TMTPost -- Apple Inc. Showcases its optimism on new iPhone model as sales of its flagship device in China are recovering.

Credit：Apple

Apple aims to ship at least 90 million iPhone 16 models this year, and has told its suppliers and partners that it is aiming for a 10% increase in shipments of latest models from iPhone predecessors, when it shipped approximately 81 million iPhone 15 series in the second half of the year, Bloomberg cited people familiar with the matter.  Apple became more confident that the Apple Intelligence features with the iPhone 16 will help bolster demand for the new models that are set to release this fall, according to the people.

Apple is lagging behind Chinese smartphone makers in artificial intelligence (AI) development, as brands like Xiaomi and Huawei have already shipped AI features. It is unclear that how Apple will push forward with its AI features in China, the world’s largest smartphone market.

The Wall Street Journal reported last month that Apple is looking for local partners to offer AI services since OpenAI’s ChatGPT and other Western AI models aren’t available in China. Apple has been reportedly holding talks with Baidu, Alibaba group, and Beijing startup Baichuan AI, but there hasn't been news of an agreement. A big question going forward will be how Apple complies with China’s AI policies, said Nicole Peng, a senior vice president at Canalys. Stringent Chinese restrictions may hamper the company’s initial attempts to build AI into its products, she said.

The news about Apple’s upbeat target of iPhone 16 came as the company reversed trend of slump in shipments in China earlier this year. iPhone shipments in China rose nearly 40% year-over-year (YoY) in May, suggested by data from China’s Academy of Information and Communications Technology (CAICT), a scientific research institution which is subordinate to the Ministry of Industry and Information Technology.  Shipments of foreign-branded smartphones increased to 5.028 million units from 3.603 million a year ago,  according to CAICT monthly estimates for May. The shipment volume represented a 44.3% month--over-month (MoM) increase.

The latest CAICT data showed iPhone sales maintained double-digit growth in China. The shipments surged 52% and 12% YoY in April and March, respectively,  after Apple has recorded decrease in iPhone sales for a second straight month in China. iPhone shipments in China dived nearly 39% and about 33% YoY in January and February, respectively, and the first two months of this year saw a 37% plunge, CAICT data showed.

CAICT data increased signs that iPhone sales in China has been recovering these months as Apple took rare promotions in the world’s largest smartphone market. Apple’s website lowered prices of  iPhone 15 series in January in China ahead of the Chinese New Year holiday in February. The adjustment of RMB500 pushed the starting price of iPhone 15 below RMB5,000. Resellers of Apple at Tmall and JD.com was reported late February to cut the price of iPhone 15 by as much as RMB1,300 (US$180).

Apple rolled out in May much more substantial promotion. Its official store at Alibaba Group’s Tmall platform launched a limited-time discounting campaign from May 20 to 28. Any iPhone 15 shopper who placed their orders from May 20 to 28 can enjoy discounts up to RMB2,050 (US$318). Specifically, iPhone 15 Pro Max starts RMB7,949, representing a reduction of RMB2,050, or 20.5% from the previous price. The starting price of iPhone 15 Pro is cut to RMB4,500 after the discount of RMB1,900, and those prices of iPhone 15, iPhone 15 Plus respectively down to RMB5,599 and RMB6,099, each down by RMB1,400.