On Monday, Apple unveiled its long-anticipated AI strategy, incorporating its new “Apple Intelligence” technology into various apps, including Siri, and integrating OpenAI’s chatbot ChatGPT into its devices.
During a nearly two-hour presentation at Apple’s annual developer conference, CEO Tim Cook and other executives showcased Siri’s enhanced capabilities. These include interacting with messages, emails, calendars, and third-party apps, as well as writing emails and adjusting the tone to fit different occasions.
Emphasizing its commitment to user safety, Apple indicated it aims to distinguish itself from competitors Microsoft and Google by making privacy a central feature of its offerings. However, Wall Street’s response was tepid, as investors hoped for more impressive AI features and assurances that would better position Apple against AI leader Microsoft.
Consequently, Apple’s shares fell nearly 2% following the event. Despite a 13% rally in Apple’s stock last month leading up to the conference, it continues to lag behind other major tech firms this year.
“There isn’t anything here that propels the brand ahead of its as-expected trajectory of incrementalism,” said Dipanjan Chatterjee, an analyst at Forrester.
“Apple Intelligence will indeed delight its users in small but meaningful ways, it brings Apple level with, but not head and shoulders above, where its peers are at.”
Apple’s strategy diverges from the enterprise-focused approach of its rivals, aiming to persuade its over 1 billion users—most of whom are not tech enthusiasts—of the importance of emerging AI technology. Craig Federighi, an Apple executive, described Apple Intelligence as “AI for the rest of us.”
Despite these advancements, Apple remains heavily dependent on iPhone sales, and some analysts believe the new AI features are unlikely to provide a short-term boost. Analyst Paolo Pescatore, founder of PP Foresight, noted that in the early stages of the AI race, Alphabet and Microsoft, particularly due to their cloud assets, appear to be in a stronger position.
The AI features revealed at Apple’s Worldwide Developers Conference will be included in the latest operating system for its devices, which were also showcased at the event. Held annually at Apple’s headquarters in Cupertino, California, the conference serves as a platform for Apple to present updates to its apps and operating systems and introduce new tools for developers to integrate into their apps.
SIRI REVAMP
Apple is overhauling Siri to give it more control and enhance its ability to understand users’ exact intentions and how various apps work. This revamp includes integrating ChatGPT’s expertise, though Siri will seek user permission before querying the OpenAI service, a privacy measure Apple emphasized.
The collaboration with OpenAI has raised immediate privacy concerns. Tesla CEO Elon Musk stated on X (formerly Twitter) that he would ban Apple devices at his companies if Apple integrates OpenAI’s technology at the operating system level.
Despite this, Apple announced that ChatGPT integration will be available later this year, followed by other AI features. The company assured users that the chatbot would be free to access and that users’ information would not be logged.
Later on Monday, Apple published a paper explaining how its features, including those powered by OpenAI, would ensure customer data safety. This includes handling more complex tasks via Apple’s servers under a new offering called Private Cloud Compute. Apple also announced plans to incorporate technology from other AI companies and is reportedly discussing a potential collaboration with long-time search partner Google.
To support these AI features, Apple will use a combination of on-device processing and cloud computing. As a result, these features will only be available on the latest iPhones, starting with the iPhone 15 Pro and future models.
Apple, which has traditionally opposed cloud processing of consumer data due to privacy concerns, stated that this approach would enhance privacy protections by utilizing in-house chips in data centers with built-in security features. Analysts have noted that using its own chips could help Apple avoid the high costs associated with Nvidia’s chips.
The new iOS 18, powering Apple’s flagship devices, will offer a more customizable home screen and a “lock an app” feature, allowing users to protect sensitive information by locking specific apps and maintaining tighter data control within the OS.
In addition to the Siri revamp, Apple announced the expansion of its mixed-reality headset, Vision Pro, to eight more countries, including China and Japan. The new VisionOS 2 software for the headset will leverage machine learning to create natural depth photos and introduce new gestures.
