Apple has begun introducing new artificial intelligence (AI) features in mainland China, but CEO Tim Cook indicated that a full rollout of an enhanced Siri AI will take additional time. Speaking during a quarterly earnings call on Thursday, Cook said Chinese consumers would initially receive selected Apple Intelligence capabilities, such as the Clean Up photo-editing tool that allows users to remove unwanted objects from images.
"We are working now through the roll-out of those, and there will be more work required down the road for Siri AI, but we are at the front end of that," Cook said. This deployment follows regulatory approval for Apple Intelligence announced earlier this month, marking a significant step as the company partners with local firms including Alibaba Group Holding and Baidu to develop these features for iPhones—a move coming two years after the technology’s introduction in other markets.
The expansion into China is a strategic effort for Apple amid intense local competition in the world's largest smartphone market. However, despite a 22 percent increase in revenue from mainland China, Hong Kong, Taiwan, and Macao, totaling $18.8 billion for the quarter ending June 27, the figure fell short of analysts' expectations of $19.6 billion. Globally, Apple reported a 16 percent year-on-year revenue increase to $109.4 billion, buoyed by a 22 percent rise in iPhone sales.
Looking ahead, Apple cautioned that worsening semiconductor supply constraints would disrupt production of iPhones, Macs, and iPads in the September quarter. Cook attributed this shortage to stronger-than-anticipated demand, forecasting year-over-year sales growth between 9 and 11 percent, lower than previous guidance.
“With less flexibility in the supply chain, we expect the impact from the supply constraints to increase significantly, sequentially,” Cook said. He also noted that memory chip costs are expected to rise further, describing the situation as a “hundred-year flood” in the semiconductor market. To mitigate the challenges, Apple has been stockpiling inventory but anticipates ongoing difficulties.
This earnings call was Cook’s final one as CEO before his planned transition to John Termus in September. He described the upcoming quarter as one where the company will be “scrambling on the supply side, essentially,” highlighting the growing pressure Apple faces amid global supply chain disruptions.