Faced with Chinese regulatory constraints and increasingly fierce local competition, Apple is seeking to adapt its artificial intelligence strategy for the Chinese market. The Cupertino giant is currently exploring several avenues to integrate AI functionalities into its iPhones sold in China. If Baidu was announced as a major partner, Apple seems to want to diversify by calling on Tencent and ByteDance at the same time.
Strategic partnerships in sight
Discussions are currently underway between Apple and two Chinese technology giants: ByteDance (owner of TikTok) and Tencent. These negotiations, although still at an early stage, aim to integrate their respective AI models, Doubao for ByteDance and Hunyuan for Tencent, into iPhones marketed on Chinese territory.
This approach is explained by the impossibility of using ChatGPT in China, even though Apple has just deployed the integration of OpenAI AI into its devices globally (in English only and outside the EU) via the iOS 18.2 update. Chinese regulations indeed require prior government approval for any generative AI service.
A crucial issue for Apple in China
This initiative comes in a particularly delicate context for Apple on the Chinese market. The company had a tough time in the second quarter of 2023, temporarily falling out of the top 5 smartphone sellers in China, before recovering in the third quarter. However, its sales still recorded a drop of 0.3% over one year.
Faced with this situation, the main threat comes from Huawei, which is experiencing a spectacular recovery with a 42% increase in its sales in the third quarter. The Chinese manufacturer particularly made an impression with its Mate 70 series, equipped with AI features powered by its own language model. This rise of Huawei, combined with the absence of advanced AI features in iPhones sold in China, represents a major challenge for Apple, which must quickly find a solution to maintain its position in this strategic market.
