Citi: Apple's China integration with Qwen could expand Alibaba's user base and cloud inference demand

How will Qwen come to Apple devices?

Alibaba and Apple announced that Qwen will be integrated into Apple Intelligence in mainland China. Developer testing on iOS is scheduled to begin on 4 November 2026, with a public release planned for December.
Devices in the Chinese market use a hybrid architecture: Apple handles on-device processing, while Alibaba provides the cloud-based Qwen model. The model is natively integrated into iOS, so users do not need to download a separate third-party app.
Siri can call on Qwen to answer complex questions and analyze user-selected photos and documents; writing tools can generate text and images, while Visual Intelligence can use the camera to identify objects and places.

According to Statcounter, iOS held 32.09% of China's mobile operating system market in September 2026. Citi believes system-level integration gives Qwen access to a large number of premium smartphone users, helping to increase user penetration and brand awareness.
User requests to Alibaba's cloud model could also increase demand for Alibaba Cloud inference. Citi further believes Apple's choice demonstrates Qwen's capabilities in performance, privacy and reliability and could accelerate adoption of Alibaba's model-as-a-service (MaaS) offerings.

The initial features in December will be available on supported iPhones, including iPhone 15 Pro and Pro Max, iPhone 16 and later models, iPhone Air and iPhone Duo. Device and Siri languages must be set to English or Simplified Chinese.
The initial release focuses on basic AI tools and excludes the advanced Siri capabilities and next-generation features Apple previously showcased at its developer conference. Platforms including iPadOS, macOS and visionOS are expected to gain support gradually after the relevant domestic regulatory approvals are obtained.
User consent is required before queries, documents or images are sent to the Qwen cloud. Alibaba says requests and responses generated through the integration will not be used to train models.

Citi reiterated its buy rating on Alibaba and its price target of 193 dollars per share. Its sum-of-the-parts valuation applies a price-to-earnings multiple of 10 to the e-commerce group's forecast net profit for fiscal 2027 and a price-to-sales multiple of 7 to AI cloud and computing services revenue.
Downside risks cited by Citi include higher-than-expected investment spending and margin pressure, as well as slower growth in user traffic and online gross merchandise value.