• Apple is battling to keep the iPhone relevant in China.
• New figures indicate foreign-smartphone shipments to China almost halved in November.
• Apple faces stiff competition from local smartphone makers like Huawei.

Apple's battle to keep the iPhone popular in China appears to be getting tougher.

Signs of fresh struggles for Apple came on Friday as the government-backed China Academy of Information and Communications Technology said foreign-smartphone shipments dropped by 47.4% year over year in November.

The drop to 3.04 million shipments of non-Chinese smartphones, including iPhones, followed a 44.3% drop in October.

The figures, first reported by Reuters, highlight Apple's continuing challenges in its most important international market. Apple's annual net sales have declined for two consecutive years in the Greater China region, where the company has built a vast supply-chain empire.

Among the biggest threats to Apple's iPhone sales in the country — which fell by almost 8%, to $66.9 billion, in its latest fiscal year — is the rise of new powerful smartphones from domestic competitors.

The Chinese tech giant Huawei has provided Apple with one of its biggest recent challenges in the form of its Mate 60 series of smartphones, introduced in 2023, and its Mate 70 series, released in November.

The Mate 60 series stunned the smartphone industry because of its inclusion of advanced chips made in China.

US export controls aimed to curtail Chinese access to advanced chips, but Huawei's inclusion of domestic-made chips with similar capabilities to US technology highlighted how quickly local companies in China were working to innovate past constraints.

Apple has been pushed to respond to the rising competition in China by introducing discounts to entice consumers. The company has announced discounts worth about $70 on its iPhone 16 Pro models, for instance, ahead of the Lunar New Year.

It also faces pressure to accelerate the rollout of its suite of generative-AI features to iPhones in China, where Apple Intelligence isn't yet available.

Apple did not immediately reply to a request for comment from Business Insider.

• Tim Cook placed big bets on the Vision Pro and Apple Intelligence in 2024.
• iPhone sales are flattening, prompting Apple to search for new revenue drivers.
• However, early signs suggest Apple's bets on the two futuristic technologies are struggling.

When Tim Cook joined Apple in the late nineties, he would have had little idea he'd be leading two of its most momentous bets as CEO more than a quarter century later: the Vision Pro and Apple Intelligence.

Their stuttering starts, however, have thrown the success of the high-stakes moves into question — and given Cook an uphill battle to turn them around in 2025.

Vision Pro, a huge bet on a world of headset wearers enthralled by virtual and augmented reality, has received a tepid response. And Apple's take on the generative AI trend that has swept Silicon Valley since the introduction of ChatGPT has also lagged behind rival offerings.

"2024 was another year where Apple failed to break out a killer new product line," said Jamie MacEwan, senior media analyst at Enders Analysis, a research firm. Failure to turn these futuristic platforms into generation-defining products could have long-lasting implications.

Though Apple has turned the iPhone into a cash cow — iPhone net sales generated $201.2 billion in its last fiscal year — sales have started to flatten, leaving the Cupertino-based giant puzzling over its next big thing.

Apple remains a powerful force, of course. It has risen more than 35% year-to-date to a market capitalization of $3.81 trillion, trading bragging rights of being the world's most valuable company with Microsoft and Nvidia in the climb to its all-time high.

But much of its long-term future could hinge on its success in turning its new visionary technologies into offerings with the star power of the iPhone.

A blurred vision

When the Vision Pro first went on sale in February, Apple was ready to convince everyone that what they were seeing was the future. As Cook put it ahead of the launch, the Vision Pro marked "the most advanced consumer electronics device ever created."

That's been a tougher sell than he'd like. For one, owning Apple's futuristic headset — which combines virtual and augmented reality to create a "spatial computing" experience that blends the digital with the physical — comes with a hefty price tag of $3,500.

It's an eye-watering cost that offers one explanation for why Vision Pro reception has been so lackluster. Headsets from rival firms offer a much cheaper entry point for consumers looking to try out a still-nascent technology. Meta's Quest Pro, for instance, starts at $999.99.

Apple does not share specific sales numbers for the Vision Pro, but third-party estimates suggest they have been low. According to data firm Counterpoint, the 16% share of the mixed reality market it secured in the first quarter of 2024 dropped to 3% by the second quarter.

The other problem has been a lack of a killer app.

At launch, Apple said the Vision Pro would come with "more than 600 apps and games" built specifically for the headset. It bet consumers would use the device's "infinite canvas" to watch movies or productivity tools. New apps have been slow to come, however.

According to a report from The Wall Street Journal in October, developers have been slow to make apps for the headset, with just 10 apps added to the Vision Pro App Store in September, bringing it to a total at the time of around 1,770, per figures from data firm Appfigures.

"Vision Pro is too expensive for what it can do," MacEwan said. "It's not yet at a high enough image quality to enable real work such as on spreadsheets, and it simply doesn't have that density of apps and experiences yet."

In an interview with Wired published this month, Cook pushed back on the criticisms around the Vision Pro's slow start by arguing that it is "an early adopter product, for people who want tomorrow's technology today."

Playing catch-up on AI

Cook's other big bet this year, Apple Intelligence, has also had its fair share of issues.

Apple's generative AI push, first introduced at its WWDC event in June and then hyped up at its annual iPhone event in September, was supposed to mark Apple as a leader in a field that has been dominated by rivals like Google and Microsoft since ChatGPT's launch two years ago.

While Apple talked up several of its generative AI features — such as writing aids and a partnership with OpenAI to integrate ChatGPT into its iPhone, iPad, and Mac operating systems — a lack of standout features and a slow rollout has taken the air out of the launch.

The launch of the iPhone 16 in September came with no Apple Intelligence features, though software updates since then have slowly started to drop AI tools into devices. Much more is expected in 2025, but impressions around existing features aren't instilling confidence in them.

In November, high-profile tech reviewer Marques Brownlee posted a video to YouTube dissecting the features currently available from Apple Intelligence. His takeaway? Apple's big promise to shake-up products with AI "is starting to fade."

A summarizing feature, Brownlee said, doesn't work for some longer documents and is "almost useless" when used to summarize notifications from apps. The Image Playground tool, which creates cartoon-like images, is of "debatable usefulness," he said.

"If you disaggregate the features of Apple Intelligence, you won't find anything terribly unique or distinctive or something that hasn't already been around for some time," said Dipanjan Chatterjee, vice president and principal analyst at Forrester.

The company is also facing challenges in introducing top AI features to an important overseas market: China. Apple's OpenAI partnership will not be available to consumers in China, which has reportedly led Apple to explore partnerships with Chinese tech firms Tencent, ByteDance, and Baidu to bring ChatGPT-like features to iPhones there.

According to The Information, its tie-up with Baidu is running into problems with accuracy when responding to prompts. With Apple facing increasing competition from local companies like Huawei in the smartphone market, failure to roll out AI tools in China risks hurting sales in the country.

An uncertain road ahead

Apple, for its part, is exercising caution about the future of its new products.

In its latest annual report, the company warned that its "new products, services and technologies may replace or supersede existing offerings and may produce lower revenues and lower profit margins."

Others remain confident Apple can succeed in at least some of its new bets. In a research note last month, Dan Ives, a senior analyst at Wedbush, offered a vote of confidence in Apple Intelligence, suggesting its continued rollout "over the next few months kick-starts a new era for Cupertino."

Forrester's Chatterjee, meanwhile, sees "much of Apple Intelligence's success in the near term being measured by "what it can deliver in iPhone upgrades." He's not convinced that it'll trigger an "upgrade super cycle" anytime soon.

Whether the AI rollout or the Vision Pro can match the hype surrounding them is up in the air. Cook's mission for 2025 and beyond is to try and get them to land.

• Apple plans to expand in generative AI and reportedly launch more hardware products in 2025.
• Apple Intelligence software is still expected to drive a super cycle in iPhone sales.
• It faces competition in mixed reality and potential tariffs affecting Chinese sales and production.

Timing is everything for Apple going into 2025.

Apple's stage is set for the new year, with big plans for expansion in generative AI, reports of a home device lineup launching soon, and talks of a more affordable iPhone in the pipeline.

The "biggest story" for 2025 will be the impact of the new Apple Intelligence software on iPhone sales, Gene Munster, managing partner at Deepwater Asset Management, said. Apple was criticized for being late to the game when it came to introducing its own generative AI, but the hype around Apple Intelligence has some expecting a "super cycle."

And iPhone sales will have "more aggressive expectations" in 2025 after analysts adjusted their hype around iPhone 16 demand in the final months of 2024, William Kerwin, tech analyst at Morningstar, said.

"We expect Apple will ship more than 240 million iPhones in 2025, breaking its annual record," Wedbush Securities analysts wrote in their 2025 tech wish list.

To do that, though, Munster says Apple will have to figure out how to get Apple Intelligence onto all eligible iPhones. In Greater China, it will have to partner with a local tech company and adhere to the rules to bring AI to Chinese iPhones.

It's a move that Apple is discussing with Tencent and ByteDance, according to Reuters. Apple Intelligence will roll out to iPhone users in the European Union in April, Apple said on its website.

Meanwhile, its competition isn't slowing down. There's pressure to produce "more affordable mixed reality devices while maintaining its slim smartphone market share lead over Samsung," Jacob Bourne, tech analyst at Business Insider sister company EMARKETER, said.

Outside the iPhone, the $3,500 Apple Vision Pro launched to great fanfare but faced low demand in 2024. Meanwhile, Meta saw its (cheaper) AI-powered smart Ray-Ban glasses gain popularity.

Munster predicts that Apple will ditch the Vision Pro in favor of a form factor more like smart glasses.

Then there's the pressure in China — a key region for sales and production for Apple. Donald Trump will be sworn in as president in January, and he's been threatening a 60% tariff on Chinese goods.

The company reportedly relies on China for production of 95% of its iPhones, AirPods, Macs, and iPads. If Trump makes good on his tariff promise, Apple could face retaliatory levies affecting its sales in the country.

Apple's legal battles will continue into 2025. The federal judge presiding over its antitrust lawsuit from the US Department of Justice said he hopes to decide whether or not the case will go to trial by January, Bloomberg reported.

Apple didn't immediately respond to a request for comment by Business Insider.

The tech giant has had an eventful 2024, including its new iPhone launches and the introduction of AI. There are further reports of tech devices that could come out in 2025, including smart home products and a cheaper iPhone. Bloomberg reported that a new version of the iPhone SE could be released in 2025, bringing Apple Intelligence to a more affordable smartphone than the iPhone 16.

Bloomberg reported in November that there's a wall-mounted smart home tablet in Apple's production lineup that could use Apple Intelligence, operate home appliances, and access Apple apps. It could be announced as early as March, according to the report.

Expectations are high for Apple in 2025. It made smart moves by partnering with OpenAI and bringing its own AI on iPhones, but analysts say the true payoff of its bets in 2024 is still to come.

"Apple needs to carefully time — and price — new products and features to align with consumer demand rather than just technological capability," EMARKETER's Bourne said.

• Apple launched new products in 2024, including the Vision Pro and AI-powered iPhone 16.
• It faced challenges in China with iPhone sales and antitrust issues in the US and Europe.
• Apple also introduced Apple Intelligence at WWDC, marking its entry into the GenAI market.

It's been an eventful year for Apple.

The tech giant launched a brand new hardware product, made its official entrance into generative artificial intelligence, and added a new iPhone generation — all in the span of 12 months.

It's also faced questions about CEO succession, challenges in one of its largest markets, and criticism about being behind in the AI arms race compared to some of the industry's fiercest players. Meantime, it's been under antitrust scrutiny from both US and EU authorities.

"2024 has been a year of notable highs and lows for Apple as it expanded into mixed reality and AI while navigating shifting consumer preferences and market dynamics," Jacob Bourne, tech analyst at Business Insider's sister company EMARKETER, said.

Apple got off to a rocky start this year. Its stock got two analyst downgrades in early January, with bankers citing worries about poor iPhone sales in China. Still, it celebrated wins in the services department of its business and partnered with OpenAI to bring ChatGPT to new iPhones. It explored new territory with the Apple Vision Pro and upgraded company staples, including iPads and AirPods.

Here's a look back at Apple's 2024.

There was trouble in China

Apple started 2024 with struggles in its important Greater China region — a trend that continued. Analysts called sales of the iPhone 15 in China "lackluster" as competitors like Huawei and Xiaomi stepped up their competition in the local smartphone market.

It showed throughout Apple's earnings in 2024. Although the company beat revenue estimates in its fiscal fourth-quarter, sales in China missed and dropped year over year.

Still, Apple CEO Tim Cook said there are "positive signs" in the region during the fiscal Q4 earnings call on October 31. Cook took frequent trips to China this year — at least three times, as of November — amid fears that Donald Trump's potential tariffs will affect the country that makes a majority of Apple's iPhones, AirPods, Macs, and iPads.

"China's just been a disappointment in '24, full stop," Gene Munster, managing partner at Deepwater Asset Management, said.

Apple launched the Vision Pro in February

Apple launched its first headset, the Vision Pro, in February. The mixed reality device retails for $3,500, making it one of Apple's priciest products to date.

The headset was met with mixed reactions. Its uses are limited, and it was unclear if the tech was for gamers or professionals. Months after it released, Cook told The Wall Street Journal that the Vision Pro is for "people who want to have tomorrow's technology today."

"At $3,500, it's not a mass-market product," Cook said. "Right now, it's an early-adopter product."

Apple is reportedly slowing down its Vision Pro production and is instead eyeing a more affordable version of the headset.

It was hit with a DOJ lawsuit in March

The US Department of Justice accused Apple of maintaining an illegal monopoly on the smartphone market in an antitrust lawsuit. The DOJ alleged the iPhone maker was involved in "delaying, degrading, or outright blocking" rival technology. Apple denied the allegations.

The suit said the company "repeatedly responded" to competitive threats by "making it harder or more expensive for its users and developers to leave than by making it more attractive for them to stay."

Apple asked a federal judge to dismiss the lawsuit in August, saying the government's argument includes speculation. US District Court Judge Julien Xavier Neals will have to decide whether or not the case will go to trial.

Neals' decision could come as early as January, Bloomberg reported.

Meanwhile, in Europe, Apple was fined about $2 billion related to its App Store and was subject to other competition concerns in the region.

Apple rolled out new iPads

As OpenAI, Google, and others announced updates and demonstrated the power of their new AI assistants, Apple introduced new iPads in May.

The latest iPad Pro models are the first to have OLED display; Cook and Co. unveiled them at Apple's "Let Loose" event. Cook said it was "the biggest day for iPad since its introduction."

Although the launch came as Apple watchers waited for a bigger AI announcement, iPads performed well for Apple in Q3.

Apple Intelligence was finally introduced at WWDC

The world was introduced to Apple Intelligence at the annual Worldwide Developers Conference in June.

Apple's official debut into the AI wars, which have escalated since OpenAI launched ChatGPT in 2022, was the "biggest story" of the year, William Kerwin, a technology analyst at Morningstar, said.

The hype around Apple Intelligence was instant. Dan Ives, global head of technology research at Wedbush Securities, said it would usher in a "golden upgrade cycle" for iPhones. Apple said it'd be a big part of the iOS 18 software update too, though Apple Intelligence is only available on iPhone 15 Pro models or later.

The company made some lofty promises at WWDC, and plans to deliver on them after the initial rollout in October and through 2025, although not all the features touted have launched yet. So far, US iPhone users have gotten access to "Writing Tools," AI-generated emojis, and ChatGPT through Siri. The company had been criticized for its late entry to the AI scene.

"They caught up by partnering and by adding AI to something only Apple can do," Munster said.

Meanwhile, the company is reportedly exploring ways it can bring Apple Intelligence to Chinese iPhone owners. Apple will have to partner with a local company if it wants to deliver AI to its most important international market.

The first AI iPhone launched

Apple announced its first iPhone "built from the ground up to deliver Apple Intelligence" at its "Glowtime" event in September.

The company faced slowing iPhone sales in the quarters leading up to the launch; the new AI-enabled iPhone 16 was expected by some to be the boost it needed. It released without Apple Intelligence, though that was made available through a later iOS update. It did come with a new camera control button and some software updates.

The phones start at $999 for the iPhone 16 Pro and $1,199 for the Pro Max model. Although a golden upgrade cycle hasn't happened yet, analysts still have high expectations for the next year of iPhones.

"We believe iPhone 16 has kicked off a multi-year supercycle for Apple as the AI Revolution comes to the consumer," Ives said in an analyst note.

It scrapped some projects along the way

Among the new launches in 2024, Apple also axed some ideas that were said to be in the pipeline.

Bloomberg reported in December that Apple would no longer work on building a subscription service for iPhones. The team working to make iPhone ownership possible through monthly fees and annual upgrades was reassigned to other projects, according to the article.

The tech giant also shut down its buy now, pay later service, Apple Pay Later, in June, instead partnering with Klarna to bring its offering to Apple Pay, The Verge reported.

In April, Apple filed documents outlining that it planned to cut more than 600 employees working on projects related to screens and its electric car. Before that, the company reportedly told 2,000 employees that it would wind down its multi-year efforts to make an electric car.

Still, canceling the Apple Car to reassign talent to its Apple Intelligence efforts was part of a "one-two combo" that helped the company catch up in AI, Munster said.

• Apple Intelligence for iPhone 15 Pro and later was released in September.
• However, some AI features, like "LLM Siri," reportedly won't be available until 2026.
• The first update included a new Siri interface, enhanced Messages, and Mail app improvements.

Much of the chatter about the newest iPhone 16 models has been about how they can support Apple Intelligence.

There are also still a lot of questions about when, exactly, all the cool new AI features will be fully available.

Apple has touted the iPhone 16 as a phone "built from the ground up" for artificial intelligence. It hit the market in September, and Apple Intelligence began rolling out later that month as part of the iOS 18.1 software update.

The first AI drop included several new features available on the iPhone 15 Pro or later, but some of the tools highlighted at June's Worldwide Developer Conference won't come to iOS until 2025 or later.

Although the first AI rollout as part of the iOS 18.1 software update included some tweaks to virtual assistant Siri, Apple is still working to infuse improved large language models into the voice assistant by 2026, Bloomberg reported. The goal is to make Siri even more conversational to rival competitors in the AI arms race.

This "LLM Siri" would compete with AI offerings made by companies like OpenAI and Google. It is expected to be announced in 2025 and released as part of iOS 19 the year after.

Apple has yet to provide a clear-cut calendar for the full Apple Intelligence rollout, but it provided some more details on the timeline when it announced iOS 18.1.

Here's an estimated timeline for the US English Apple Intelligence release based on what experts on Apple and the company have said since WWDC.

October is the initial Apple Intelligence beta test.

When iOS 18.1 came out in September, it included the option for those with eligible iPhones to enable Apple Intelligence.

Here are some of the features that came in the first drop.

• Updates to the Messages app, including more extensive reply suggestions
• A new section of the Mail app that categorizes high-priority messages.
• The Reduce Interruptions Focus mode — similar to Do Not Disturb, but your phone will allow alerts from messages it deems urgent.
• Email and text summaries in notifications.
• Writing Tools, which will help with summarizing, proofreading, and editing bodies of text.
• A new Siri animation and interface that will make the perimeter of a device's screen glow, along with a "Type to Siri" feature.

There's more to come in December.

Apple said more colorful features are coming next month.

• Visual intelligence, which Apple said will "help users learn about objects and places instantly" using their camera.
• Writing tools will get an upgrade, allowing it to apply more specific changes to text.
• OpenAI's ChatGPT will also be integrated into eligible iPhones.

The new Siri and more languages are coming in 2025 and beyond.

Apple has been promoting a "more personal Siri" in its marketing, but Bloomberg correspondent Mark Gurman reported that it won't come out for a while.

In one clip from Apple, actor Bella Ramsey asks Siri to recall the name of a man they met months prior. The revamped Siri assistant instantly reminds Ramsey of the man's name, which is impressive, but the feature won't be available on iPhone 15s or iPhone 16s until 2025 or later.

It's unclear if this will come as part of the overhauled version of Siri expected in 2026 or in earlier updates.

According to the company, Apple Intelligence will first be available in American English and will "quickly expand" to other English-speaking countries, including Canada, New Zealand, South Africa, Australia, and the UK in December.

Apple said more languages are coming in April. So far, they include Indian English, Singaporean English, Chinese, Japanese, French, German, Italian, Korean, Portuguese, Spanish, Vietnamese, and more.

An earlier version of this story was published September 22.

• I visited an Apple store to get a rundown of all that Apple Intelligence is offering.
• Math Notes, available on iOS 18, solves complex equations using AI in the Calculator app.
• Safari's 'hide' tool removes distractions from webpages, enhancing online shopping experiences.

I've been covering Apple's AI rollout since it was first announced at the Worldwide Developers Conference in June, and I'm still learning about all it has to offer.

I visited an Apple store on Thursday morning for an Apple Intelligence tutorial. It was mostly a recap of the features I've tried already, but two tools were surprisingly useful.

The demo was quick, less than 15 minutes, and I was helped by two store employees who said they usually show shoppers features based on which apps they frequently use. For me, that meant a recap of the "clean up" tool in the Photos app, but I got new details on Math Notes and a "hide" feature on Safari.

Apple launched its AI software in beta with the iOS 18.1 update in October — the first of a rollout happening over the next several months. Although flashier features, like the Image Playground and Genmojis, aren't included yet, many new AI-powered tools exist on iPhone 15 Pro models or later.

When I played with Apple Intelligence on my own, I was impressed, but I couldn't fully explore it since my iPhone 14 Pro Max isn't compatible with the software. If you've recently upgraded to an iPhone 15 Pro or later, an AI walkthrough might be beneficial.

Here's what you might've missed if you haven't gotten a tutorial.

I thought Math Notes would come out later

I was impressed by Math Notes when Apple first demonstrated it at WWDC, but it was unclear which phase of Apple Intelligence it would be included in.

The AI-powered math helper was rolled out with iOS 18 in September, before the official Apple Intelligence launch. Unlike other AI tools, Math Notes is available on any iPhone compatible with iOS 18.

In the Calculator app, you can type complex math equations, and your phone will use AI to solve them. On iPads, you can use a pencil to write out the problems. I can't help but wonder where this was when I was in high school.

I could see myself using "hide" on Safari a lot

Although I've read about and reported on Apple Intelligence's uses in the Safari app, I didn't have the chance to see how they could be applied to my daily life.

One store employee demonstrated how the "hide" tool removes distracting elements from a webpage. He used the shopping site Temu as an example. When he clicked the hide button and selected which parts he didn't want to see — mostly ads — the page transformed to become an efficient showing of items to shop from.

This tool would definitely come in handy for an online shopper like myself who wants to get straight to the goods.

There's also the Tips app

If you can't make it to an Apple store for a rundown, there's always the Tips app with a section on Apple Intelligence. It provides some guidance on how to use the AI available on iOS 18.1 so far.

I went through it while first exploring Apple Intelligence, but the hands-on demo in a store gave me some more details.

Apple has said that there's more to come in December with the release of iOS 18.2, and there's more Apple Intelligence on the horizon in 2025.