What kind of sparks will fly this time when Apple teams up with Alibaba?

Recently, foreign media revealed that Apple and Alibaba had reached a cooperation to jointly develop AI features for Chinese iPhone users, and the project has entered the stage of filing with the regulatory authorities.

This seemingly ordinary business cooperation is actually a crucial step for Apple's "AI localization" in the Chinese market.

Apple's Anxiety: The "AI Dilemma" in the Chinese Market

In the past two years, Apple has not had an easy time in the Chinese market. In the fourth quarter of 2024, iPhone shipments plummeted by 25% year-on-year, and revenue in the Greater China region declined for the sixth consecutive quarter, with a drop of 11%.

Tim Cook bluntly stated at the earnings report conference: "The absence of Apple Intelligence is an important reason for the weak sales."

At the same time, seven major domestic mobile phone brands, including Huawei, Honor, and OPPO, have collectively integrated with the emerging domestic large language model DeepSeek-R1.

Samsung, on the other hand, has joined hands with the Chinese unicorn company Zhipu AI to inject AI features such as real-time voice and visual understanding into the Galaxy S25.

Facing the "encirclement" of domestic brands, Apple urgently needs an AI revolution.

Why Alibaba? Instead of Baidu or DeepSeek?

It is said that at first, Apple initiated cooperation with Baidu, and Baidu's technology was once their top choice.

However, Apple clearly wasn't just fixated on one option.

Recently, they have also evaluated the AI models of ByteDance, Alibaba, and even DeepSeek.

There is a detail worth noting here.

DeepSeek is actually a relatively young AI company. Although its technical capabilities cannot be underestimated, it doesn't have as profound an industrial background and technical support as Alibaba.

Apple clearly wanted a partner that could support its vast user base. The lack of human resources and experience on DeepSeek's part became a decisive factor.

So, in the end, Apple made the choice to give up on DeepSeek and turn to Alibaba.

Then, why did Apple choose Alibaba? Firstly, Alibaba's accumulation in the field of AI cannot be underestimated.

Especially in natural language processing, machine learning, and other aspects, Alibaba has always been at the forefront of Chinese technology companies.

In fact, Ant Group's listing plan was suspended. Also, the large language model "Tongyi Qianwen" developed by Alibaba Cloud and DAMO Academy faced a shortage of funds.

Without these setbacks, the large language model at the forefront of AI today might not have been ChatGPT and DeepSeek, but Tongyi Qianwen.

Choosing Alibaba essentially means choosing an "end-to-end AI solution provider".

In terms of data, Alibaba's accumulated consumer profiles of over one billion users enable it to train a more localized model that understands Chinese users better.

This advantage in data assets is difficult for competitors like Baidu and ByteDance to replicate.

In terms of model capabilities, the Qwen series covers a full-size matrix ranging from 1.8B to 110B.

Among them, the 72B version surpasses GPT-4 in key indicators such as long text processing and multilingual understanding.

The distilled 1-3B small models on the edge can still maintain smooth interaction even under the memory limitations of the iPhone.

A more hidden competitive edge lies in ecological synergy: Alibaba Cloud not only provides the computing power foundation, but its business support and customer service system seamlessly connect with Apple's global standards.

Moreover, although Tencent and ByteDance have cloud service capabilities, their own models are relatively weak. And Baidu's Wenxin Yiyan has solid technology, it lacks the layout of edge-side models.

This trinity of "model + cloud + ecosystem" has made Alibaba Apple's only full-stack partner in China.

It seems that Apple has many choices, but in fact, this is its only option.

What Will Be the Impact?

The latest news is that the AI features jointly developed by the two parties have been submitted for filing, and they are expected to be launched as early as April with the iOS 18.4 update.

This cooperation is expected to bring a richer AI experience to Chinese iPhone users.

Precisely because of the news of the cooperation between Apple and Alibaba, as soon as it came out, Alibaba's stock price soared directly.

Such cooperation means huge opportunities for both Apple and Alibaba.

Apple can thus gain an additional competitive edge in the Chinese market, while Alibaba can further prove its leading position in the AI field.

As for DeepSeek, although it missed the opportunity to cooperate with Apple, it is also a valuable experience accumulation for it. In the future, if it continues to delve deeply into AI technology, there is still a chance for it to achieve greater breakthroughs.

After Apple teams up with Alibaba's Tongyi Qianwen, the situation may change.

The data assets accumulated in the e-commerce business are inclined towards user behavior analysis, which is exactly the most scarce capability for the edge-side AI of mobile phone manufacturers.

Then, for Chinese market enterprises, it will also be a time to take sides. Should they integrate with the young DeepSeek? Or rely on Alibaba's Tongyi Qianwen?

In any case, this cooperation presents Alibaba with a significant opportunity to further expand its influence in the AI market and strengthen its position in the global technology landscape.

As for Apple, whether this cooperation can retain its customers in the Chinese region remains to be seen, and it will be interesting to observe how this partnership unfolds and impacts the competitive dynamics in the industry.$AAPL $BABA