Apple's IPhone 16 Faces Huawei's Increasingly Fierce AI And Competition Challenges

Apple's iPhone 16 failed to attract investors' interest due to unsatisfactory AI features (photo: x @keisukerinshan)

JAKARTA - Apple's iPhone 16 has failed to attract investors because the AI feature, which has been expected for a long time, is still in testing mode, while Huawei's first trifold phones have emerged and increased competition in an effort to dominate the global smartphone market.

Apple shares fell 1.7% on Tuesday, September 10, a day after the US tech giant launched a new iPhone that has hardware level integration for artificial intelligence-based applications but with limited changes to external designs.

The phone will use the AI feature called Apple Intelligence to improve their voice assistant, Siri, and improve the camera. These features will be available on iPhones in the US in beta next month, potentially making people reluctant to upgrade to the iPhone 16.

"With a lot of words like 'this year' and 'early next year', Apple's core message for the iPhone 16 is: Next year it will be better," said Needham analyst Laura Martin, in a note.

Apple did not say when they would proceed beyond the testing phase, nor did it announce partners in China to help with its AI ambitions. The absence of AI features in the new iPhone has drawn criticism in China, where the government requires genrative AI-based chatbots to be tested first before being released to the public.

China's version of the Hashtag iPhone 16 does not yet support AI' attracting 11.33 million views and more than 1,500 comments on Weibo.

What's the point of buying it if you can't use AI? write one Weibo user. Another user commented, Without AI as the biggest sales point, it should cost half.

Apple is not raising prices for the new iPhone, which Wall Street analysts say is a good strategy because consumers are not willing to spend a lot of money on expensive goods. Huawei, which introduced its Mate XT smartphone a few hours after Apple's event, has set the price of the tri-fold device at 2,800 US dollars (Rp43.2 million).

"Limited production and high prices mean new phones (Huawei) are unlikely to have a major impact on shipping," said Will Wong, senior research fellow at IDC consultants. "But this shows consumers that they are still the technology leaders and the potential challenges they bring to Apple may go far beyond just a market share."

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Mate XT has received more than 4 million pre-orders, without the need for deposits, according to the company's website. The phone is equipped with an AI assistant that has text, translation, and editing summary functions, as well as AI-backed image editing functions such as cutting unwanted photo parts.

The successful series of Huawei smartphone launches in recent months underscores the company's ability to tackle US sanctions and strengthen its position against Apple in China. On the other hand, Apple's sales in the country have slowed after suffering strong growth over the years, and its ranking in the world's second-largest economy is now down from the third to the sixth.

iPhone shipments in China fell 6.7% in the second quarter of 2024, according to data from Canalys. Huawei made a comeback to the high-end smartphone segment last year by releasing a domestically-backed device, challenging US sanctions that have cut its access to the global chipset supply chain. The launch of the Mate 60 Pro shocked US analysts and officials.

Both the Mate XT and the iPhone 16 will be available on September 20, but competition between the two tech giants is expected to increase, with Huawei pushing for restrictions in design and AI.