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Taipei, Taiwan — The U.S.-China technology war is playing out in the smartphone market in China, where global rivals Apple and Huawei released new phones this week. Industry experts say Apple, which lacks home-field advantage, faces many challenges in defending its market share in the country. The biggest highlight of the iPhone 16 is its artificial intelligence system, dubbed Apple Intelligence, while the Huawei Mate XT features innovative tri-fold screen technology.  But at a starting price of RMB 19,999, about $2,810, the Mate XT will cost about three times as much as the iPhone 16. According to data from VMall, Huawei's official shopping site, nearly 5.74 million people in China preordered the Mate XT as of late Thursday, 5½ days after Huawei began accepting preorders. But in a survey conducted on the Chinese microblogging site Weibo by Radio France International, half of the 9,200 respondents said they would not purchase a Mate XT because the price is prohibitive. An additional 3,500 said they are not in the market for a new phone now. "I suggest that Huawei release some products that ordinary people can afford," a Weibo user wrote under the name "Diamond Man Yang Dong Feng." The iPhone 16 is not available for preorder until Friday, but some e-commerce vendors in China have promised to deliver the new devices to consumers within half a day to two days of sale. In the competition between Apple and Huawei, iPhone 16 has some inherent disadvantages, said Shih-Fang Chiu, a senior industry analyst at the Taiwan Institute of Economic Research. "Apple's strength is information security and privacy, but this is difficult to achieve in the Chinese market, where the government can control the data in China's market to a relatively high degree. In the era of AI mobile phones, this will bring challenges to Apple's development in the Chinese market," Chiu said. Apple’s AI service on its iPhone 16 will roll out at a gradual pace in different languages, first in English and other languages later this year. The Chinese version will not be available until 2025. There are other challenges Apple faces as well, Chiu added, such as regulatory controls, consumer sentiment favoring local brands and weakening spending power amid China's economic slowdown. According to Counterpoint Research's statistics, Huawei held a market share of 15% in the second quarter of 2024, surpassing Apple's 14% market share. That compares with Apple’s 17.3% share in 2023 as reported by the industry research firm International Data Corporation China, or IDC China. Ryan Reith, the program vice president for IDC's Mobile Device Tracker suite, said in a written response to VOA that the iPhone 16 has not made significant hardware upgrades and that AI applications alone are not attractive because consumers have GPT and other AI solutions. AI applications are also another hurdle. Analyst Chih-Yen Tai said iPhone 16's AI services involve personal data collection, information application and cloud computing, which will require collaboration with Chinese service providers. That, along with the ban on Chinese civil servants and employees at state-owned enterprises from using their iPhone at work in recent years, will affect the sales of Apple products, said Tai, the deputy director of the Center for Science and Technology Policy Evaluation at Chung-Hua Institution for Economic Research in Taipei. "China's patriotism has led to a strong number of preorders” for Huawei's tri-fold phones, Tai said. “The competitors in China will sell the idea [to consumers] that iPhones will soon be edged out of the premium smartphone market. So, in the next stage, the affordable iPhone versions will be the key to whether it [Apple] can return to China or its previous glorious sales era," Tai said. Tzu-Ang Chen, a senior consultant in the digital technology industry in Taipei, said use of Huawei's HarmonyOS operating system surpassed that of Apple's iOS in China in the first quarter of this year, representing China's determination to "go its own way" and create "one world, two systems." "The U.S.-China technology war has extended to smartphones,” Chen said. “IPhone sales in China will get worse and worse, obviously because Huawei is doing better, and coupled with patriotism, Apple's position in the hearts of 1.4 billion people will never return." He said that as China seeks to develop pro-China markets among member countries of the Belt and Road Initiative in Southeast Asia, the Middle East and Africa, China-made mobile phones may become their first choice. VOA’s Adrianna Zhang contributed to this report.

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