Apple has entered into a strategic partnership with China’s Alibaba Group to develop AI-powered features for iPhones in the Chinese market, the South China Morning Post reported on Tuesday. The collaboration comes as Apple faces declining sales in China, where its lack of local AI capabilities has been a competitive disadvantage.
According to sources familiar with the deal, Apple selected Alibaba due to the strength of its Qwen AI model, which has been recognized as a leader in artificial intelligence innovation. Apple’s iPhone sales in China dropped by 11% recently, with CEO Tim Cook citing the absence of advanced AI features as a key factor, while local rivals such as Huawei have leveraged AI to attract consumers. After evaluating several potential partners, including DeepSeek and ByteDance, Apple ultimately opted for Alibaba, whose latest Qwen 2.5 model has outperformed competitors like DeepSeek-V3.
Industry experts see the partnership as a validation of Alibaba’s AI capabilities and a potential turning point for Apple in China. Morningstar senior analyst Chelsey Lam noted that having Alibaba as a partner could boost Apple’s position and lead to further collaboration with other firms. Both companies have submitted their co-developed AI features for iPhones to China’s cyberspace regulator for approval, a necessary step before the technology can be deployed in the country.
