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Chinese smartphones tout AI ahead of Apple Intelligence launch

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Chinese smartphone company Honor on Wednesday revealed new AI features. Pictured here is CEO George Zhao speaking in Shanghai on June 26, 2024.

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Honor, a spinoff from Huawei that focuses on higher-end devices, revealed Wednesday the latest version of its Android-based Magic operating system would focus on AI as an assistant.

A company demo showed how even with a vague voice command — such as “I’m tired, order something” — the phone was able to automatically order coffee without requiring the user to touch the device. It used AI to mimic actions on a touchscreen. Human intervention was only needed to complete the payment.

The AI assistant could also identify documents and send them to contacts, or make calls via social media app WeChat, all without requiring the user to touch the phone.

For devices in China, Honor works with Baidu and other Chinese companies for some AI functions, while developing others on its own. Honor works with Google for devices sold overseas.

The new AI features are slated for release on Honor’s forthcoming Magic 7 smartphone, due for launch on Oct. 30. Honor plans to roll out AI capabilities to all its devices by the first few months of next year.

The Magic 7 will use Qualcomm‘s newly announced Snapdragon Elite 8 chip for phones. Honor on Monday had teased its new AI features at the chipmaker’s annual event.

Chinese home appliance and smartphone company Xiaomi will also launch a new phone this month that uses Qualcomm’s Snapdragon Elite 8 chip. Xiaomi has been less vocal about its AI features for smartphones.

The AI features have climbed to a new level, Toby Zhu, senior analyst, Canalys, said in a phone interview Wednesday after Honor’s event. He said the new features have greater potential to convince consumers to switch to another device.

“Apple faces challenges in China but from our data it won’t face a significant decline,” he said in Mandarin, translated by CNBC.

Apple’s falling China sales

Honor, Xiaomi and Huawei have all launched foldables, a category Apple has yet to enter.

About 17% of Apple’s revenue came from Greater China in the quarter ended June 29. That’s down from 19% in the year-ago period. Apple is scheduled to release quarterly results on Oct. 31 local time.

Apple CEO Tim Cook met with China’s Minister of Industry and Information Technology Jin Zhuanglong on Wednesday to discuss data security and cloud services, according to the ministry. Apple did not immediately respond to a CNBC request for comment.

Since launching on Sept. 20, Apple’s iPhone 16 Pro Max has dropped slightly in value on second-hand shopping platform Xianyu. The device was selling between 8,000 Chinese yuan ($1,122) and 10,000 yuan Wednesday, compared with 10,500 yuan to 16,300 yuan last month.

Huawei had launched its trifold Mate XT on the same day. As of Wednesday, second-hand prices for the device had dropped to the mid-20,000 yuan range, nearly half the price it was selling for on Sept. 20.

— CNBC’s Dylan Butts and Sonia Heng contributed to this report.

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Stocks making the biggest moves midday: AAL, AVGO, JPM

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Biggest banks planning to sue the Federal Reserve over annual stress tests

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A general view of the Federal Reserve Building in Washington, United States.

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The biggest banks are planning to sue the Federal Reserve over the annual bank stress tests, according to a person familiar with the matter. A lawsuit is expected this week and could come as soon as Tuesday morning, the person said.

The Fed’s stress test is an annual ritual that forces banks to maintain adequate cushions for bad loans and dictates the size of share repurchases and dividends.

After the market close on Monday, the Federal Reserve announced in a statement that it is looking to make changes to the bank stress tests and will be seeking public comment on what it calls “significant changes to improve the transparency of its bank stress tests and to reduce the volatility of resulting capital buffer requirements.”

The Fed said it made the determination to change the tests because of “the evolving legal landscape,” pointing to changes in administrative laws in recent years. It didn’t outline any specific changes to the framework of the annual stress tests.

While the big banks will likely view the changes as a win, it may be too little too late.

Also, the changes may not go far enough to satisfy the banks’ concerns about onerous capital requirements. “These proposed changes are not designed to materially affect overall capital requirements, according to the Fed.

The CEO of BPI (Bank Policy Institute), Greg Baer, which represents big banks like JPMorgan, Citigroup and Goldman Sachs, welcomed the Fed announcement, saying in a statement “The Board’s announcement today is a first step towards transparency and accountability.”

However, Baer also hinted at further action: “We are reviewing it closely and considering additional options to ensure timely reforms that are both good law and good policy.”

Groups like the BPI and the American Bankers Association have raised concerns about the stress test process in the past, claiming that it is opaque, and has resulted in higher capital rules that hurt bank lending and economic growth.

In July, the groups accused the Fed of being in violation of the Administrative Procedure Act, because it didn’t seek public comment on its stress scenarios and kept supervisory models secret.

CNBC’s Hugh Son contributed to this report.

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These are the stocks posting the largest moves in midday trading.

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