Ethan LockshinSales at NVIDIA focused on AI adoption

The #1 Threat to Apple in China | Patrick McGee, NYT Bestselling Author

Name: The #1 Threat to Apple in China | Patrick McGee, NYT Bestselling Author
Uploaded: 2025-09-18T14:51:59+00:00
Duration: 2 min 30 s
Channel: Ethan Lockshin
Description: In this interview, the host asks Patrick McGee about the biggest risks and opportunities for Apple in China over the next five to ten years. McGee argues…

18 Sept 2025 · 3 min

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2:30

In this interview, the host asks Patrick McGee about the biggest risks and opportunities for Apple in China over the next five to ten years. McGee argues that artificial intelligence is the paramount threat: Apple lacks its own world‑class large language model (LLM) and cannot rely on ChatGPT in China, forcing it to depend on local providers like Alibaba or Baidu. While Apple has historically built China’s hardware expertise through massive investment and hands‑on training, McGee contends that AI now outweighs hardware in importance. He notes rising nationalism, tighter regulations, and fierce competition from domestic brands such as Huawei, Xiaomi, Oppo, and Vivo. These forces, combined with the AI gap, could erode Apple’s roughly 17% market share in China, potentially dropping to single‑digit levels within three to four years.

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Apple has had an incredible run in China, but the landscape is shifting. Competition from Huawei, new regulations, rising nationalism. What do you see as the biggest risks and opportunities for Apple in China over the next five to 10 years?
You know, my book is not about artificial intelligence, but in terms of just being overtaken by the likes of Huawei, Xiaomi, Oppo, Vivo, specifically in China, AI is the biggest risk. The biggest risk because Apple can't rely on ChatGPT the way that they do here. In other words, if I show you my iPhone here, I have an action button. The action button just brings up ChatGPT. I've effectively displaced Siri on my own phone. So the fact that Siri is, to quote Satya Nadella, dumb as a rock, doesn't matter to me because I just rely on a third party provider. The problem is a ChatGPT doesn't exist in China. So Apple is effectively being forced to work with someone like Alibaba or Baidu. Now they wouldn't have to do that if they sort of had skin in the game by having their own LLM that was world beating, but they don't. So what's not a problem in the US I think is a major problem in China. Because my story is about how Apple over the last 25 years has really built up China's competence in hardware excellence by training, teaching, auditing, supervising hand holding and indeed investing tens of billions of dollars into these factories, hundreds of factories across four major industrial clusters in China to get things up and running. AI is more important than hardware, perhaps. I mean, I read books on AI that compare it as a human invention to fire. Not many inventions get compared to fire. So are you telling me that the next 25 years is going to be that Apple's going to work hand in glove with AI researchers in China to sort of take, take the best graduates from Caltech, MIT, hire from SpaceX and ETA, do whatever they can and to work with all these researchers to make sure that they have world leading AI. That doesn't strike me as a good possibility. But if that is not going to happen, then they might just be behind in AI, in which case Chinese consumers who already have a sense of nationalism and a sense that Apple is no longer the indigenous product they've always thought it was because Apple's sort of being forced to invest more in America, invest more in India, et cetera. Well then I think it's just one more reason why Chinese consumers might very well pick a local competitor instead. So I believe the latest figures is that Apple has something like 17% market share in China. I would expect that to fall to single digits in the next three to four years.