Apple does sell a cloud service: iCloud. It has hundreds of millions of users. iCloud has famously been hacked (mostly via social engineering), exposing multiple celebrities' personal data.

I am not sure about what you are talking about Apple working on maybe providing end-to-end encryption at some indeterminate future date. iMessage has featured this functionality for years, but iCloud backup is still not encrypted, as far as I know, which pretty much defeats the benefit, unless the user explicitly disables backups.

End-to-end encryption is not an especially remarkable feature in the abstract: it has existed for decades across many platforms and communication formats outside of the Apple gated community, including plain old email with PGP/GPG in the early 90s.

The "M family" CPUs are not some kind of magical technology that has never been done before. It is trivial to handle "data-intensive tasks" on your local device. Even phones from before the smartphone era were able to provide encryption functionality to users, and were able to implement plenty of other useful client-side functionality without calling out to the cloud. And modern phones from all manufacturers are almost as powerful as even the workstations of a decade ago. I am not sure how the new Apple CPU is going to make any significant difference to privacy issues.

The modern era of ad-based software is not a function of the hardware. It is very much a simple business decision of big tech companies to earn their money from selling user data.

Of course, all of this is irrelevant in the context of China, because neither Facebook nor Google is available for end-consumers in China. Only Microsoft and Apple are. And Microsoft no longer makes phones. So the real issue here is Apple, who have been open about the fact that they allow the Chinese government to backdoor the personal data of users inside China.

Do you have any evidence that Chinese users inside China using an Apple device will have all of their personal data protected from the Chinese government? Is there a statement from Apple asserting that the data of non-Chinese Apple users who travel to China will be equally protected? Is there a guarantee that the Chinese government cannot gain access? Personally, I am not aware of such a thing.