Recently, the Apple Global Developers Conference has stirred up nerves in the technology and industry circles, and even alarmed the capital market. On June 11th and early morning of June 12th Beijing time, Apple's stock price fell and then surged with the convening of this press conference. During the day of June 12th, A-share consumer electronics industry chain concept stocks, especially Apple concept stocks, collectively rose.
Behind the rise and fall of the stock price, it reflects the ups and downs of capital's judgment of Apple's value, but Apple's impact on the industry does not change due to its stock price fluctuations. At the meeting, Apple released its AI "weapon", Apple Intelligence, and teamed up with OpenAI to provide generative AI services using ChatGPT, releasing a strong signal to focus on generative AI. Apple's official entry also marks a firm optimism among technology giants about the future trend of intelligence. At this point, global mobile phone giants have all gathered on the generative AI track, and for a long period of time in the future, the entire consumer electronics industry chain will also engage in intelligent competition around generative AI.
As for the impact of generative AI on the industry, industry experts interviewed told Securities Times · e Company reporters that the biggest difference between generative AI phones and traditional phones is that it opens up the possibility of differentiated and diversified innovation for the industry, and the differentiated competition in the industry will accelerate in the future.
Apple's AI Strategy Comes Late
Since the rapid development of generative AI in early 2023, Apple has repeatedly stated that it is increasing investment in the AI field. However, the specific strategic tactics that Apple will adopt in the field of generative AI were not known to the outside world before the Apple Global Developers Conference.
From the information released at the press conference, it can be seen that Apple's generative AI strategy is nothing more than empowering the entire Apple iOS closed-loop ecosystem with the latest release of Apple Intelligence, including chips, operating systems, computing power, applications, and intelligent hardware, to achieve the output of generative AI capabilities for terminals within the entire ecosystem. However, currently only the latest Apple phones, iPhone 15 Pro and iPhone 15 Pro Max, as well as most PC and iPad products, are available in English only in the United States this year, and other languages and models will not be available until next year. This means that domestic Apple users cannot experience the generative AI capabilities of Apple terminals until the device language is changed to English environment.
At present, Apple terminals are capable of outputting generative AI capabilities, including AI replies to emails, AI replies to emoticons, AI cutouts, AI elimination, calls, recording to text, etc. The vast majority of these are also generative AI applications that Android AI phones can provide today.
In addition, in terms of the installation method of AI big models, Apple also adopts the most mainstream end-to-end cloud integration model, which mainly focuses on end-to-end big models to provide users with more efficient, low latency, and safer services. When local computing power is insufficient, it will call partners such as OpenAI's ChatGPT big oracle model to empower.
Prior to Apple's announcement of the aforementioned strategy, mobile phone manufacturers such as Huawei, Honor, vivo, OPPO, Xiaomi, Samsung, etc. had already publicly disclosed their own generative AI strategies and launched their own generative AI phones. In comparison, Apple's generative AI strategy did not bring the huge innovation expected by the outside world, and Android manufacturers had already explored the relevant strategies and tactics in advance.
Emphasis on enhancing one's own AI ecosystem closed loop
Although there are voices outside suggesting that Apple is copying Android vendor AI operations, Apple's generative AI strategy also has its own unique features.
"Indeed, from an industry perspective, Apple's AI strategy announced this time has not brought much innovation, but the biggest difference between Apple and Android manufacturers in terms of AI is that Apple is strengthening its iOS closed-loop ecosystem through generative AI capabilities." Omdia Chief Analyst Li Zegang told Securities Times · e Company reporters that the vast majority of AI applications that Apple can currently provide will call its self-developed apps, such as search, maps, images, etc. The chips are also self-developed chips, and the generative AI capabilities of Android manufacturers' terminals mostly come from cooperation with third-party app developers. The generative AI capabilities output from the system will provide a better user experience, which is also beneficial. "Strengthen the closed-loop ecosystem of Apple.
In addition, the collaboration between Apple and OpenAI has also shown the outside world Apple's confidence in the development of AI. "The adoption of cloud based collaboration with external partners indicates that Apple has taken the mainstream path in the development of generative AI. In the future, Apple may continue to expand external cooperation, enhance the ability of cloud based big models, and choose different big model partners in different regions to enrich user experience," Li Zegang told reporters.
"At first glance, Apple's AI applications and other products may not differ much from those of Android manufacturers, but upon closer examination, it is found that these AI weapons will strengthen Apple's various advantages." In Li Zegang's view, this may be one of the reasons why Apple's stock price has fallen first and then surged in the past two days. "Of course, there may also be capital forces behind it.".
There are many Apple AI strategists who have high expectations. IDC China Senior Analyst Yang Wen also told reporters that Apple's upgrade goes beyond simple product iteration and is essentially an AI technology led reshaping of the entire industry value chain. In the long run, Apple continues to increase its AI investment, perhaps building an end-to-end ecosystem that fully integrates AI from hardware foundation to application layer, enhancing its market position and core technology autonomy.
Privacy and security have become one of the important challenges
It is worth mentioning that Apple has always regarded itself as a closed loop iOS ecosystem, and the biggest feature of this ecosystem is that it is conducive to protecting user privacy. Nowadays, Apple rarely opens up cooperation, and joining hands with OpenAI will inevitably raise concerns about user privacy and security.
American billionaire Elon Musk was the first public figure to publicly oppose Apple's hand in hand with OpenAI. After Apple's press conference, he publicly stated that once user data is handed over to OpenAI, Apple cannot regulate the other party at all. Therefore, he will ban the use of Apple devices in his own company for security reasons.
In response to user concerns, Apple has repeatedly emphasized the importance of user privacy and security on WWDC24. Apple claims that the cloud server built by Apple Intelligence uses Apple's own chips and is programmed in Swift language. The server code is subject to third-party expert review. Meanwhile, Apple promises that user uploaded data will not be stored on servers, and user privacy will not be recorded or known by Apple.
However, despite this, in the industry's view, how to handle user privacy and security issues is still a major challenge that Apple will face in the future development of generative AI.
"The concept of privacy and security is very vague. In different countries and regions, people have different perceptions of privacy and legal boundaries. Therefore, how to handle this issue well will be one of the challenges for Apple's future development of generative AI," Li Zegang told reporters.
Yang Wen told reporters that facing the challenges of data security in the AI era, Apple has not chosen to keep up with hot topics at the AI level, giving itself enough time to prepare. This upgrade introduces a private cloud solution, which performs complex AI operations on the device side, reduces the risk of data leakage, and strengthens the defense line of user data security.
From an industry perspective, Apple's cooperation may indirectly promote the formation of industry AI cooperation mechanisms. "Given the legal differences, cultural characteristics, and market acceptance in various regions around the world, the cooperation between Apple and OpenAI will promote a more flexible global market strategy. In the future, industry AI functions and services may be deeply localized, crossing language barriers, accurately matching the specific habits and needs of users in different regions, and achieving seamless integration of AI technology while strictly complying with privacy regulations in each region," said Yang Wen.
The collaboration between Apple and OpenAI will also promote the development of cross platform integration trends in the industry. Yang Wen believes that although the current Apple ecosystem is relatively closed, cooperation with OpenAI may represent a more open attitude. In the future, Apple may deepen its collaboration with other platforms while maintaining ecological uniqueness, giving rise to innovative applications that have not appeared for many years, and promoting industry boundary expansion.
Accelerated differentiated competition in consumer electronics
Over the past few years, the consumer electronics industry has seen an overall homogenized competition in products such as smartphones, watches, headphones, and computers. This is not only reflected in similar product configurations and similar product functions, but also in the development of generative AI, industry differentiation is expected to accelerate.
Li Zegang told reporters that the biggest difference between generative AI phones and traditional smartphones is that it provides mobile phone manufacturers with the possibility of creating differentiation. "After the penetration of generative AI technology, the user groups of various mobile phone brands and enterprises are different, and the user data is different. Therefore, the large models trained and built based on their own data have their own characteristics. Therefore, in the future, the generative AI services that various mobile phone companies can provide to users will also have significant differences. Ultimately, generative AI phones will develop into intelligent agents that understand each user the most, becoming smart phones with thousands of people and faces.".
Li Zegang added that generative AI smartphones will also bring changes to the industry's human-computer interaction paradigm. People will no longer need to use high-frequency touch screens to interact with terminals, but can use more natural and simple methods such as gestures, natural language, and eye contact to interact with terminals. In this mode, industry differentiation will also be more significant.
Regarding generative AI phones, Counterpoint recently published an article stating that generative AI phones utilize large-scale, pre trained generative AI models to achieve multimodal content generation, situational awareness, and continuously enhance human like abilities. The organization believes that out of the 1.17 billion smartphones shipped throughout 2023, less than 1% of them meet Counterpoint's definition of generative AI smartphones. However, it is expected that by 2027, the penetration rate of generative AI smartphones will reach around 43%.
After ChatGPT became popular in early 2023, various mobile phone manufacturers have embraced generative AI and since the end of 2023, they have successively launched their own generative AI phones. At the beginning of this year, generative AI phones began to penetrate into some brands of mid-range phones.
However, in the industry's view, generative AI smartphones are still in their early stages of development. "At present, the exploration of generative AI technology in the industry is still in its initial stage, and the related generative AI applications that have been launched are still icing on the cake for smartphones. Moreover, this situation is unlikely to undergo significant changes in the next two to three years. Developing generative AI is a long-term vision for the industry," Li Zegang told reporters.
At present, the entire mobile phone industry chain is embracing generative AI technology, including chip processor manufacturers, storage manufacturers, brand enterprises, and developers. Enterprises such as Honor and OPPO have also repeatedly called for the industry to jointly build a generative AI ecosystem, and this year is also considered the first year of the development of generative AI smartphones.
"Apple's official entry into AI and the fact that the first year of development of generative AI smartphones is established will accelerate the evolution of the entire industry towards more personalized, efficient, and diversified AI applications," Yang Wen told reporters.
Yang Wen believes that with the widespread application of Apple Intelligence, the demand for hardware components optimized specifically for AI, such as terminal AI specific chips, may increase. The advancement of such hardware can not only optimize user experience, but also lead a new wave of hardware for smartphones and wearable technology.