This month, Apple showcased several AI applications, such as a custom emoji generator available to iPhone users in the United States, but did not mention the Chinese market.

Since foreign AI models like OpenAI's ChatGPT cannot be used in China, Apple needs to collaborate with local companies to offer its AI services. However, no agreements have been reached yet, and the release of the next generation iPhone is only a few months away.

Data shows that in the first quarter of this year, Apple's market share in China's mobile phone market fell to third place, behind local brands.

Apple has been in talks with several Chinese companies, including Baidu (NASDAQ: BIDU), Alibaba (NYSE: BABA), and startup Baichuan AI.

In the United States, Apple is adopting a dual approach by both developing its own AI capabilities and partnering with OpenAI. These AI products are expected to help Apple’s market value surpass three trillion dollars again.

In China, companies must obtain approval before introducing AI chatbots based on large language models to ensure they do not affect government-controlled public opinion.

As of March this year, the Cyberspace Administration of China has approved 117 locally developed generative AI products. Earlier this year, Apple explored the possibility of gaining approval to use foreign large language models on its devices but found it unlikely, prompting Apple to intensify negotiations with potential local partners.

Apple stated that for the quarter ending March 30, revenue from mainland China, Taiwan, Hong Kong, and Macau accounted for 18% of its global revenue.

This year, Huawei's market share in the Chinese smartphone market is expected to rise from 13% last year to 17%, while Apple's market share is expected to drop from 18% to 16%.

Even so, Apple CFO Luca Maestri stated that China is the most competitive market in the world, and Apple remains confident in its position in China.