Sales of the iPhone in China have fallen due to a lack of AI-driven features.
To bring Apple Intelligence to its second-largest smartphone market, Apple is going to have to sign deals with local providers, but so far has had no luck.
When Apple announced the new AI-based technology at its June 2024 WWDC event, it noted that the rollout would take place over the remainder of 2024, and initially only be available in US English.
Localization into other languages and conforming to regional legal requirements will be a challenge for Apple that is likely to delay international rollouts until early 2025. China, however, poses a unique set of regulatory hurdles.
Apple has been said to be looking for a China-based partner to help smooth the regulatory path. The company is thought to currently be in discussions with potential partners such as search-engine company Baidu, and e-commerce powerhouse Alibaba Group as potential partners, according to The Wall Street Journal.
This is due to restrictions in China around both AI offerings as well as requirement that Chinese data be hosted on Chinese servers. Apple had hoped to win approval of its own Large Language Model (LLM) and OpenAI partnership used by Siri, ChatGPT, and Apple Intelligence, but Chinese officials indicated that the company would have to use one of the already-approved LLMs from Chinese companies instead.
Rumors have claimed that a deal with Baidu had already been agreed on. This was later denied, and talks appear to be ongoing.
Apple is also struggling in the Chinese market due to these state-approved advantages for Chinese smartphone makers. Huawei and Xiaomi have already incorporated AI features into their smartphones, which are available now
As a result, the two companies have since become the top-selling brands in China. Although Apple’s iPhone market share has only fallen from 18 percent to 16 percent, this puts Apple in third place in China.
With the new iPhone 16 expected to debut in the fall, Apple hopes to establish local partnerships and win government approval in time to bring at least some of its Apple Intelligence features to the new model. Although it struggles against local competition, the iPhone is still the most popular foreign brand smartphone available in China.
