Key Points:
- Apple integrates “Apple Intelligence” across apps and introduces ChatGPT. Siri gains new capabilities, including writing emails and interacting with apps.
- Apple emphasizes privacy in its AI features, differentiating it from competitors. Wall Street responded lukewarm, with Apple shares down nearly 2%.
- Analysts note improvements but see no advantage over competitors. The latest OS updates include enhanced Siri, home screen customization, and app locking.
- Vision Pro headset expands to more countries with new features. The detailed paper outlines data protection measures, including Private Cloud computing.
Apple (AAPL.O) revealed its highly anticipated AI strategy at its annual developer conference on Monday, showcasing the new “Apple Intelligence” technology. This AI integration will enhance a range of Apple apps, including Siri, and bring OpenAI’s ChatGPT to Apple devices.
CEO Tim Cook and other executives highlighted how the upgraded Siri will interact seamlessly with messages, emails, calendars, and third-party apps during the nearly two-hour presentation. Siri will now be capable of writing emails and adjusting the tone to suit different contexts.
Staying true to its commitment to user safety, Apple emphasized that privacy remains central to its new features. This approach distinguishes Apple from competitors like Microsoft (MSFT.O) and Google, which have taken a more enterprise-focused route. However, Wall Street’s reaction to the event was tepid, with Apple shares closing down nearly 2% as investors sought more groundbreaking AI innovations.
Despite the lackluster response, Apple’s stock had seen a 13% increase in the month leading up to the event. Forrester analyst Dipanjan Chatterjee noted that while “Apple Intelligence” will please users with incremental improvements, it does not place Apple significantly ahead of its competitors. Apple’s strategy aims to appeal to its vast user base, which is not tech enthusiasts. Apple executive Craig Federighi described Apple Intelligence as “AI for the rest of us.”
Apple remains heavily reliant on iPhone sales, and analysts are skeptical about the short-term financial impact of the new AI features. Paolo Pescatore, analyst and founder of PP Foresight, suggested that Alphabet and Microsoft are better positioned in the early AI race, partly due to their cloud computing assets.
The AI enhancements will be included in the latest operating system updates for Apple devices. The revamped Siri will have greater control, enabling it to understand user intentions and app functionalities better. Siri will also incorporate ChatGPT, seeking user permission before querying the service and emphasizing Apple’s privacy commitment. However, this partnership has raised privacy concerns, with Tesla (TSLA.O) CEO Elon Musk threatening to ban Apple devices at his companies if ChatGPT is integrated at the OS level.
Apple announced that ChatGPT integration would be available with additional AI features later this year. Users will have free access to the chatbot, and Apple assures them that user data will not be logged. A detailed paper released by Apple outlined how these features will protect customer data, including using Apple’s servers for complex tasks under a new Private Cloud computing offering.
The AI capabilities will rely on a mix of on-device processing and cloud computing, initially available on the latest iPhones, starting with the iPhone 15 Pro. Apple’s new iOS 18 will introduce more customization options for the home screen and a “lock an app” feature for protecting sensitive information.
Additionally, Apple is expanding the availability of its mixed-reality headset, Vision Pro, to eight more countries, including China and Japan. The updated VisionOS 2 software for the headset will utilize machine learning to create natural depth photos and incorporate new gesture controls.
