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Apple is all-in on an AI experience that’s privacy-based

Apple held its Worldwide Developer Conference this past week. AI was a term that most consumers used to refer to artificial intelligence. Apple has a classic Apple style, and now we know that the Cupertino company wants to redefine AI into “Apple Intelligence”.

Apple has shown its ability to effectively communicate complex technology to laypeople. At WWDCThe company has clearly stated how it plans to incorporate the latest advances in artificial intelligence across its entire software platform.

Some consumers were sceptical of using artificial intelligence to do more than the hyped-up tasks like creating a party menu. These users aren’t a trivial group in terms of size, but these use cases won’t change the world.

Siri with Apple Intelligence can now search apps, email, and texts to find information that you have forgotten, or to check on the status a flight. Siri can, for instance, cross-reference the flight details in an email against real-time updates on the web. This is a great example of how artificial intelligence can be used.

More Steak and Less Sizzle

Google’s developer conference, held last month in San Francisco, debuted an image search function that was strikingly similar to the one Apple announced at its keynote. The show was a reminder that Apple has a significant advantage when it comes to showcasing the latest technology in its own products.

Apple Intelligence becomes tangible in a new way when viewed through this prism. Sundar Pichai’s Google I/O recent presentation was far more technical for the audience than it had been intended to be.

Apple’s iPhone 16 announcement, expected in September, will answer the question of how much of what they showed will lead to increased consumer spending. Users of legacy iPhones must upgrade to the iPhone 15 Pro Max or Pro to access AI. AI will be available for newer Macs and iPads using Apple Silicon.

Will AI boost iPhone sales?

Due to the fact that iPhone sales have decreased over the past fiscal year as well as the first half this year, any impact on these sales will be significant. However, there’s no guarantee that these enhancements will convince the typical consumer, who may not want to spend over $1,000 for the newest premium phone — either in full upfront or over three years, as most mobile plans currently permit — and may not pay attention to tech news.

It’s also unclear whether the features will work as well as they did during the WWDC demos. Apple is to be commended for the compelling demos shown during the WWDC keynote. They were intuitive and engaging, which are Apple trademarks. This remains a question, as consumers are notoriously picky.

Apple, I said in my podcasts, has all the resources it needs to rapidly replicate a Microsoft Copilot like framework across all of its operating systems. Sequoia will be the next upgrade for macOS. iOS 18 and iPadOS 18 follow.

Apple’s ability offer a variety of developer tools which utilize Apple Intelligence features will add an AI dimension to Apple’s App Store.

App Intents are an interesting addition to Shortcuts. They enable AI agent capabilities, so that developers can provide their customers with AI-based automation. This capability, along with Matter, will help to turbocharge the smart home applications that were previously a jumble of applications and cumbersome setups.

Privacy, privacy, and more privacy

Apple Intelligence is based on privacy, as expected. These additional features and functions appear to be available on devices (iPhone 15 or Apple Silicon iPads or Macs).

Apple unveiled “Private Cloud Compute” which allows Apple Intelligence’s “scaling” to servers using Apple Silicon. Apple has proudly boasted that Apple Intelligence becomes smarter when it understands the user’s habits and preferences. But, Apple also keeps this information confidential. The intelligence takes place on your device.

Apple will continue to use its unique cloud system, which protects privacy when extra processing power is used for super-complex tasks. Apple did not provide any details about this commitment.

It is not clear whether Apple Intelligence is based on gen AI services or models, even though some publications have claimed that OpenAI’s generative toolkit was the basis for the system. OpenAI was mentioned in the Apple Intelligence “world model”, but not as an “exclusive” “supplier”. This is to Elon Musk’s dismay.

Demos suggest that ChatGPT may be free, and likely with the same conditions for use. However, it will have a greater integration within Apple apps and operating systems. Apple seems to be treating this as a plug in version, similar to GPT-4o introducing a macOS app.

Apple’s renewed emphasis on privacy seems to confirm the fact that incremental costs of supporting these features in Apple Intelligence are more important than profit. Apple didn’t mention whether Apple Intelligence costs were covered by iCloud income or transferred to devices. If this is accurate, it could be a new issue for third-party AI companies outside of Apple.

Final Thoughts

Apple Intelligence is unable to maintain privacy and security, while maintaining contextual continuity between devices. This is directly related to Apple’s strategy of delivering a personalized AI experience and an external AI experience.

Apple must manage this in a way that differentiates it from Microsoft, Google and others.

Apple’s large smartphone market shares significantly enhance its ability to implement its Apple Intelligence capabilities. Apple’s large and loyal customer base allows it to gather extensive data in order to improve its AI algorithms and provide a more personalized and efficient experience for users.

iPhones’ widespread adoption provides a platform that allows for seamless integration of AI features across devices. This fosters a cohesive eco-system. Apple’s dominance in the market attracts top talent, and it encourages significant investment in AI research.

Artificial intelligence promised to be a magic wand. Instead, it’s often imperfect and only useful for a few tasks. It’s difficult to blame consumers for their skepticism. Recent research indicates that fewer than 10% of Americans are using ChatGPT every day.

OpenAI had announced earlier this year a new chatbot that was more conversational, but the chatbot lacked most of the features discussed by the company. Google also scaled back the AI image generator, and AI-powered results for search after some high-profile mistakes this year. Amazon unveiled an AI-upgraded Alexa with a high error rate last year. It has yet to be released. Apple wasn’t responsible for these mistakes and is generally wary about releasing products until they are polished.

Apple and other companies face enormous pressure to demonstrate their AI expertise to employees, investors, and business partners. Skeptics could question whether AI is truly targeted at consumers or corporate self interest.

I’m an optimist despite all of this, and I can’t wait to see how things turn out. I will be an initial beta tester for everything announced at WWDC24, and will assess its usefulness and intuitiveness as well as privacy protections. Stay tuned.