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A man checks his phone next to the Apple logo outside its store on September 13, 2023 in Shanghai, China.
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Apple is using upcoming AI features to boost iPhone sales, especially in China, where demand is lagging. But there’s a problem: ChatGPT — soon to be integrated into Siri — is banned in China.
At a presentation earlier this month, Apple (AAPL) demonstrated its proprietary technology called Apple Intelligence to power the new AI features and announced Collaboration with OpenAI to use the viral ChatGPT tool to a limited extent as well. (When Siri is activated and more help is needed to respond to a request, ChatGPT may kick in.)
The move shows Apple trying to get up to speed on the latest buzz technology at a time when tech rivals like Microsoft, Google, Meta and Samsung have already found their own AI. leg. A deal with OpenAI could help Apple close the gap.
But Demon is one of the first countries in the world to regulate the generative artificial intelligence technology that powers these popular services. In August, the Cyberspace Administration of China, the country’s top internet watchdog, launched. new instructions for industry, requiring companies to obtain approval before posting. Organization confirmed As of March, more than 100 AI models, all from Chinese companies.
according to report Apple is looking for a Chinese artificial intelligence company to partner with ahead of the iPhone’s expected September release, but has yet to reach a deal, the Wall Street Journal reported Thursday.
Apple did not respond to a request for comment.
The need to find a partner — and quickly — comes at a time when Apple’s smartphone sales are on the rise fell down According to market research firm IDC, the staggering 10% in the first quarter of this year was mainly due to a sharp decline in iPhone sales in China. The company lost momentum in China as nationalism, a rough economy and increased competition also hurt sales. China is the company’s second largest market.
Limitations on new AI tools may not be unique to China. In a statement sent to CNN after this article was published, Apple said it was “highly motivated” to bring the features to customers around the world, but also faced regulatory challenges in the European Union.
The company said it does not believe it can roll out its AI features in Europe this year.
“Due to the regulatory uncertainties created by the Digital Markets Act (DMA), we do not believe we will be able to offer three of these features – iPhone Mirroring, SharePlay Screen Sharing enhancements and Apple Intelligence – to our EU users. this year”, the spokesman said in a statement.
“In particular, we are concerned that the DMA’s interoperability requirements may force us to risk the integrity of our products, user privacy, and data security.” “We are committed to working with the European Commission to find a solution that will allow us to deliver these features to our EU customers without compromising their security.”
Concerns about iPhone sales in China continue to grow as Chinese smartphone brand Huawei’s smartphone sales surged 70% in the first quarter, according to Counterpoint Research.
If a solution isn’t worked out by the fall, Chinese consumers may feel short-changed and choose to wait until they get the full AI experience with Apple, he added.
“Apple will likely look for a local partner in China instead of OpenAI because, simply put, it’s needed,” said Nabila Popal, CEO of IDC Research. “There are Chinese consumers they expect their premium phones to have the latest AI functionality and may be reluctant to spend more than $1,000 for such devices. it doesn’t have all the AI bells and whistles.
“The real growth for Apple in China will come in the long term, as Apple Intelligence evolves to offer more use cases, language support expands beyond English, and Siri can use other local AI models to provide ChatGPT-like functionality,” Popal said. .
ABI Research analyst Reece Hayden noted that some AI companies in China, meanwhile, may be better suited to target their own consumers, for example by offering more local dialects than those currently found in foreign AI models.
Apple would not be the first foreign company to work with China’s Cyberspace Administration for artificial intelligence and smartphones. In January, Samsung merged with Chinese tech giant Baidu (BEGINNING) to use its AI model to power the translation service. It is working with another AI firm, Meitu, for photo editing tools. Elsewhere in the world, Samsung uses Google’s (together with Google) proprietary AI technology.GOOGLE) AI model Gemini, also banned in China.
According to Counterpoint Research, Samsung accounts for less than 1% of the total market in China.
While time is running out to secure the partnership ahead of Apple’s software release in the fall, Counterpoint research director Jeff Fieldhack believes it could close a deal in time.
“Apple should be able to build a partnership very quickly because it has such a strong global install base, and it would be a gem for these companies to work with them,” he said, noting that they will soon be established as one company. AI power player in the country.