Alibaba Partners with Apple to Bring AI Features to iPhone for China Market

Alibaba and Apple have recently announced a cooperation agreement to integrate artificial intelligence technology into iPhones sold in the Chinese market. This collaboration is of great significance for Apple, as it has experienced a significant decline in sales in China, the world's largest smartphone market. According to Apple's latest financial report, iPhone sales in China decreased by 11% compared to the previous year.

Joseph Tsai, Executive Vice Chairman of Alibaba Group, revealed at the World Government Summit in Dubai that after negotiations with multiple Chinese companies, Apple ultimately chose to partner with Alibaba. He mentioned that Apple aims to leverage Alibaba's AI technology to enhance its phone performance.

Prior to this, Apple had attempted to collaborate with Baidu, the leading search engine in China, but encountered numerous challenges when integrating Baidu's AI technology into its products. Reports suggest that Apple also considered partnerships with ByteDance and DeepSeek, but eventually opted for Alibaba. Such partnerships are essential for American companies like Apple to gain regulatory approval in the Chinese market. It is understood that both Alibaba and Apple have submitted relevant materials to local authorities.

In a recent earnings call, Apple CEO Tim Cook highlighted that the absence of an in-house generative AI solution called Apple Intelligence was one of the reasons for the slowdown in international sales. Cook noted that markets where Apple Intelligence was launched showed stronger year-over-year performance for the iPhone 16 series compared to those without the technology.

Apple has been counting on Apple Intelligence to drive the next "super cycle" of iPhone sales, which refers to a significant increase in device sales. However, the company has faced challenges in terms of speed and strategy in rolling out its own generative AI solutions, resulting in slower growth. Meanwhile, Google continues to roll out new Gemini features through Samsung phones, Pixel devices, and various Android products.

Besides, intensified domestic competition in China has eroded Apple's market share. According to research firm Canalys, last quarter vivo led the market with a 17% share, while Huawei rebounded strongly following the first round of sanctions from the Trump administration, with shipments growing by 37% and capturing a 16% share. Apple's market share dropped from 24% in the same period last year to 15%, placing it third alongside Xiaomi and OPPO.

Apple hopes to reclaim some lost market share through its partnership with Alibaba, but even if the collaboration receives regulatory approval, uncertainties remain regarding Apple's future in China. Tariffs and trade tensions could further impact sales in this critical market.

It is worth noting that relations between Apple and Trump's second term administration have grown closer. Cook donated $1 million to Trump's inauguration committee in January this year. Recently, Apple followed Google's lead by renaming the Gulf of Mexico to the Gulf of America in its Maps app.

Currently, Apple has not provided additional comments regarding this collaboration with Alibaba.