Reuters reports that Apple is partnering with Alibaba to implement AI features for iPhone users in China, following a decision against collaborating with DeepSeek. Apple initially considered Baidu, Tencent, and ByteDance before choosing Alibaba due to its extensive user data. This initiative is crucial as iPhone sales have declined, and AI smartphones are predicted to represent a significant market share in 2024.

Apple is reportedly collaborating with Alibaba to introduce advanced artificial intelligence (AI) features for iPhone users in China. This partnership was confirmed by sources cited in a Reuters report and is a shift from Apple’s initial consideration of working with DeepSeek, a startup that lacked the requisite manpower and experience to handle Apple’s large client base.

Before finalizing its partnership with Alibaba, Apple considered other Chinese giants including Baidu, Tencent, and ByteDance. Although Baidu was initially selected as a potential partner, its AI model development failed to meet Apple’s expectations, prompting the search for other options.

Alibaba was ultimately chosen due to its wealth of user data on shopping and payment habits, which is crucial for training AI models for personalized services. This decision comes in light of declining iPhone sales observed during the holiday season, highlighting the urgent need for Apple to launch these AI features in the competitive Chinese market.

As the technology landscape increasingly shifts towards AI-integrated devices, smartphones featuring on-device AI capabilities, including machine learning and generative AI, are anticipated to become mainstream. Reports suggest that AI smartphones could dominate 10% to 15% of the total production in 2024, predominantly within flagship models.

In summary, Apple is enhancing its iPhone offerings in China through a strategic partnership with Alibaba, leveraging the latter’s vast user data to develop AI features. This collaboration follows previous considerations of working with other companies that ultimately did not materialize due to unmet expectations. The move is particularly pertinent given recent declines in iPhone sales, as Apple aims to integrate AI to stay competitive in the evolving smartphone market.

Original Source: www.trendforce.com

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