iPhone Maker Unveils AI Strategy At WWDC
Topline
Apple rolled out details for its generative artificial intelligence initiatives—known as “Apple Intelligence”—for the first time Monday, laying out what could be the next big reason for iPhone users to upgrade their devices.
Apple CEO Tim Cook (left) and Apple senior vice president of software engineering Craig Federighi … [+]
Key Facts
CEO Tim Cook said “it’s personal intelligence, and it’s the next big step for Apple.”
Among the generative AI features coming to iPhones at an unspecified date will be image generation, notification summaries and automated messages, according to Cook, who heavily emphasized privacy.
Notably, Apple announced it will integrate the viral chatbot ChatGPT directly into iPhones, allowing the chatbot to write iMessages and answer other generative prompts for free in the next operating system (financial terms of Apple’s deal with Microsoft-backed OpenAI were not disclosed).
Cook teased the “profound new intelligence capabilities” at the start of Apple’s annual Worldwide Developers Conference held at its headquarters in Cupertino, Calif., but the first hour mostly focused on more mundane product updates.
The company also laid out several other changes for its iOS 18 operating system slated for later this year, including scheduled iMessages, Emoji message reactions and satellite SMS messaging designed for texts when users have no cell tower service.
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Surprising Fact
Apple’s stock reacted negatively to the rollout, down about 1.5% in Monday trading, moving against the S&P 500’s positive gains. It’s common for stocks to slump on seemingly positive announcements, given investors’ tendencies to “buy the rumor and sell the news.” Shares of Apple rose 16% from the end of April through last Friday, a rally partially driven by WWDC hype.
Key Background
Media and Wall Street analyst reports alike predicted Apple would use its Monday platform to showcase its AI strategy. Generative AI, which involves machine learning algorithms which spit out information based on human prompts, entered the public eye beginning in late 2022, when OpenAI released its ChatGPT service. Public perception largely placed Apple as a laggard in the AI arms race compared to rivals Google and Microsoft, reflected in the companies’ recent performance in the stock market. Shares of Apple are only up 40% over the last two years, compared to Microsoft stock’s 70% gain and Google parent Alphabet’s 60% rally.
Further Reading
Apple Could Preview An AI IPhone Today: Here’s What Wall Street Expects (Forbes)
How Apple Fell Behind in the AI Arms Race (Wall Street Journal)
