Why Apple iPhone 16 Could Lose the Smartphone Battle to Huawei in China

Apple's New iPhone Launch Faces AI Criticism in China

The recent release of Apple’s iPhone 16 has sparked controversy in China, with the glaring absence of robust artificial intelligence (AI) features drawing public disapproval.

As Apple struggles to maintain its footing in the world's largest smartphone market, particularly in the face of Huawei Technologies' growing dominance, the lack of AI functionality could become a significant hurdle for the U.S. tech giant.

Unveiled on Monday with high expectations, the iPhone 16 aimed to inspire consumers to upgrade their devices amid a notable slowdown in Apple’s smartphone sales, which contribute to more than half of the company’s overall revenue.

Yet, the new features seemed to fall short of public expectations, particularly with no mention of an AI partner in China, leaving Apple Intelligence — Apple’s proprietary AI software — set to support the Chinese language only in 2025.

Social Media Backlash Highlights AI Discontent

On Tuesday, the iPhone 16 launch dominated discussions on Chinese social media, with millions taking to Weibo, the Chinese equivalent of X (formerly Twitter), to express their dissatisfaction.

Notably, three out of the top ten trending topics on the platform revolved around the iPhone 16, with AI — or the lack thereof — becoming a focal point of frustration.

The hashtag “iPhone 16 Chinese version doesn’t support AI yet” amassed over 11.33 million views and drew more than 1,500 comments, reflecting the widespread disappointment.

One Weibo user bluntly questioned, summing up the sentiments of many:

“What’s the point of buying it if you can’t use AI?”

Another user pointed out:

“Without AI as the biggest selling point, it should be half price.”

This reflects how crucial AI has become as a selling point in the fiercely competitive smartphone market.

Huawei Emerges as a Growing Threat

While Apple’s launch dominated social media, Huawei Technologies loomed large in the background, preparing to unveil its own cutting-edge device — a three-way foldable smartphone — later the same day.

As Chinese consumers increasingly turn toward domestic brands, many have drawn comparisons between Apple’s offering and Huawei’s innovative devices.

One Weibo user, voicing the sentiment of a growing number of consumers, stated,

“Whether iPhone 16 has AI or not doesn’t affect me, because I’m going to buy Huawei’s tri-fold phone.”

This comment not only highlights the appeal of Huawei’s latest models but also serves as a stark reminder of the company’s rapid ascent in China.

In the second quarter of 2024, Huawei overtook Apple as the country’s third-largest smartphone vendor, underscoring its growing influence.

Price Cuts Fail to Impress Amid Domestic Competition

In response to intensifying competition and government restrictions limiting the use of foreign-branded smartphones, Apple had already slashed prices earlier this year in an attempt to boost sales in China.

However, this aggressive pricing strategy appears to have done little to counterbalance the appeal of local competitors like Huawei.

Despite the iPhone 16 and 16 Plus being priced similarly to the models they replace, the lack of AI innovation has left many consumers unconvinced.

While Apple remains a global leader in smartphone technology, Chinese consumers are increasingly drawn to devices that integrate AI as a key feature.

As a result, the absence of significant AI capabilities in the iPhone 16 may further erode Apple’s market share in the long term, according to some analysts.

Analysts Predict Limited Short-Term Impact but Raise Long-Term Concerns

Despite the immediate backlash, some analysts believe that the absence of AI in the iPhone 16 won’t significantly affect Apple’s short-term sales performance in China.

Toby Zhu, an analyst at Canalys, noted that “Chinese consumers are not yet driven to upgrade by AI capabilities.”

However, Zhu also warned that, over time, the growing emphasis on AI among domestic smartphone brands could undermine Apple’s competitive position:

“In the long run, as domestic brands use AI as a key differentiator for their flagship products, it will negatively affect Apple.”

He also added that the company needs to act swiftly to localise its offerings and establish an AI ecosystem in China.

Apple’s Ecosystem Remains a Draw for Loyal Users

While AI may be lacking, Apple’s powerful operating system and strong brand loyalty continue to attract consumers in China.

According to Will Wong, an analyst at IDC, the company’s “strong customer stickiness” remains a major asset.

He explained:

“The key competitive advantage of Apple is its strong customer stickiness. Thus, the replacement needs of the users of the iPhone 11, 12, or 13 series could still support the sales of Apple in the absence of AI.”

Though Huawei and other domestic brands are gaining ground, Apple’s existing user base may help the company weather the storm in the short term.

Wong further added:

“It’s still too early to say who will win.”

This leaves the question open of whether AI’s absence will ultimately be a turning point in Apple’s ongoing battle with Huawei in China.

Pre-Orders Begin Amid Uncertainty

Despite the mixed reactions, the pre-order window for the iPhone 16 opens this Friday through Chinese online retailers like JD.com, with deliveries scheduled to begin on September 20.

As the race between Apple and Huawei intensifies, the coming months will reveal whether the iPhone 16 can capture the hearts of Chinese consumers or if Huawei's AI-driven innovations will continue to shift the balance of power in the world’s largest smartphone market.

So, which do you support?