Apple Shares Crippled by AI Flaws and China Trouble

By Douglas A. McIntyre Published Jan 17, 9:45AM EST

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Apple Inc. (NASDAQ: AAPL) has two significant problems.
Until each issue improves, the stock may be stuck in reverse.

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Apple Shares Crippled by AI Flaws and China Trouble — © Justin Sullivan / Getty Images News via Getty Images

Apple Inc. (NASDAQ: AAPL | AAPL Price Prediction) shares changed hands for $260 the day after Christmas. That has fallen to $228. Among the reasons for the decline is iPhone sales in China, which is the world’s largest smartphone market by far. Apple also pulled one of its artificial intelligence features off the market because of flaws in the results it produced.

Research firm Canalys reported that China smartphone shipments totaled 285 million in 2024, which is up 4% from 2023. The market was a little stronger in the fourth quarter. Shipments rose 5% to 77.4 million units.

The fourth quarter showed a huge weakening in Apple’s position in China. It ranked first in units sold at 13.1 million, but that was down 25% from the same quarter a year ago. Local smartphone manufacturer Vivo had sales of 12.9 million, up 14%. Huawei, another local company, also had sales of 12.9 million, or 24% higher. “Apple and its iPhone 16 series maintained the top spot in Q4 but faced growing competitive pressure from domestic flagship devices,” Canalys reported.

Apple recently took its AI news summary feature off the market. The BBC was the first to report the problem. “Apple has suspended a new artificial intelligence (AI) feature that drew criticism and complaints for making repeated mistakes in its summaries of news headlines.” Other media companies agreed there was a problem.

The double blow is hard because Apple needs strong China sales. Additionally, its Apple Intelligence software is its first foray into AI, which has become one of the most competitive sectors of the tech market.

Apple’s Greater China revenue was flat at $15 billion in its most recently reported quarter. Its overall revenue for the period rose 6% to $94.9 billion.

Apple Intelligence was part of the new iOS 18 release. It was available at about the same time as the new iPhone 16. AI has become a major battle among the largest tech companies. It has to work flawlessly to prevent public criticism.

Apple has two significant problems. Until each improves, the stock may be stuck in reverse.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.