Although Apple has avoided using the abbreviation &#34;AI&#34; when talking about its products for many years, times have changed, and there is no longer any possibility of avoiding it. However, Apple, which has become a follower in the field of AI, is facing fierce competition from major tech companies.
<h2>Constantly Facing Strong Competition, How Will Apple Respond?</h2>
Since the generative artificial intelligence boom initiated by OpenAI at the end of 2022, AI has been the biggest topic in the tech industry, driving chipmaker NVIDIA's market value to $3 trillion and triggering significant strategic shifts at companies like Microsoft, Google, and Amazon, all of which are racing to integrate AI into their core services.
Leading the way in generative AI models, OpenAI has seen a significant increase in revenue since unveiling its new generation model with conversational capabilities, ChatGPT-4o, and the company has stated that the next-generation model is currently in development.
As direct competitors in the electronic device sector with Apple, Google and Microsoft have made significant moves in the AI PC space.
Microsoft previously announced that Windows 11 AI PCs will be gradually launched in partnership with Microsoft, Dell, Lenovo, and other partners starting on June 18, outperforming the Apple MacBook Air with M3 by 58% in speed and offering over 40 TOPS/second in computing power. The new Recall feature helps users find content they have viewed on their PCs and provides real-time subtitles in over 40 languages, including Chinese.
Google announced the addition of new artificial intelligence features to its high-end Android laptop Chromebook Plus product line, engaging in direct competition with Microsoft and Apple in the AI PC market. Google even has its own Gemini model, which initially lagged behind ChatGPT but has been narrowing the gap with ChatGPT-4o through continuous iterations.
With Apple's Worldwide Developers Conference (WWDC) scheduled to take place next week in 2024, investors and customers are now eager to see what AI features the iPhone maker will introduce to address the intense challenges in the AI field.
Apple CEO Tim Cook has hinted at &#34;significant plans,&#34; and everyone is watching to see what achievements Apple will make in AI. Currently, there are over 1 billion iPhones in use, and Wall Street is eager to hear about which AI features will make the iPhone more competitive against its Android rivals, as well as how the company will demonstrate its investments in developing proprietary chips.
Investors are more interested in companies that demonstrate a clear AI strategy and vision. NVIDIA's stock price has tripled in the past year, and Microsoft has actively integrated OpenAI into its products, leading to a 28% increase in its stock price over the past year. In contrast, Apple has only risen by 9%, and its market value has been surpassed by the aforementioned two companies.
Analysts state that this is the most important event for Cook and Apple in over a decade. &#34;The AI strategy is a missing piece in Apple's growth puzzle, and this event needs to be remarkable, not indifferent.&#34;
Apple's software chief Craig Federighi is expected to discuss the practical application of Apple's AI. Analysts predict that Apple will reveal its long-term vision for implementing generative AI across its diverse ecosystem of personal devices. &#34;The impact of generative AI on Apple's business is the most profound in the entire tech industry, and Apple has a clear opportunity to bring generative AI capabilities to billions of consumer devices.&#34;
<h2>Collaboration or Competition with OpenAI?</h2>
Last month, OpenAI launched its AI software ChatGPT-4o in voice mode. When ChatGPT-4o was first released, some pointed out that this should be the target for Siri updates.
Some analysts suggest that Apple may collaborate with OpenAI to upgrade Siri next week. There are also reports that Apple is discussing obtaining chatbot technology from other companies (including Google and Cohere). However, Apple has currently declined to comment on its collaboration with OpenAI.
However, some analysts believe that one possibility is that Apple's new Siri will not directly compete with fully functional chatbots, but will improve its existing features and pass questions that can only be answered by chatbots to partners. This is similar to how Spotlight search and Siri currently work. Apple's system will attempt to answer questions, and if it cannot, it will turn to Google. This agreement brings Apple $18 billion in revenue annually.
Furthermore, Apple may also avoid fully embracing collaboration with OpenAI or chatbots. One reason is that chatbot malfunctions could generate embarrassing headlines and potentially undermine the company's emphasis on user privacy and data control. Because OpenAI's technology is based on web scraping, and ChatGPT user interactions are used to improve the model, this technology may violate Apple's privacy principles.
Moreover, large language models like OpenAI still have issues with inaccuracies or &#34;hallucinations,&#34; as well as unresolved copyright issues, all of which Apple executives hope to avoid.
Additionally, industry veterans suggest that even if Apple collaborates with OpenAI, it may only be a temporary measure. Apple has long been bringing external technology in-house and focusing on developing its own capabilities, such as replacing Intel's chips with its own.
The source also revealed that Apple's AI strategy is much broader than just chatbots. It plans to use large language models to power robot devices that are being secretly developed, including a desktop robotic arm with a large display screen similar to an iPad, and a mobile robot that can follow users and handle household chores on their behalf. In addition, Apple also aims to equip AirPods with cameras and artificial intelligence features.
However, the potential collaboration between Apple and OpenAI has also raised concerns among Microsoft executives.
Analysts believe that Microsoft hopes to use OpenAI's technology to penetrate the consumer market, not just the enterprise market, and a deal between OpenAI and Apple could jeopardize these opportunities, as Apple's AI capabilities will directly compete with Microsoft
However, from a positive perspective, Microsoft may earn more money from its collaboration with Apple and OpenAI, as Microsoft will gain more cloud computing revenue.
<h2>Efficiency vs Scale</h2>
In terms of the emphasis on AI model routes, Apple may also differentiate itself from competitors.
Cook has previously emphasized that Apple's proprietary chips have advantages in running AI models. &#34;We believe in the transformative power and vision of AI, and believe that we have some advantages that can set us apart in this new era, including Apple's unique seamless hardware, software, and service integration, groundbreaking Apple Silicon, our industry-leading neural engine, and our strong focus on privacy.&#34;
Some analysts predict that Apple's presentation at WWDC will focus on the capabilities on devices and functionality, as well as generative AI models running on devices.
In April of this year, Apple released research on its AI model called &#34;Efficient Language Model,&#34; which can run on phones. Microsoft is also researching a similar concept. Apple's &#34;OpenELM&#34; model has 1.1 billion parameters or weights, much smaller than OpenAI's 2020 GPT-3 model with 175 billion parameters, and even smaller than one version of Meta's Llama with 70 billion parameters.
In the paper, Apple researchers benchmarked the models running on the Apple M2 Max chip in a MacBook Pro laptop, showing that these efficient models do not necessarily need to be connected to the cloud. This can improve response times and provide a layer of privacy protection, as sensitive issues can be answered on the device itself without having to return to Apple servers.
Media reports suggest that some features built into Apple's software may include providing users with summaries of missed messages, generating images of new emojis, completing code in the company's development software Xcode, or drafting email replies. Apple may also decide to load the M2 Ultra chip in its data centers to handle AI queries that require more computational power

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Analysts say that this conference is the most important event for Tim Cook and Apple in over a decade

OpenAI, Google, and Microsoft have successively made big moves in AI, putting pressure on Apple. The market is focusing on next week's WWDC