Alibaba and Apple Partner to Enhance iPhones with AI in China

# alibaba # apple # China

Alibaba on Thursday confirmed recent buzz about teaming up with Apple to bring AI features to iPhones sold in China. This move is a big deal for Apple, especially since iPhone sales have taken a nosedive in the world's biggest smartphone market. According to Apple's latest earnings report, iPhone sales in China dropped by 11% compared to last year. During the World Government Summit in Dubai, Alibaba's chairperson, Joseph Tsai, spilled the beans, saying, "Apple talked to a number of companies in China. In the end, they chose to do business with us. They want to use our AI to power their phones. We feel extremely honored to do business with a great company like Apple." Reports suggest that Apple's previous deal with China's Baidu hit some snags when trying to adapt the search giant's AI. Apple also reportedly looked into partnerships with ByteDance and DeepSeek before settling on Alibaba. These partnerships are crucial for U.S. companies like Apple as they navigate regulatory approval in China. Both Alibaba and Apple have reportedly submitted the necessary paperwork to local authorities. Before the most recent earnings call, Apple's CEO, Tim Cook, pointed out that the lack of Apple Intelligence, their in-house generative AI solution, played a role in slowing down international sales. "During the December quarter, we saw that in markets where we had rolled out Apple Intelligence, the year-over-year performance on the iPhone 16 family was stronger than those markets where we had not rolled out Apple Intelligence," Cook told CNBC. Apple is counting on Apple Intelligence to kickstart the next big iPhone "super cycle" — a term for a huge surge in device sales. However, Apple's slow rollout of its own generative AI solution has put a damper on its growth, especially as Google keeps rolling out new Gemini features on Samsung phones, Pixel devices, and other Android gadgets. Apple's market share in China has also been shrinking due to fierce competition at home. Vivo took the lead in the last quarter of the year, grabbing 17% of the market, according to Canalys. Huawei, which bounced back big time after sanctions from the first Trump administration, saw a 37% year-over-year increase in shipments, securing second place with 16% market share. Meanwhile, Apple, which had 24% of the market the year before, slipped to 15%, tying for third place with Xiaomi and Oppo. Apple is hoping the Alibaba deal will help claw back some of that lost ground, but even if the partnership gets the green light from regulators, Apple's future in China remains a bit murky. Tariffs and trade tensions could further mess with sales in this crucial market. Interestingly, Apple has been getting cozy with Donald Trump during his second term. Tim Cook donated $1 million to Trump's inaugural committee in January, and more recently, Apple followed Google's lead by renaming the Gulf of Mexico to the Gulf of America on its Maps app. TechCrunch has reached out to Apple for more details on the Alibaba deal. *TechCrunch has an AI-focused newsletter! Sign up here to get it in your inbox every Wednesday.*

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