On January 10, Apple announced the establishment of its new company in China. This time it may be related to the implementation of Apple Intelligence (Apple Intelligence). Information on the enterprise registration platform shows that on January 10, Apple Technology Development (Shanghai) Co., Ltd. was established with a registered capital of US$35 million. The company's business scope involves software development, big data services, data processing services, and storage support services.
China Business News reporter checked public information and found that as early as September 2017, Apple had established Apple Technical Services (Guizhou) Co., Ltd. in China. According to media reports at the time, Apple invested US$1 billion to build a main data center in Guizhou. Tejas Kirit Gala, the legal representative of the newly established Apple Shanghai Company, just withdrew from Apple Guizhou Company in December 2024. In addition, Apple also has a technical services company in Ulanqab.
Apple China did not respond to CBN reporters on the future operating plans of the newly established technology development company in Shanghai. It is also unclear whether Apple has new plans to build a large data center in Shanghai. Public information does not show that Apple has invested in the construction of a data center in Shanghai, and reporters have not learned from the industry that Apple has established a data center in Shanghai.
The establishment of Apple's new company in Shanghai comes at an important time when the technology giant is actively introducing artificial intelligence (AI) services to iPhones sold in the Chinese market. This plan is still facing regulatory approval, and whether Apple Smart can be launched in China is still pending.
In 2024, Apple CEO Cook will visit China three times. During his visit to China in October last year, he was asked about when Apple would launch an AI mobile phone to the Chinese market. At that time, Cook said: "We are working hard to advance. There is a very specific regulatory process behind this. We need to complete this process and hope to bring Apple intelligence to Chinese consumers as soon as possible."
Zhang Junyi, former managing partner of Oliver Wyman, told China Business News: "For Apple, one of the prerequisites for launching the Apple Intelligence suite in China is that the data must stay local. The latest company established in Shanghai has also made clear the requirements for local data processing."
Previously, Zhong Xiaolei, an analyst at the research institution Canalys, told China Business News that he predicted that Apple is likely to launch its own large model outside of ChatGPT and become one of the foreign artificial intelligence models most likely to obtain regulatory approval in China.
In terms of cooperation in the field of AI smartphones, Apple has also been revealed to be negotiating with Chinese technology companies such as Tencent and ByteDance to explore how to integrate the models of these two companies into the iPhone system to meet the needs of Chinese users.
Zhong Xiaolei said that the longer Apple Smart is delayed in China, the more likely it will put Apple at a disadvantage in competitive position, because other Chinese smartphone manufacturers are competing to integrate artificial intelligence functions and build independent terminal-side and cloud large models (LLM). According to Canalys research and analysis report, in the third quarter of 2024, AI mobile phone shipments in the Chinese market increased by nearly 600% year-on-year.
Analysts at the investment bank Barclays predict that the Chinese version of Apple's AI phone will be launched in 2025. The agency also said that Apple will have to cut prices to gain more share of the Chinese market.
Just at the beginning of this year, Apple adopted a rare subsidy and preferential measure for new models. It was also the second official promotion after the release of the iPhone 16 series. The price of all products was reduced by up to 800 yuan, an unprecedented price reduction.
According to the Chinese mobile phone market data for the third quarter of 2024 previously released by Canalys, Apple shipped 10 million units in the Chinese market during the quarter, with a market share of 14%, a year-on-year decrease of 6%, ranking fifth, behind vivo, Huawei, Xiaomi and other manufacturers. In the second quarter of 2024, Apple fell out of the top five in the rankings of multiple reports.
According to a Counterpoint report, during the "Double 11" shopping festival from October 18 to November 10, 2024, Apple iPhone sales in China dropped by double digits year-on-year.
Ivan Lam, a senior research analyst at research firm Counterpoint Research, believes that the return of Huawei's high-end phones has directly affected the performance of Apple's mobile phones in the Chinese market. In addition, new models launched by Chinese manufacturers have shown significant progress in hardware specifications and software functions, especially in terms of intelligent AI functions.
Faced with fierce competition in the Chinese market, Cook emphasized many times last year that China is an indispensable part of Apple's global strategy. He attended the opening ceremony of Apple's new Shanghai store in 2024 and unveiled it in person. During a recent visit to China, Cook talked about Chinese partners. He said: "I attach great importance to them. Without Chinese partners, Apple would not be able to achieve what it is today."
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