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Apple Inc. (AAPL, Financial) shares fell 3% in Thursday's trading following the company's loss of China's smartphone market leadership to domestic rivals, according to Canalys. Apple's slower take up of artificial intelligence (AI) features in its devices relative to rivals like Huawei, which have used AI breakthroughs as a selling point with the Chinese consumer, is one of the reasons for the drop, according to some analysts.
But so far, growing competition from locally savvy tech brands has pushed back on Apple's market share in its crucial marketplace. In particular, Huawei has benefitted from the emphasis on its 5G technology and rich AI features, even before U.S. sanctions.
At face value, the group of products that make up Apple's latest iPhone offerings come under sharp criticism for not offering the type of bleeding-edge AI capabilities that are a priority for Chinese consumers, when it comes to opting for a new smartphone. Apple is well established as a global brand, yet remains challenged at home in a crowded regulatory and competitive environment.
The pointed shift of this market draws attention to the advanced integration of AI to remain competitive in key regions including China. While Apple remains the global market leader, it needs to address this technology gap to return to the market where it is one of its largest.
This article first appeared on GuruFocus.