Apple is taking its first concrete steps to roll out artificial intelligence features in mainland China, but CEO Tim Cook warned that a full integration of the revamped Siri AI there will take longer, in what is expected to be his final earnings call before handing over to John Ternus in September.
Mainland Chinese consumers will first receive a targeted suite of Apple Intelligence capabilities, including the Clean Up photo-editing tool that lets users erase unwanted objects from photos, Cook told analysts on Thursday. “We are working now through the roll-out of those, and there will be more work required down the road for Siri AI, but we are at the front end of that,” he said.
The deployment follows Apple Intelligence’s long-awaited regulatory clearance in China earlier this month, with Apple partnering with domestic firms including Alibaba and Baidu to power the features on iPhones – two years after Apple Intelligence first launched elsewhere. The rollout is critical for Apple as it leans on AI to fend off fierce domestic competition in the world’s largest smartphone market.
The expansion arrived alongside strong but uneven financial results. Apple’s global revenue rose 16 percent year on year to $109.4 billion for the quarter ended June 27, driven by a 22 percent surge in iPhone sales, while Greater China revenue climbed 22 percent to $18.8 billion – still short of the $19.6 billion Wall Street had expected.
Cook also warned of worsening semiconductor “supply constraints” in the September quarter that will affect iPhone, Mac and iPad manufacturing, prompting guidance for year-on-year sales growth of just 9 to 11 percent. “With less flexibility in the supply chain, we expect the impact from the supply constraints to increase significantly, sequentially,” he said, describing a global memory crunch as a “hundred-year flood” and noting Apple would lean on stockpiled inventory.
On AI monetization, Apple signaled that heavy compute costs will initially be covered by tying daily AI usage limits to users’ iCloud+ subscription tiers, according to AppleInsider. “We couldn’t be happier with how things are going,” Cook said of iOS 27 AI beta testing, adding that “it’s obviously early going for us, and so I don’t want to say that we have a complete plan for that.” Apple already raised prices on Macs, iPads, Vision Pro and home devices last month, with some models costing 20 percent more amid rising memory and storage costs.
The memory crunch is squeezing the entire industry, but Counterpoint Research director Tarun Pathak said Apple is expected to outperform across its key hardware categories “driven by the strength of its installed base and initial positive reception of Siri AI.” With the Siri AI rollout in China still in its early stages and the transition to Ternus approaching, Apple’s AI push in the country remains one of the biggest tests of its next chapter.
Sources: South China Morning Post, AppleInsider, CNBC