds two percent, the minimum wage will automatically increase at the same rate.
7. Establishment of an intervention fund, with the government contributing N10 per liter on all locally consumed PMS, to address national issues in education, health, and housing. A governance structure involving labor, civil society, and government will manage the implementation.
8. Provision of mass transit vehicles by the federal government and the immediate setup of a subsidized transportation system by state governments.
9. Review of the National Health Insurance Scheme to cover more Nigerians and ensure an adequate supply of drugs.
10. Visitation to refineries undergoing rehabilitation to assess the progress and establish a timeline for completion.
11. Immediate constitution of the National Labour Advisory Council (NLAC) by the labor minister, allowing for discussions between government, labor, and employers on issues affecting workers.
12. Provision of direct subsidies for food items, starting with the allocation of $800 million. Access to the National Housing Fund (NHF) for genuine workers, with a framework to be discussed and agreed upon.
13. Deployment of Compressed Natural Gas (CNG) across the country as previously promised by the government, with the development of a framework and timeline.
14. Reduction of the cost of governance by 15 percent in 2024 and 30 percent in 2025 through a joint framework between labor and government.
15. Implementation of a comprehensive plan to maintain roads and expand the rail network nationwide, as well as the design of a social housing policy for workers through a rent-to-own system.
16. Assessment of the state of electricity in the country and the formulation of an action plan with defined timelines for improvement.

The TUC’s demands encompass a range of issues, focusing on improving workers’ welfare, reducing the cost of living, and addressing infrastructure and social challenges in Nigeria