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Apple Kickstarts AI Journey with Apple Intelligence Riding on CAPEX (CApable Personalized EXperiences) Push

  • Apple has unveiled a well-rounded strategy to bring Generative AI capabilities to its ecosystem.
  • Given the high level of external focus on its AI plans, Apple strategically placed AI at the end of its WWDC24 keynote, branding it ‘Apple Intelligence’, a clever move to gain a greater mind share to start with.
  • The fact that Apple is positioning it as a capable personalized experience that is based on great architecture, the name Apple intelligence is likely to resonate with users a lot going forward.
  • The initial use cases announced range from new features for writing, focusing and communication to image creation. 

The era of artificial intelligence (or ‘Apple Intelligence’ as the company would like to describe it) beckons Apple users. At its WWDC24 event on Monday, the company unveiled a well-rounded strategy to bring Generative AI capabilities to its ecosystem. Given the high level of external focus on its AI plans, Apple strategically placed AI at the end of its keynote, branding it ‘Apple Intelligence’, a clever move to gain a greater mind share to start with. The fact that Apple is positioning it as a capable personalized experience that is based on great architecture, the name Apple intelligence is likely to resonate with users a lot going forward.

Image Source: Apple
  • Unlike Google, Apple avoided creating an overly grandiose narrative for AI. Instead, it focused on specific, practical applications. A consumer-friendly approach will truly encourage the mass adoption of AI on its devices. Therefore, Apple has taken a holistic and highly integrated approach to bringing GenAI experiences to its ecosystem.
  • The initial use cases announced range from new features for writing, focusing and communication to image creation. Apple orchestrated hundreds of actions for end users that make the device experience more personalized. We believe it is an elegant weaving of ‘typical’ AI features like text summary, image creation and contextual info retrieval.

Key AI features:

  • Summarize text
  • Create original images
  • Retrieve relevant data when needed
  • Siri-ChatGPT free access
  • Transcribe phone calls and voice memos
  • Solve advanced math equations
  • Sort through emails
  • Prioritize notifications
Image Source: Apple
  • In Siri 2.0, Siri becomes more useful in communicating in a natural conversational and contextual language, the capability being built on top of the App Intent framework, now powered by LLMs. This allows Siri to be more intelligent and take new actions across the apps. Future scenarios for how GenAI, and AImore broadly, can deliver real value to consumers often focus on the evolving role of digital assistants based on software agents.
  • Despite collaborating with OpenAI, Apple ensured that its capabilities were not overshadowed. For instance, Siri asks for user consent, thus maintaining the strength of its own AI.
  • At the foundation is Apple Silicon, one of the most powerful and advanced computes available in the market, with the capability to unlock those advanced AI features natively on Apple hardware. Apple also shared the list of devices compatible with Apple Intelligence, starting with the iPhone 15 Pro series in iPhones and iPads.
Image Source: Apple
  • Built on this are Apple’s ‘Foundation models and Adapters’ trained with underlying privacy-focused “Responsible AI” principles. Adapters are the small neural network modules that fine-tune the models for specific tasks.
Image Source: Apple
  • Layered on the FM is the ‘App intents’ framework, which is the linchpin here in Apple‘s overall AI strategy. The framework exposes the AI capabilities and drives deeper integration into Apple’s prized application ecosystem. This is the holy grail of Apple’s AI strategy.
  • OpenAI-ChatGPT-4o partnership adds an extra layer of intelligence for complex queries with universal data across apps.
  • We believe users and developers will trust Apple’s “privacy-led” narrative both at the edge and in the cloud (Apple’s Private Cloud Compute) to “opt in” with their data to boost the Apple Intelligence strategy.
  • While it is free for now, at some point Apple will either raise the hardware prices or go with the “hardware-as-a-service” model and start charging for AI.
  • It can also be a double-sided business model where developers can also earn some (if Apple is generous enough) incentive to integrate App Intents.

Overall, Counterpoint believes that Apple will have more than 250 million fully Apple Intelligence-capable devices by the end of 2025 for developers, Apple and users to start enjoying the scale of Apple Intelligence.

WWDC 2024 – OS Updates

iOS 18 overshadowed, not overlooked

iOS 18 is about customization, productivity and communication. Updates include:

  • Upgraded home screen, control center
  • Upgraded messaging:
  • Finally supporting RCS – green bubbles remain
  • iOS-Android messaging to support higher-quality images, videos, read receipts, E2E encryption
  • Scheduling
  • New text effects
  • Enhanced Face ID capabilities
Image Source: Apple

iPadOS 18: Redesigned App Experiences

  • iPadOS 18 brings redesigned experiences across apps, unlocking more capabilities for Apple Pencil.
  • Customized control center, home screen and an updated photo app from iOS18 coming to iPadOS18 as well.
  • A floating tab bar makes it easier to navigate between different parts of the app.
  • Apple brings a native calculator app for iPad.
  • Math notes and smart script unlock the capabilities of Apple Pencil, leveraging powerful on-device machine learning capabilities.
  • Messages in iPadOS18 get an update in the form of text formatting, redesigned Tapbacks and the ability to schedule messages at a later time.
Image Source: Apple

macOS Sequoia: Focus on Continuity and Productivity

  • iPhone Mirroring makes Continuity “More Magical”
  • Interact with and control iPhone directly from Mac
  • Safari becomes more productive
  • ‘Highlights’ automatically detects relevant information
    from a webpage by using machine learning
  • Distraction-free video experience
  • Unified gaming platform
  • Easier to bring Mac games to iPad and iOS using
    Game Porting Toolkit 2
  • More game titles
  • Presenter preview and backgrounds for video calls
Image Source: Apple

watchOS18 – Fitness Remains Central to Watch Experience

watchOS18 gets an update on fitness and deeper personalization

  • Vitals app helps users make more informed decisions about their health on a day-to-day basis.
  • Watch becomes more personalized with an update to the fitness app, activity rings and Photos watch face.
  • More intelligent Smart Stack, new widgets, and even suggestions for widgets. The double-tap gesture can now be used to scroll through any app.
  • Translate app comes to the watch with 20 supported languages.
  • New APIs for developers to take advantage of the capabilities of Smart Stack and double-tap gesture.
Image Source: Apple

Vision Pro Expands to New  Geographies; visionOS2 Uninspiring, but a Step Forward

  • Apple Vision Pro, exclusively available in the US since February, will now be launched in nine new markets.
  • visionOS 2 was also previewed with some interesting features:
    • Can create spatial photos from existing libraries
    • Navigate using new hand gestures
    • Watch videos in environments
    • Developers will have access to new APIs and frameworks to create more immersive experiences

Overall, we believe the WWDC 24 lived up to its expectations and Apple made it look very smooth. But, like watching a duck on the water, we suspect there is a lot of frantic paddling going on inside. At the same time, Apple is best positioned to make AI and GenAI work well for consumers thanks to its Hardware-as-a-Service business model.

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Counterpoint research is a young and fast growing research firm covering analysis of the tech industry. Coverage areas are connected devices, digital consumer goods, software & applications and other adjacent topics. We provide syndicated research reports as well as tailored. Our seminars and workshops for companies and institutions are popular and available on demand. Consulting and customized work on the above topics is provided for high precision projects.

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