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Apple Faces Tough Competition in China as Rivals Embrace AI and Foldable Designs

Apple is under pressure to respond to market trends as Chinese rivals prepare to launch more high-end phones. The slow integration of AI features in iPhones and the popularity of foldable phones in China pose challenges for Apple. Apple is reportedly developing prototypes for a clamshell, foldable iPhone.

Credit: SCMP

Apple, the leading player in China's smartphone market at the end of 2023, is facing challenges due to the slow integration of artificial intelligence (AI) features in its iPhones and the growing popularity of foldable phones in the country. Chinese rivals are gearing up to launch more high-end phones, putting pressure on Apple to respond to market trends.


According to a report by tech media outlet The Information, Apple is developing prototypes for a clamshell, foldable iPhone. However, the Cupertino-based company has not yet commented on this development.


While Apple recently released an open-source AI model called MLLM-Guided Image Editing (MGIE), which allows users to edit photos based on text inputs, its progress in generative AI innovation has been relatively slower compared to its competitors. Rivals are rushing ahead with self-developed large language models (LLMs) and high-end foldable handsets.


Analysts have expressed concerns about Apple's slower pace in AI innovation, as it may impact the company's image as a tech leader, especially in a market like China that demands constant innovation. Will Wong, senior research manager for client devices at IDC Asia-Pacific, believes that Apple will prioritise delivering a favorable user experience, even if it is not the first to introduce new technology to its products.


However, Wong does not expect iPhone shipment growth to return to positive territory in China in 2024. Despite leading the market, Apple reported a nearly 13% drop in revenue from Greater China in the December quarter, while sales rose in other regions.


Recent data suggests that Apple's weekly smartphone shipments in China have declined by 30 to 40% in the past few weeks. This decline is attributed to the resurgence of Huawei and the increasing preference for foldable phones among high-end users in the Chinese market.


Huawei, which regained the top spot in China's smartphone market in the first two weeks of 2024, poses a significant challenge to Apple. The company's strong local brand name and potential to bring innovative technology, including foldable-related products, to consumers are expected to support its momentum.


In the global premium smartphone market, Apple remains the undisputed leader with a dominant 71% share. However, its share in this segment has declined from 75% in 2022 due to the resurgence of Huawei and the gains made by Samsung Electronics.


As Chinese rivals race ahead with generative AI and foldable designs, Apple faces the challenge of keeping up with market trends and delivering innovative products to maintain its position in the highly competitive Chinese smartphone market.

 
  • Apple is under pressure to respond to market trends as Chinese rivals prepare to launch more high-end phones.

  • The slow integration of AI features in iPhones and the popularity of foldable phones in China pose challenges for Apple.

  • Apple is reportedly developing prototypes for a clamshell, foldable iPhone.


Source: SCMP


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