• Apple’s iPhone 16 launch disappoints with delayed AI.
• Huawei’s advanced Mate XT upstages Apple’s iPhone 16 in China.

Apple’s launch of the iPhone 16 series, its first AI-powered smartphone lineup was supposed to be a big step forward in artificial intelligence for the tech giant.

However, the announcement disappointed many because the AI features are still in development and may take months to completely roll out globally. To further Apple’s problems, only hours after the iPhone event, Huawei unveiled its Mate XT smartphone, which features significantly more advanced AI capabilities driven by the company’s in-house Kylin CPUs.

Huawei’s timely release demonstrates its ability to innovate despite ongoing US sanctions, which raises questions about Apple’s competitiveness in China, a key market for Cupertino.

Is Apple’s AI strategy ready?

Apple’s delay in releasing AI features has raised questions about the company’s readiness to embrace AI in the smartphone sector. According to Needham analyst Laura Martin, Apple’s statement on the iPhone 16 may be summarised as “Next year will be better.” The AI suite, known as Apple Intelligence, was first presented at Apple’s developer conference in June. However, it will not be included in the first wave of iPhone 16s and many of the more intriguing features will be available only next year.

Apple’s AI technology is now limited to basic functions such as summarising notifications and communications. These features are significantly less intriguing than offered by competitor systems.

Disappointment in China

In China, one of Apple’s most crucial markets, the excitement surrounding the iPhone 16 quickly faded when it was revealed that the AI functions wouldn’t be available in Chinese until next year. Meanwhile, Huawei’s Mate XT includes an AI assistant with advanced features, such as text summarisation, content translation and photo editing—all available at launch.

Chinese consumers have expressed unhappiness as a result of the delay. Some have expressed dissatisfaction on social media, claiming that they are paying a premium for a product whose most interesting feature is not even available. One Weibo user noted, sarcastically, “With the main feature unavailable, shouldn’t we pay half the price?”

Huawei has already had over four million pre-orders for its Mate XT, which has a distinctive foldable design. During the unveiling, Huawei’s executive director, Richard Yu, proudly declared that the Mate XT symbolises a five-year milestone, emphasising the company’s sustained innovation in the face of external pressures.

The regulatory landscape and challenges for Apple in China

The challenges Apple faces in bringing AI to China are influenced by strict Chinese regulations. Even though 188 large language models have already been approved for public use, none has been produced by foreign companies. Apple has not announced its AI partner for China, which may delay the launch of Apple Intelligence in China. That is why the launch of Apple’s AI features in China is fully dependent on local regulatory approvals.

The uncertainties accompanying regulations may open the question of whether Apple’s AI capabilities will be available in mainland China at some point in the future, even if they have already been launched and are in use in other countries with Chinese-speaking populations. Apple will find itself at a notable disadvantage as it loses critical market share to competitors like Huawei, who have maintained up-to-date technology and have also been able to activate it effectively.

Apple’s problems in China are not new, but they are becoming more serious. Despite its historic strong regional demand, the company’s market position has slid from third to sixth. In the past, new iPhone releases sparked a shopping frenzy, but this year’s excitement is noticeably absent.

On the other hand, Huawei managed to make an impressive recovery last year. It re-entered the high-end smartphone market with the Mate 60 Pro, powered by a domestically-produced chip. This was in defiance of the US sanctions that had banned the company from accessing global semiconductor supplies. The competitive advantage in the foldable phone market confirms that Huawei’s strategy has succeeded and it has surpassed Samsung as the leading seller.

The road ahead for Apple

The delay in Apple Intelligence in China allows Huawei to improve its position in the Chinese smartphone market. Once Apple releases AI features, Huawei and other Chinese companies can further develop and deploy their AI-powered products and gain a leadership position.

The rate of Apple’s future success in China depends entirely on how quickly it integrates its AI strategy per local demands and the significant impositions of the Chinese government’s regulatory requirements. It is important to note that while the Apple brand remains popular due to customer loyalty, perceptions of its delays in AI readiness have accumulated. This means that the challenges it faces will increase the pressure to produce something exceptional. Time is ticking for Apple to regain its former position in one of the world’s most competitive markets.