According to a new report, Apple is partnering up with Alibaba to bring AI features to the iPhone in the Chinese market. This could boost sales in the region as sales have been plummeting recently due to low demand and increasing competition from other local players like Xiaomi, Oppo, and Huawei that already offer AI features with their devices.
Apple had also considered other players like Baidu and Tencent but the AI models did not reportedly meet Apple's standards for Apple Intelligence. The company also didn't consider DeepSeek as it lacked the necessary resources and experience to support such a large customer.
For starters, Alibaba Group is a Chinese tech company that specializes in e-commerce, retail, internet, and other technology. The company has also been investing a lot in AI, and a lot of its own AI models have made headlines for good performance. With vast amounts of consumer data and AI expertise, it is perhaps a no-brainer for Apple to go with Alibaba in China.
Apple CEO Tim Cook had previously noted stronger sales in markets where Apple Intelligence is available, during the company's Q1 2025 earnings call.
"n markets where we have rolled out Apple Intelligence, the year-over-year performance on the iPhone 16 family was stronger than those where Apple Intelligence was not available.”
While the company's total revenue grew by 4% YoY in Q1 2025, China was perhaps a major hurdle where revenue dropped 11.1% YoY during the same period.
Analysts at Morgan Stanley also believe that this collaboration between Apple and Alibaba could be a "critical catalyst" for potentially reversing the sales slump in China.
Currently, the AI features are submitted to China's regulatory authorities for necessary approvals, to ensure compliance as China has some of the most stringent internet and data regulations.
Apple Intelligence is available in most regions of the world except China and the European Union in English (Australia), English (Canada), English (Ireland), English (New Zealand), English (South Africa), English (UK), and English (US). Apple says that it will add support for more languages such as Chinese, English (India), English (Singapore), French, German, Italian, Japanese, Korean, Portuguese, Spanish, Vietnamese, and more with a software update in April this year.
Source: The Information, Reuters
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