Has Huawei Outsmarted Apple in the Race for AI Supremacy?

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What was supposed to herald a new era of AI for Apple has instead left many underwhelmed when the tech giant unveiled the iPhone 16 series, its first AI-powered smartphone line-up, which happens to be still in beta testing and expected to take months, if not years, to fully roll out globally. To make matters worse for the Cupertino, California-based smartphone maker, Chinese tech giant Huawei launched its new Mate XT smartphone just hours after the former’s event, boasting far more impressive AI features powered by Huawei’s in-house Kylin chips.

Huawei’s move showcases its ability to innovate despite facing US sanctions, but it also spells uncertainty for Apple’s market share in Mainland China, one of its most crucial markets. Let’s explore why.

Huawei Mate XT

The world’s first triple-foldable phone,
pic.twitter.com/BVFS7f34JD

The postponement in unveiling AI capabilities has led various market experts to speculate on whether Apple is fully prepared to launch AI applications mainstream. “With phrases being tossed around like ‘later this year’ and ‘early next year’, the overarching message from Apple regarding the iPhone 16 was: Next year will be better,” Reuters reported, citing Needham analyst Laura Martin.

The collection of applications from Apple, known as Apple Intelligence, has been under development for a considerable period. The technology has been a highlight since the company’s developer conference in June. Despite this, the initial versions of the new iPhones will not include this software, with many principal features planned for release next year.

Currently, this technology is mainly aimed at summarizing messages and notifications, not achieving the advanced levels seen in competitor products.

In China, the enthusiasm surrounding the Monday release of the iPhone 16 series quickly turned into frustration among many local Apple enthusiasts upon discovering that the AI functionalities would not be available in their language until the following year.

At the same time, Huawei’s AI assistant, featuring functions such as text summary, translation, and editing as well as sophisticated image manipulation capabilities like cropping out undesired parts of images, will become accessible when the Mate XT is released later this month. This postponement has led to doubts about the appeal of the new iPhones in China, particularly with stiff local competition from brands like Huawei.

“The lack of AI in China is similar to severing one of Apple’s arms,” commented one user on Weibo, China’s widely used microblogging platform. Another user sharply inquired, “With the main selling feature missing, shouldn’t we be charged half the price?” These comments underscore the increasing dissatisfaction among Chinese consumers who believe they are not receiving the full benefits of Apple’s most recent technological advancements, as reported by South China Morning Post.

In stark contrast, the new Huawei Mate XT, which boasts a triple-folding accordion screen, has already amassed over four million pre-orders without any deposit requirement, according to the brand’s official website. Market research firm IDC notes that the worldwide market for foldable smartphones approximated 4 million units in the second quarter alone.

“Today, we introduce a product everyone envisioned but couldn’t create. Our team has diligently worked for five years without relinquishing our goal,” stated Huawei executive director Richard Yu during the unveiling event.

Apple has not yet disclosed any collaboration with an AI partner in China for its Apple Intelligence technology due to the complex regulatory environment. The Ministry of Industry and Information Technology in China has authorized 188 large language models, but foreign companies have not been granted approval. Consequently, there’s uncertainty regarding the availability of Apple’s AI features in mainland China, despite potential releases in other Chinese-speaking areas. Apple’s official site mentions that the AI feature’s launch timing in China will be contingent on Chinese regulatory decisions.

Apple urgently needs to enhance its market position as its sales in China have declined, moving its rank from third to sixth in the world’s second-largest economy. Despite traditionally strong demand in China, where new iPhone launches have typically sparked significant excitement, Apple’s current standing needs to improve.

The market saw a notable shift when Huawei, based in Shenzhen, recently re-entered the high-end smartphone market with a new device equipped with a locally made chip, overcoming the challenges posed by US sanctions that had severed its connections to the global chipset supply chain.

The launch of the Mate 60 Pro took analysts and US officials by surprise. Additionally, Huawei has now introduced dual-fold smartphones to its product lineup and its robust sales figures in China allowed it to surpass Samsung Electronics, clinching the title of the world’s largest vendor of such devices earlier this year.

Apple Intelligence’s delayed entry into the Chinese market provides an opportunity for rivals like Huawei to increase their market share and position themselves as frontrunners in the AI-powered smartphone arena within their local market. This scenario could pose difficulties for Apple in regaining its footing once it launches its AI functionalities in China.

For Apple, the push into AI in China is a significant risk. Despite the strong brand presence, the slow introduction of AI capabilities in conjunction with fierce competition from revitalized domestic brands like Huawei presents formidable obstacles.

As changes continue to shape the smartphone landscape in China, Apple’s success may hinge on its adaptability in aligning its AI strategy with the local market demands.

(Image description by James Lee)

See also: Could an Apple-Meta partnership redefine the AI landscape?

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Tags: ai, artificial intelligence

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