Apple is struggling to make Apple Intelligence comply with China's demands

Posted:
in iPhone

The deal between Apple and local firm Baidu to bring a form of Apple Intelligence to China is reportedly faltering because of technical and philosophical privacy issues.

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Apple Intelligence faces delays in China



Apple Intelligence could provide the boost to iPhone sales in China that Apple needs, after years of decline and increasing local competition. But while Apple theoretically could go it alone with Apple Intelligence in the country, in practice it has to partner with a Chinese firm -- and it's facing difficulties.

While it has now partnered with Baidu, after local media first denied it had, The Information says that the partnership is struggling. The difficulty includes how Baidu's large language models (LLMs) have been failing to provide the kind of responses Apple wants for typical iPhone user questions.

An example given is how Baidu AI would respond to a request for a restaurant recommendation by using the data it has been trained on. Apple wants Apple Intelligence to personalize the answer by taking into account what else the user is doing, and where they are.

Perhaps as a consequence, Baidu is said to want to improve its training -- and so retain user data to achieve that. But Apple specifically will not allow that.

These failures are happening despite how Baidu is using its most advanced LLM, called Ernie 4.0. Also, where Apple is not paying OpenAI for its ChatGPT integration, it is paying Baidu.

This makes Apple now one of Baidu's largest customers, though the two firms have worked together for over a decade. In China, iPhone users use Baidu instead of Google for searches, for instance, so it makes sense for Apple to use them to circumvent any problems with China's regulators.

Just as with the US and the rest of the world, Apple wants to have Apple Intelligence working on-device as much as possible. Consequently the two companies are working on a smaller version of Ernie that would run on iPhones, and a larger one that will run in the cloud.

Apple Intelligence is already delayed to 2025 in China but the impact of these issues will affect more than its launch date. It's likely to have an impact on overall iPhone sales in the country too.

For while analysts such as JP Morgan say there are signs that iPhone sales are recovering in China, not all evidence agrees. Most recently, Apple saw iPhone sales drop by a double-digit percentage during China's Singles Day shopping event, beaten because of increasing competition from local rivals such as Huawei.

Rumor Score: Likely

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Comments

  • Reply 1 of 6
    That Apple thought privacy was feasible in China is delusional.
    gatorguybeowulfschmidtwatto_cobra
  • Reply 2 of 6
    cpsrocpsro Posts: 3,243member
    Just philosophical differences
    watto_cobra
  • Reply 3 of 6
    Farago said:
    That Apple thought privacy was feasible in China is delusional.
    Let's face it. China forces you to host services in China for Chinese customers. That will enable Chinese officials to access any data, that is on these servers. Pretty much the same with US hosted services that need to hand over private data to officials - not neccessary requiring a warrant (thanks to the CLOUD act).

    Then again - what gets transferred to those servers is a different ball park, that's where the difference is. .... and obviously thanks to our "friends" in Israel even an iPhone can be hacked nowadays. 
    danox
  • Reply 4 of 6
    danoxdanox Posts: 3,471member
    Farago said:
    That Apple thought privacy was feasible in China is delusional.
    Those that use social media anywhere in the world have no privacy. Are you one of those people?

    All the government’s across the world want a back door just for them and those that are in countries where they can fight back (without being thrown in jail) most don’t do so because they don’t care at least not enough to actually do anything about it.
    edited December 2024 watto_cobra
  • Reply 5 of 6
    charlesncharlesn Posts: 1,232member
    "Most recently, Apple saw iPhone sales drop by a double-digit percentage during China's Singles Day shopping event..."

    It would be great if AppleInsider stopped reporting unsubstantiated data like this as if it were established fact. It is not. Apple doesn't report its sales, period, full stop, except for the information it releases when reporting quarterly earnings. And the companies that claim to know Apple's sales, despite no input from Apple, all claim proprietary (and therefore unrevealed and unsubstantiated) methods and sources for their data, which is usually laced with meaningless language like, "unnamed supply chain sources say..." I'm not saying that the above speculation about Apple sales on Singles Day couldn't be correct, but it should be labeled as speculation. 
    kiwimacheadwatto_cobra
  • Reply 6 of 6
    charlesn said:
    "Most recently, Apple saw iPhone sales drop by a double-digit percentage during China's Singles Day shopping event..."

    It would be great if AppleInsider stopped reporting unsubstantiated data like this as if it were established fact. It is not. Apple doesn't report its sales, period, full stop, except for the information it releases when reporting quarterly earnings. And the companies that claim to know Apple's sales, despite no input from Apple, all claim proprietary (and therefore unrevealed and unsubstantiated) methods and sources for their data, which is usually laced with meaningless language like, "unnamed supply chain sources say..." I'm not saying that the above speculation about Apple sales on Singles Day couldn't be correct, but it should be labeled as speculation. 
    Chinese carriers can gather network data to produce quarterly, or sometimes monthly reports on phone models used within their networks, which they then submit to the CAICT for publication. Based on the data I've seen from CAICT or other sources, iPhone have not shown any YoY growth in volume there in the last 12 months. I believe that when Apple releases its Q1 2025 Financial Statement in the coming months, it will show that net sales in Greater China is continuing its dropping compared to the last FY, just like Q4 2024 statement when it dropped 10% in 12 months or 0.1% in 3 months comparison. Within every region, the iPhone net sales have always been the main part. It's reasonable to speculate that iPhone sales are not growing in China. Apple is facing fierce competition there.
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