For years, Apple has been vilified as the biggest loser in the AI arms race. Skeptics say Apple’s lack of a clear AI strategy is hurting its advantage, and Wall Street analysts worry that gap could start to hurt iPhone sales.
Now, the company has announced what it is touting as its biggest AI launch to date. Siri AI builds new automation capabilities (powered by a partnership with Google Gemini) into the very bones of the software.
Will it be enough to stop people from saying Apple is “losing” the AI race?
To be honest, no one really knows. However, the question itself may be wrong. A better question might be: Are Apple’s customers actually going to use these features, and if they do, will it help Apple’s business?
Before we answer that question, it’s worth noting that Monday’s announcement also includes some interesting comments from Apple’s senior vice president of software engineering, Craig Federighi.
“Some people seem to be pursuing AI for AI’s sake without explicitly considering the people that AI should ultimately serve: all of us,” Federighi said in his speech. “Apple’s mission has always been to transform the potential of advanced technology into products that are convenient and intuitive for everyone.”
The not-so-veiled defiance on display here seems both a response to Apple’s “AI slow” criticism and an effort to acknowledge the deeply ambivalent, and according to some polls, increasingly negative sentiments many consumers have toward the AI industry. It’s a shrewd message at a time when Americans are worried that AI will take their jobs and rot their brains. Apple is positioning itself as an AI company that is actually on your side.
Judging by Monday’s demonstrations, there appears to be some substance to that position. Siri can now surface information buried deep in your inbox or text history, surface useful information, and provide helpful suggestions based on it. It uses what Apple calls on-screen awareness to give you context about what you’re seeing. Gemini also lets you get the latest information from the web almost instantly, delivered straight to your device.
Siri is also designed to work seamlessly across Apple devices, giving users more flexibility, and like other AI chatbots, it saves chat history so users can revisit past conversations.
By building AI capabilities into its intangible, ethereal assistant, Apple could also take advantage of competitors who can only offer apps to users through their own App Store. For these competitors, the inclusion of Apple’s AI at the operating system level poses a significant threat to their distribution advantage.
The key word here is “potential,” as this version of Siri won’t be available to consumers until later this year in beta.
We’ll have to wait for the final verdict, but what’s already clear is that Apple is doing its best to please its audience — whether they ultimately agree or not. Apple is clearly a hardware company, and these updates are designed to make the hardware progressively more user-friendly and useful, keeping users glued to their devices for a while.
The comparison with its competitors is instructive, and is perhaps the most important signal from Monday’s announcement for those paying attention to where the AI industry is actually heading. Take OpenAI as an example. Despite delivering updates at a relentless pace, OpenAI has struggled to define who it actually sells to, oscillating between consumers and businesses. Or Meta, which is pouring huge amounts of money into AI without a clear explanation of how it ties into the company’s core advertising business.
Apple’s more cautious approach is starting to look optimal by comparison, and it’s also more financially sound. For the most part, Apple didn’t need a gangbuster AI strategy. The company posted historic iPhone sales last quarter. And as questions grow about AI’s profitability and real-world usefulness, Apple is spending far less than its competitors, with about $14 billion in capital spending planned this year, compared to $900 billion for other tech giants, while still generating huge profits. That revenue comes from the AI industry itself through taxes on AI companies that use the App Store to platform their apps.
In short, Apple has reduced spending, increased profits, and launched a suite of AI features that for many iPhone users is indistinguishable from other AI applications already available through the App Store. Even if it doesn’t exactly “win the AI race,” it might be the smartest thing to do.
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