How to make an AI iPhone? Apple has provided some answers. According to media reports, Apple will launch a new set of AI tool solutions at the 35th Global Developers Conference (WWDC 2024) next month, with a focus on tools that consumers can use in their daily lives. In the face of competition from peers, whether Apple can achieve remarkable success in AI is a key focus of market attention. In the opinion of experts, Apple is not expected to be too aggressive in AI, and its primary goal is to consolidate its own ecosystem.
Mature technology brings us to the next stage
On June 10th local time, Apple will hold the World Developers Conference (WWDC 2024), AI is expected to become the highlight of this conference. It is reported that Apple will release new iOS 18 and Mac OS 15 systems, which may include generative AI.
It is reported that Apple will apply Project Greymatter in iOS 18 and Mac OS 15, with new features including voice to memo conversion AI editing photos Spotlight search optimization Safari web search improvements, automatic suggested email/SMS replies, and intelligent generation. In addition, Siri's personal assistant will also be upgraded to provide a more natural interactive experience and utilize generative AI technology to create custom emojis.
It is reported that, Project Greymatter will be based on the "edge cloud collaboration" architecture and adopt a hybrid AI mode that combines cloud and edge terminals. It will support most device side computing through self-developed chips, as well as cloud computing through M2 Ultra chips in data centers.
In addition, Apple seems to be interested in betting on the field of AI chatbots. Wall Street News previously mentioned that there were media reports that Apple has reached an agreement with OpenAI to introduce ChatGPT technology in the new operating system iOS 18 to upgrade Siri's conversational experience.
Some viewpoints point out that although Apple started relatively late in the AI field, its large user base is a major advantage for the company. After the launch of the all-new iOS 18 this year, hundreds of millions of Apple devices worldwide will support AI functionality, which may make Apple the largest AI player overnight.
Undoubtedly, Apple is already a latecomer in AI, whether compared to its old rival Samsung or a group of domestic brands, it has been delayed in AI by almost a year or two. However, Apple also has some intention of "slow work leads to meticulous work", aiming to create exclusive AI from the chip level.
At the beginning of this month, Apple released the M4 chip, which added the function of accelerating AI tasks. This is also Apple's first AI chip. Unlike the previous latest chip, which was first installed on the MacBook, this chip was first installed on the new iPad Pro, and also made the top of the line price of the latest iPad Pro exceed 20000 yuan.
Senior industrial and economic observer Liang Zhenpeng analyzed to Beijing Business Daily reporters that Apple's business strategy has always been to wait for technology to mature before going out. Because Apple has a strong brand appeal, even if it arrives late, it does not worry about user loss. In terms of AI, from the previous cloud based large models to cloud edge collaboration, now "small models" have attracted attention again. However, the AI launched by Apple now is far from the AI form two years ago. To some extent, Apple has become more conservative and has delegated the task of technology exploration to external enterprises.
The OpenELM model released by Apple also confirms expert opinions, OpenELM is designed specifically for terminal hardware, rather than open source large models like ChatGPT, but has chosen to incorporate "small models" into the AI ecosystem.
Join the price war
Apple has arrived late in the AI era, although it has considerations for mature technology, it has also paid the price of declining sales. According to data released by TechInsights, in the first quarter of 2024, OPPO (including OnePlus) leads the domestic smartphone market with a market share of 17.1%, while Honor ranks second with a market share of 16.7%; Following closely behind are Huawei Vivo and Xiaomi ranked third, fourth, and fifth respectively with market shares of 16.6%, 16.1%, and 15%; And Apple fell out of the top five with a market share of 13.7%, gradually disappearing from the crowd.
This is still in January of this year, when Apple's official website in China launched a rare sales performance under the background of "limited time discounts for welcoming the Chinese New Year". Even so, Apple shipments are still declining.
In the global market, Apple has also encountered a Waterloo. According to Canalys data, despite facing challenges in its core market, Apple experienced a double-digit decline in global shipments in the first quarter, dropping to 48.7 million units, ranking second.
IPhone sales were poor, as evidenced by Apple's latest financial report released in May. In the first quarter of this year, IPhone revenue was $69.7 billion, higher than the expected $68.55 billion. However, the revenue in the Greater China region was $20.82 billion, a year-on-year decrease of 13%, far below the expected $23.5 billion, making it Apple's weakest performance in the region since the first quarter of 2020.
As the 6.18 shopping festival approaches, Apple still chooses to offer discounts and promotions. For example, the Tmall Apple flagship store launched a limited time discount from 8pm on May 20th to May 28th, The iPhone 15 series has started a price reduction promotion, with the largest discount being the 1TB version of the iPhone 15 Pro, which was directly reduced from the original price of 12999 yuan to 10699 yuan, with a price difference of 2300 yuan.
But price reduction is not a long-term solution. Communication expert Xiang Ligang believes that Apple's price reduction promotion is a "double-edged sword" that will increase its market sales in the short term, and on the other hand, it will also damage its high-end brand's market positioning. "Apple's pricing has always been relatively high, attracting consumers with its high-end positioning of high price and high resale value. However, with the rise of domestic smartphones, especially Huawei, this market strategy is slowly becoming ineffective. Under revenue pressure, Apple has no choice but to lower prices."
Serving our own ecosystem
From the perspective of industry development stages, AI smartphones will become the third stage of the mobile phone industry after feature phones and smartphones OPPO founder Chen Yongming believes that in the next five years, The impact of AI on the mobile phone industry is comparable to that of smartphones replacing feature phones in the past.
With AI becoming a standard feature, mobile phone brands have come up with unique strategies to strive for AI to truly improve user experience. In addition to basic functions such as note taking assistant, image assistant, and text organization, Samsung has a "circle search" function for images and real-time translation for calls; OPPO's AI phone can generate ID photos, while Xiaobu Assistant can intelligently generate images and voice chat, which to some extent surpasses the free version of ChatGPT 3.5; Honor's "Magic Model" can support simple semantic instruction video creation; Huawei's selling point is AI remote control.
It is still unclear whether Apple has enough highlights in AI to cope with competition in the face of this situation. Liang Zhenpeng believes that the development strategy of Apple's AI should be based on supporting its own ecosystem as the first step, rather than competing with peers. From a practical perspective, Apple has a huge user base, and the demand for device replacement may be the "first bucket of gold" that Apple earns on AI. It is expected that Apple will first improve the user experience with iOS 18, and then launch more AI compatible hardware, thereby forming new growth points.
An anonymous securities analyst analyzed that "currently, ChatGPT is installed on mobile phones in the form of an app, so overseas iPhone users can directly download the app if they want to use ChatGPT. Therefore, if the content of the cooperation between the two parties can be further optimized with Apple's built-in Siri voice assistant, it will be a significant change. This will enable domestic users to use various chat and dialogue functions even without downloading ChatGPT. Based on the accumulation of OpenAI in the AI field, Apple will also enhance its competitiveness in the field of intelligent interaction and shorten the research and development cycle.".
Beijing Business Daily reporter Tao Feng Wang Zhuli