Apple opens talks to deliver AI to iPhones in China

Apple is said to have commenced discussions with Tencent Holdings and ByteDance to deliver its Apple Intelligence service to mainland China. 

As initially reported by Reuters, the approach to the Chinese heavyweights is necessary as Apple is required to work with a local AI model provider to make the expansion happen.

With the talks said to be at an early stage, a conclusion is not yet in sight, but there is likely to be plenty of interest in the lucrative contract. 

The Chinese market is very busy, populated with several AI providers, including Baidu. 

It has partnered with Apple but obstacles have appeared in the way of progress, with Baidu’s LLMs experiencing issues with prompts and accuracy in response to ordinary queries. To eradicate certain problems and boost AI performance, the company wanted access to user data, but that would violate Apple’s privacy policy.

The ongoing difficulty in adding AI tech to iPhones in China will have a significant impact on sales in the country if a workaround is not reached relatively soon. The US tech giant is already witnessing a declining market share in China which it will be keen to arrest, but the absence of key AI features on its devices is a contributing factor. 

In the third quarter, iPhone sales in China dropped 0.3% which contrasts sharply with the 42% spike in Huawei’s sales for the same period, as outlined by research company IDC. 

This comes after a successful 2023 in China, for Apple.

The September launch of the iPhone 16 in the world’s biggest smartphone market was undermined due to the lack of headline AI features.

In the US, Apple has been able to roll out iPhones powered with ChatGPT but the OpenAI service is not authorized for use in China.

Image credit: Via Midjourney

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