BRIEF: Alibaba to develop AI-powered iPhone with Apple for China

Alibaba Group Holding Ltd. (BABA.US; 9988.HK) and Apple Inc. (AAPL.US) have reportedly agreed to jointly develop and produce an iPhone equipped with artificial intelligence (AI) capabilities for the Chinese market, according to media reports.

The AI-powered iPhone would integrate Alibaba’s cloud computing and large model technologies with Apple’s latest hardware, enhancing functions such as voice recognition, image processing, and smart assistants. “Apple has always been very selective. They talked to some Chinese companies, and in the end, they chose to do business with us,” Alibaba Chairman Joe Tsai said at the World Government Summit in Dubai, according to financial media Caixin. “We are honored to work with such a great company as Apple.”

In 2024, Apple’s iPhone shipments in China dropped by 17%, as the company lost its position as the country’s top smartphone seller and fell to third place, behind Vivo and Huawei. Analysts believe the partnership with Alibaba could help Apple boost its iPhone sales in China, the world’s largest smartphone market.

Alibaba’s Hong Kong-listed shares surged as much as 9.2% to HK$124.30 on Thursday, reaching a three-year high, before paring gains to close up 2.5% at HK$116.70. Both Alibaba’s Hong Kong and U.S. shares are up over 40% so far this year.

By Lee Shih Ta

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