It is predicted that Tim Cook will travel to China to strengthen Apple's Intelligence backing, according to analysts.

It is predicted that Tim Cook will travel to China to strengthen Apple's Intelligence backing, according to analysts.
It is predicted that Tim Cook will travel to China to strengthen Apple's Intelligence backing, according to analysts.
  • The CEO had a meeting with the Minister of Industry and Information Technology of China, as well as the heads of some local companies, including China Mobile and Weibo.
  • The visit of analysts coincides with Apple's challenges in launching Apple Intelligence and facing intensified competition from local companies.

During his second trip to China in 2021, CEO Tim Cook met with Beijing officials and local partners to address challenges faced by the company with its launch of Apple intelligence and growing competition in the market.

On Wednesday, the CEO of Apple met with China's Minister of Industry and Information Technology in Beijing to discuss topics such as Apple's development in China, network data security, and cloud services, as stated by the ministry.

The ministry stated that Cook's actions during the conversation signaled Apple's dedication to the country, as he pledged to boost investment in the market and collaborate with Chinese companies. Additionally, Cook met with the leaders of several local Chinese firms, including China Mobile Chairman Yang Jie, to discuss digital content and 5G product cooperation, according to local reports.

According to Ivan Lam, senior research analyst at Counterpoint Research, the timing of the trip is significant as local competitors are launching updated operating systems that incorporate AI and new flagship products.

According to Lam, this trip is significant because the company may be considering strengthening partnerships with local players to introduce Apple Intelligence in China.

According to Le Xuan Chiew, Canalys' analyst for Apple strategy research, the primary reason for Cook's trip to China was likely the launch of Apple Intelligence, and to emphasize the significance of China in Apple's global strategy.

The uncertainty of the timeline for Apple Intelligence's introduction in China is largely dependent on regulatory approvals, which may have influenced the messaging focus of Chiew's China trip.

The lack of Apple Intelligence on Chinese devices may weaken the motivation for users to upgrade to the iPhone 16, according to him.

Apple Intelligence is the company's AI initiative that aims to integrate AI into its devices, including an enhanced voice assistant and tools that automatically sort emails and transcribe and summarize audio recordings.

Although the company has announced that Apple Intelligence will be available in U.S. English this fall, they have been less forthcoming about their plans for the product in China.

Apple frequently journeys to China, its biggest international market, to introduce products and establish factories, interact with suppliers, and engage with local authorities. In March, he was in Shanghai for the unveiling of a new retail store. Additionally, he visited Chengdu the previous year when Apple encountered sluggish demand in the world's second largest economy.

Cook visited Weibo's offices and met with its CEO during his current trip, as seen in a post on his personal Weibo account. Weibo is one of the local app developers that launched applications for Apple's Vision Pro mixed reality headset, which was released in the Chinese market in June.

The iPhone 16, the latest model in the series, was launched successfully by Apple in China in September. Sales of the new phones started off strongly, with a 20% increase in the first three weeks since launch, compared to the 2023 model, according to data from research firm Counterpoint.

Although the new iPhone model was launched successfully, the total sales of iPhones, including older models, decreased by 2% in China during the three-week period.

In China, Apple's market share has been declining due to intensified competition from local companies and a growing trend among Chinese consumers to opt for domestically produced products.

According to Counterpoint, the company's market share decreased by 5.7% in the second quarter compared to the same period last year.

Huawei, a major competitor of Apple in China, released competing handsets on the same day as the iPhone 16's release last year.

According to Chiew of Canalys, Huawei's recent rise in the high-end market, fueled by its own chips and HarmonyOS ecosystem, has intensified competition, making it more challenging for Apple to maintain its dominant position.

Huawei is reportedly planning to launch a competing headset next week, which could increase competition for Apple's Vision Pro in the market.

— CNBC's Arjun Kharpal contributed to this report

by Dylan Butts

Technology