6000 yuan Chinese subsidy hinders Apple Inc. (AAPL.US) sales fell 9% for seven consecutive quarters.

The Chinese smartphone market staged a "tale of two extremes" in the first quarter. The latest data from IDC showed that Apple Inc. (AAPL.US) was the only mainstream manufacturer to experience a decline in shipments, with sales plummeting by 9% to 9.8 million units year-on-year. The market share shrunk from 17.4% to 13.7%, dropping to fifth place, marking Apple Inc.'s seventh consecutive quarter of decline. Meanwhile, market leader Xiaomi (01810) defied the trend with a 40% increase in shipments to 13.3 million units, contributing to an overall industry growth of 3.3%. Behind this game of gains and losses, the 6,000 yuan policy threshold has become a key turning point. The consumer subsidy policy introduced earlier this year stipulated that smartphones priced below 820 US dollars (approximately 6,000 yuan) are eligible for a 15% government subsidy. IDC analyst Will Huang pointed out the crux of the matter: "Apple Inc.'s high-end pricing strategy has made it almost unable to benefit from the policy subsidies, while domestic manufacturers have successfully capitalized on the policy by offering budget-friendly models." The revealed data indicates a harsh competitive landscape: while companies like Xiaomi in the Android camp reap the benefits of subsidies with cost-effective models, Apple Inc., sticking to the high-end market, is faced with a dilemma - lowering prices may harm their brand's premium image, but not lowering prices results in continued loss of market share. This reshuffling of the market catalyzed by policies is pushing Apple Inc. towards a strategic crossroads.