Apple’s first steps into the world of artificial intelligence haven’t been as smooth as hoped. With rivals like OpenAI, Google, and Meta rapidly ramping up their AI hardware projects, there’s a growing buzz about how Apple will learn from its initial missteps. Even Eddy Cue, Apple’s services chief, mentioned that the iPhone might look very different in the next decade, hinting at a future reshaped by AI.
A year ago, Apple launched Apple Intelligence in the wake of ChatGPT’s success and the surge in generative AI innovations. Despite a loyal base of over a billion iPhones and the impressive power of its silicon chips, Apple’s new AI features haven’t quite caught up with competitors who are unveiling fresh generative models. Many are now watching Tim Cook’s upcoming WWDC talk with keen interest, hoping for a clear update on Apple’s AI roadmap.
The initial rollout faced its own set of challenges. Tools like the text rewriter and new Siri animations delivered a more reserved response than expected. Then, in March, the delay of the “More personal Siri” feature—which was set to integrate the assistant more seamlessly with iPhone apps—led to pulled promotional efforts and even some legal pushback from customers who felt short-changed.
Inside the company, the AI teams have been restructured to better tackle future projects, though details remain sparse. As JPMorgan Chase’s Samik Chatterjee pointed out, it’s still an open question whether what’s planned for WWDC will bridge the gap between Apple’s current capabilities and the pace set by other tech giants.
Meanwhile, competitors are not slowing down. OpenAI’s strategic acquisition of a startup, Meta’s impressive sales of Ray-Ban Meta Glasses, and Google integrating its Gemini models as the default assistant on Android devices are all testaments to the industry’s accelerating momentum.
For Apple, a refined AI strategy could drive new iPhone sales, especially for models following the iPhone 15 Pro that exclusively support its upgraded AI suite. Yet for now, AI remains a secondary factor in the grand scheme of smartphone purchases, as noted by Forrester’s Thomas Husson.
Historically, Apple has leaned towards machine learning—an approach that optimises for battery-powered devices—rather than climbing the full AI ladder. But the rise of ChatGPT has shifted Silicon Valley’s focus, pushing Apple to invest more heavily in its AI ambitions.
Even though Apple isn’t directly challenging the frontier models from companies like Google and Anthropic, it’s not shy about spending. With $9.5 billion poured into capital expenditures in fiscal 2024, Apple’s investments look modest compared to the combined $300 billion from Meta, Amazon, Alphabet, and Microsoft this year.
To catch up, Apple might lean on strategic acquisitions—a tactic that has served it well before. With ample cash reserves, it’s in a strong position to snap up innovative companies, though some, like OpenAI, might remain out of reach due to their sky-high valuations. Rumours about a move on Anthropic, valued at $61.5 billion, or even a collaboration with firms like Perplexity are already circulating among industry observers.
Moreover, Apple’s proprietary M-series chips continue to be a vital asset. Their unified memory and efficient GPU capabilities not only power today’s devices but also play a crucial role in training large AI models, giving Apple a unique edge.
It’s clear that AI has the potential to upend traditional computing. Cue’s remarks, made during a recent trial, hint at a future where AI-driven interfaces might replace the familiar devices we know now. Still, Apple’s enduring customer loyalty provides it with some breathing room to navigate this technological shift.
