Apple Reportedly Partners with Alibaba for iPhone AI Features in China
Key Takeaways:
* Apple and Alibaba collaborate to develop artificial intelligence features for iPhones in China.
* Apple Intelligence remains unavailable in China despite its launch in October.
* Analysts believe the partnership will boost Apple's market presence and address sales challenges.
Detailed Report:
Apple (AAPL) and Chinese e-commerce behemoth Alibaba (BABA) are reportedly joining forces to develop features for Apple Intelligence on iPhones in China. Sources cited by Reuters, including The Information, indicate that the companies have teamed up on AI enhancements and submitted them to Chinese authorities for approval.
If approved, the alliance would introduce a crucial growth factor for iPhone upgrades in a market where Apple has faced recent setbacks. CEO Tim Cook previously highlighted record iPhone upgrades in the company's first fiscal quarter, particularly in regions offering Apple Intelligence. However, the AI features have been absent in China since their October launch, impacting Apple's performance during the critical holiday season.
Greater China remains the only region where Apple's first-quarter sales declined year-over-year, with iPhone sales falling short of analyst expectations. Morgan Stanley analysts speculate that the Alibaba partnership could become "a critical catalyst" for Apple's position in China, potentially resolving its iPhone sales slump.
JPMorgan echoes this sentiment, suggesting that the move aligns with "bull case expectations" surrounding Apple's anticipated iPhone 17 release later this year. Shares of Apple surged over 2% on Tuesday, while U.S.-listed shares of Alibaba gained 1%.