Tim Cook is probably going visiting China to bolster support for Apple Intelligence, analysts say

In his second visit to China this 12 months, Apple CEO Tim Cook met with Beijing officials and native partners as the corporate faces challenges with its launch of Apple intelligence and increased competition available in the market. 

China’s Minister of Industry and Information Technology met with the CEO in Beijing on Wednesday to debate Apple’s development in China, network data security and cloud services, in response to a ministry statement. 

In the course of the conversation, the ministry said Cook signaled Apple’s commitment to the country, promising to extend investment available in the market and to grow alongside Chinese corporations. He also met with the leaders of several local Chinese firms in the identical day, including China Mobile Chairman Yang Jie, to debate digital content and 5G product cooperation, in response to local reports. 

Ivan Lam, senior research analyst for Counterpoint Research, said the timing of the trip is critical, coming as local competitors are introducing updated operating systems that integrate AI and latest flagship products.

“This trip seems notable now as the corporate may very well be trying to shore up collaboration with local players to launch Apple Intelligence in China,” Lam said. 

Le Xuan Chiew, Canalys’ analyst specializing in Apple strategy research, said the roll out of Apple Intelligence in China was likely the most important motivation for Cook’s trip, in addition to to “bolster the importance of China to Apple’s global strategy.”

The timeline for the introduction of Apple Intelligence in China stays “uncertain” and can depend largely on regulatory approvals, which could explain a number of the messaging focus of his China trip, Chiew said.

This may very well be an issue for the corporate as the shortage of Apple Intelligence on Chinese devices is anticipated to weaken the motivation for users to upgrade to the iPhone 16, he added. 

Apple Intelligence is the corporate’s artificial intelligence play, which goals to bring AI across its devices, with features similar to an improved voice assistant and tools that robotically organize emails and transcribe and summarize audio recordings.

While the corporate has said Apple Intelligence will roll out in U.S. English this fall, it has been more quiet on plans for the product offering in China.

Cook often travels to China — Apple’s largest overseas market — to launch products and factories, visit suppliers and meet with local officials. During his visit in March, he had been in Shanghai for the opening of a latest retail store. He also visited Chengdu this time last 12 months as Apple faced lackluster demand on this planet’s second largest economy.

During his current trip, Cook was photographed visiting the offices of the Chinese social media giant Weibo and meeting with its CEO in a post on his personal Weibo account. Weibo is one in every of the local app developers that has launched applications for Apple’s Vision Pro mixed reality headset, which was released within the Chinese market in June. 

Apple successfully launched the iPhone 16, its latest model within the series, in China this September, and the brand new phones got off to a powerful start. Sales were up 20% in the primary three weeks since launch, in comparison with the 2023 model, in response to data from research firm Counterpoint.

But despite the successful product launch, overall iPhone unit sales, including older models, were down 2% year-over-year in China in the course of the three-week period. 

Apple has faced dwindling market share in China amid increased competition with local players and an increasing preference amongst Chinese consumers to select domestically made goods.

The corporate saw its market share within the second quarter fall 5.7% year-over-year, in response to Counterpoint. 

After it made a splash with a surprise 5G model last 12 months, Huawei, one in every of Apple’s most important competitors in China, launched competing handsets the identical day the iPhone 16 went on sale. 

“Huawei’s recent resurgence within the high-end market, driven by its in-house chips and HarmonyOS ecosystem, has intensified the competitive landscape, making it harder for Apple to take care of its leadership position,” said Canalys’s Chiew. 

Apple’s Vision Pro could also face more competition available in the market as Huawei is reportedly gearing as much as launch its own competing headset as soon as next week.

— CNBC’s Arjun Kharpal contributed to this report