After a hiatus of several years, the Apple Store has once again witnessed long queues forming.

Last month, the iPhone 17 series officially hit the shelves, with Apple Stores in Shanghai, Beijing, Nanjing, and other cities bustling with people queuing up from the early hours. Many consumers who managed to secure the first batch of stock online rushed to the stores to collect their new phones and experience them firsthand. Notably, several 'scalpers' were spotted carrying multiple Apple shopping bags, leaving with their arms full.

The online market was equally abuzz. According to pre-sale figures from e-commerce platforms, sales of the iPhone 17 Pro series soared threefold compared to the previous generation, while the standard iPhone 17 witnessed an astonishing eightfold increase.

Judging by the current consumer enthusiasm in China, barring any unforeseen circumstances, Apple is poised to reverse last year's sales slump and achieve a long-awaited surge. However, this spells significant pressure for domestic smartphone brands.

Last year, brands like Huawei and Xiaomi made notable strides in the high-end market, boosting confidence in domestic brands' push into this segment. Especially with the integration of AI concepts into smart hardware, major smartphone manufacturers have been rolling out flagship models that unanimously feature AI as a core selling point. Moreover, Apple's perceived lag in AI capabilities has further raised hopes among these competitors.

Yet now, Apple's adoption of a 'more for less' strategy—a tactic already overused by domestic manufacturers—has triggered an unprecedented market response, while the diverse range of AI phones has failed to make a significant impact.

Can Apple dominate without relying on AI?

Before the iPhone 17 series made its debut, Apple faced widespread skepticism and criticism, primarily due to its perceived lag in AI technology. As AI advancements have taken the tech world by storm in recent years, many predicted that AI-driven hardware would revolutionize the consumer electronics market. Apple's conservatism and hesitancy in the AI realm were seen as likely to leave it behind. As foreign media put it, 'the company is increasingly reminiscent of its old rival Microsoft'.

However, at this year's Apple autumn event, AI was barely mentioned, yet the iPhone 17 successfully ignited the market and stirred consumers' desire to upgrade, relying solely on substantial design improvements.

The long queues outside Apple's retail stores evoke memories of the iPhone 6 buying craze.

The key to the turnaround lies in the product. For this generation of the iPhone 17 series, Apple made solid upgrades to the base model iPhone 17 for the first time, turning it into the biggest surprise. Firstly, the entire iPhone 17 lineup comes standard with ProMotion adaptive refresh rate technology supporting up to 120Hz, and the minimum storage capacity has been increased to 256GB. Secondly, it features the latest A19 chip and the same screen as the Pro model, equipped with a 48-megapixel main camera and a 12-megapixel 2x telephoto dual-camera setup, while the front camera has been upgraded to 18 megapixels.

Without a price increase, the base model iPhone 17 exudes exceptional sincerity. Similarly, the iPhone 17 Pro/Pro Max have also been enhanced, primarily in terms of imaging capabilities. The new 48-megapixel telephoto sensor has seen a 56% increase in size, marking Apple's most significant upgrade to its telephoto lens in recent years. Notably, the iPhone 17 Pro incorporates VC (Vapor Chamber) cooling technology, finally addressing heat dissipation issues.

By addressing shortcomings and delivering comprehensive upgrades, Apple's product strategy this year has taken a sharp turn. Instead of remaining aloof and self-absorbed, it has begun to cater to user needs and market demands. Although this shift is unrelated to innovation, facts have proven that Apple's compromise is a clever move. By addressing shortcomings, it has easily allowed consumers to perceive significant product changes and brought a sense of surprise.

Apple's decision to set aside the pursuit of AI and focus on upgrades has instead garnered a strong market response. In contrast, last year's highly anticipated and fiercely competed AI phones, though seemingly dazzling, have failed to generate a consumer frenzy or even successfully convey their value to users. Most consumers have merely purchased flagship models from various brands that have been endowed with AI capabilities, rather than buying AI phones per se.

Fundamentally, AI phones launched by domestic smartphone manufacturers have yet to address a core issue: Why should consumers pay a premium for AI?

At the application level, the most widespread use of AI phones remains voice assistants, which are limited in variety and lack blockbuster offerings. Moreover, AI hardware is not the only channel for consumers to access AI functions, as regular smartphones and PCs can also utilize AI through software and apps. At the pricing level, increased costs have driven up the prices of AI phones. Most AI phones are positioned in the high-end market, and many brands have used AI as a gimmick to justify price hikes.

With inflated prices and a lack of practical appeal, it is unsurprising that consumers are not buying into the hype.

Growth in the high-end market is not driven by AI phones

Amidst sluggish or even declining growth in the overall smartphone market, the high-end segment has demonstrated stronger potential. According to the latest data released by market research firm CounterPoint Research, global sales of high-end smartphones (priced over $600, approximately RMB 4,277) increased by 8% year-on-year in the first half of 2025, reaching a record high and far outpacing the 4% growth in the overall smartphone market.

The data also reveals that devices with generative AI (GenAI) capabilities accounted for over 80% of high-end smartphone sales in the first half of 2025.

However, this does not imply that AI phones are driving growth in the high-end market.

Since there is currently no universally accepted definition of an AI phone, in a broad sense, any phone marketed with AI features and endowed with AI capabilities can be considered an AI phone, particularly high-end flagship models from manufacturers. Over the past year, flagship phones from brands like Huawei and Xiaomi have indeed shown significant growth in the high-end market, but it is not AI that has prompted consumers to make purchases.

To put it bluntly, smartphone manufacturers have not successfully made AI a compelling factor for consumers to upgrade their devices. Instead, it has sparked widespread skepticism among users. On social media platforms, comments such as 'smartphones are just being renamed as AI terminals' and 'most functions are achieved through software, and AI models are primarily cloud-based, so there's no need to switch devices' are not uncommon.

Furthermore, the usage of AI functions reveals that most users are unimpressed or even disappointed with AI phones or the AI capabilities they promote. For instance, AI image processing and real-time translation seem to be merely enhanced versions of Meitu XiuXiu (a popular photo editing app) and translation software, while document summarization and cross-app operation speeds and quality fall far short of what users can achieve manually. Even the most core voice interaction currently appears to be more of a technological gimmick than practical value. After initial curiosity, users rarely continue to utilize these AI functions.

It is not just domestic manufacturers' AI phones that are facing embarrassment. Samsung and Apple have invested considerable effort in AI upgrades, yet the market feedback has been equally unimpressive. Last year, a survey conducted by US recycling company SellCell revealed consumers' true attitudes towards AI functions in smartphones. A staggering 73% of users who actually used Apple Intelligence felt that the experience improvement was not significant. Among Samsung smartphone users, an even higher 87% expressed dissatisfaction with AI functions.

Currently, it is evident that AI contributes little to the actual sales growth of smartphone manufacturers. Over-reliance on AI as a selling point, while sometimes briefly stimulating a slight increase in sales, struggles to drive sustained growth. Especially in the high-end market, most consumers are unwilling to pay a premium for AI or to pay extra for AI functions.

The high-end 'battle' ultimately comes down to Apple versus the rest

Last year, the landscape of China's high-end smartphone market underwent significant changes.

Since the introduction of its 5G Kirin chip, Huawei has swiftly regained market competitiveness, increasing its high-end market share from 20% in 2023 to 29% in 2024. Other domestic manufacturers like Xiaomi, Vivo, and OPPO also saw their collective high-end market share rise from 5% in 2020 to 15% in 2024. Among them, Xiaomi's achievements in the high-end market are widely recognized.

Conversely, Apple experienced a continuous decline in its domestic market share. In the fourth quarter of last year, Apple's shipments dropped by 18.2%, with its domestic market share shrinking from 20.2% to 17.1%. In the second quarter of this year, its market share further declined to 13.9%.

The return of Huawei and the rise of more domestic high-end models have broken Apple's long-standing 'domination' of China's high-end smartphone market. This shift is closely tied to domestic smartphone manufacturers' proactive exploration of new smartphone forms. From foldable phones to AI phones, domestic manufacturers have been at the forefront of exploration and implementation, attempting to carve out new niches in the high-end market and achieve a comeback against Apple.

Especially with the advent of the 'first year of AI phones,' the innovation potential of smartphones has gained new imagination through breakthroughs in AI technology. If domestic brands can secure an early foothold and establish technological barriers, they may not be far from achieving a breakthrough.

However, the ideal is noble. Foldable phones, which initially seemed highly innovative by subverting the traditional smartphone form, have seen relatively low penetration rates after several years of development. Both globally and domestically, the growth rate of the foldable phone market is slowing down. Ultimately, foldable phones merely focus on screen form without delivering truly disruptive innovation, making consumers prone to aesthetic fatigue. While AI phones appear to offer disruptive innovation, these innovations currently remain confined to marketing.

Now, with Apple changing its strategy and reigniting consumer enthusiasm through performance enhancements, it demonstrates that competition in smartphones still revolves around core configurations such as screen, imaging, appearance, and chips. Other innovative changes, unless truly disruptive or significantly upgrading these configurations, may ultimately be mere 'icing on the cake'.

Moreover, the market response triggered by the iPhone 17 once again confirms the unmatched brand influence of Apple compared to other phone brands in the high-end market. Features like 120Hz refresh rate, 256GB minimum storage, and expanded battery capacity may not be surprising on flagship models from domestic manufacturers, but Apple's willingness to compromise and address shortcomings has prompted numerous consumers to pay for this surprise.

Against a backdrop of severe performance excess, competition in the high-end market has long been a battle of brand influence. Despite being criticized for lackluster innovation in recent years, Apple remains the top consideration for consumers when purchasing high-end phones. Huawei's success in competing with Apple in the high-end market hinges not solely on product strength but largely on the halo effect brought by technology, spirit, and national sentiment, which has enhanced its brand influence in the Chinese market.

Of course, this brand influence is the result of multiple factors, including technology, perception, and time. Without its core advantage in software and hardware ecosystems, Apple might not easily sway high-end market consumers, even with heightened configurations.

For domestic smartphone brands, unless a brand can create a truly widely recognized AI phone in the future and successfully define the concept of an AI phone, it will be challenging to reshape their brand and alter the competition in brand influence. In other words, in the global high-end market, Apple remains Apple, while brands like Huawei and Xiaomi remain in the 'other' category.

As Apple pivots, the pressure shifts to domestic smartphone brands, and the high-end market may enter a 'difficult mode'.

Daozong Youli, formerly known as Waidaodao, is a new media outlet covering the internet and tech circles. This is an original article, and any form of reproduction without retaining the author's relevant information is strictly prohibited.