By Aditya Soni and Max A. Charney
(Reuters) – Apple unveiled its long-awaited AI strategy on Monday, integrating new “Apple Intelligence” technologies into a suite of apps including Siri and bringing OpenAI's chatbot ChatGPT to its devices.
During a roughly two-hour presentation at Apple's annual developers conference, CEO Tim Cook and other executives touted how Siri, the voice assistant, will be able to interact with messages, email, calendars and third-party apps, write emails and change the tone of its voice to suit the situation.
The iPhone maker, long known for prioritizing user safety, also hinted at plans to differentiate itself from rivals Microsoft and Google by putting privacy at the “core” of its features.
But Wall Street was less interested in the event, as it was looking for more compelling AI features and guarantees that would give Apple an edge in the field and allow it to compete with market leader Microsoft. Apple shares closed down nearly 2%.
Apple shares, which have lagged other big tech companies this year, had risen 13% in the last month ahead of the event.
“There's nothing to propel the brand further from its predictable trajectory of incrementalism,” said Dipanjan Chatterjee, an analyst at Forrester.
“Apple Intelligence will certainly delight users in small but meaningful ways. It puts Apple on par with its competitors, but not head and shoulders above them.”
Apple's approach contrasts with its business-first rivals, and the company hopes the move will convince its more than 1 billion users, most of whom are not tech enthusiasts, that the emerging technology is necessary.
Apple executive Craig Federighi called Apple Intelligence “AI for people.”
Apple remains overly reliant on iPhone sales, and some analysts say any revenue boost from new AI features is unlikely to materialize in the near term.
“In this early race, Alphabet, and even more so Microsoft, seem in a better position thanks to their earlier moves and cloud assets,” said Paolo Pescatore, analyst and founder of PP Foresight.
The AI features announced at Apple's Worldwide Developers Conference will be included in the company's latest operating system for its devices, which was demoed at the event.
Every year, Apple holds an event at its headquarters in Cupertino, California, to show off updates to its apps and operating system, as well as show developers new tools to use in their apps.
SIRI Renewal
The improved Siri gives you more control, allowing you to do things that were previously difficult to do because the assistant had to understand your exact intent and how the app should work.
Siri will also leverage ChatGPT's expertise and ask for user permission before querying OpenAI services, a privacy feature highlighted by Apple as part of a partnership with the Microsoft-backed startup.
But the partnership immediately raised questions about privacy.
Tesla CEO Elon Musk said at X that if the iPhone maker integrated the startup's technology at the operating system level, his company would immediately ban Apple devices from being used by the company.
The ChatGPT integration will be available later this year, with other AI features to follow, Apple said, adding that the chatbot will be free to access and will not log any user information.
Late Monday, Apple released a paper detailing how its features, including those powered by OpenAI, will keep customer data safe, including having Apple's servers handle even more complex tasks under a new service called Private Cloud Computing.
Apple also said it plans to add technology from other AI companies to its devices, amid reports it is in discussions about a possible collaboration with longtime search partner Google.
To power its AI features, Apple plans to use a combination of on-device processing and cloud computing, which means the AI features will only be available on the latest iPhones starting with the iPhone 15 Pro and upcoming models.
The company has long opposed cloud processing of consumer data due to privacy concerns, but said its approach would strengthen privacy protections because it plans to use its own chips with built-in security features in its data centers.
Analysts say using its own chips could allow Apple to avoid spending on more expensive Nvidia chips.
Apple has announced that the new iOS 18, the software that runs its flagship devices, will make iPhone home screens more customizable.
It will have a “Lock Apps” feature to help protect sensitive information. Users can choose to lock specific apps and have tighter control over their data within the OS.
The company also plans to sell its mixed reality headset, Vision Pro, in eight more countries, including China and Japan. The new VisionOS 2 software for the headset uses machine learning to create natural depth photos and also includes new gestures.
(Reporting by Stephen Nellis, Max A. Charney and Jeffrey Dustin in San Francisco and Aditya Soni, Yuvraj Malik, Pushkala Aripaka and Artray Chatterjee in Bengaluru; Editing by Sayantani Ghosh, Peter Henderson, Matthew Lewis and Jamie Freed)
