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Apple to Unveil iOS 18 with AI to Match Google, Microsoft

Apple to unveil iOS 18 with generative AI features, aiming to catch up with rivals in the AI race.

6/10, 00:15 EDT
Apple Inc.
Advanced Micro Devices, Inc.
Amazon.com, Inc.
Alphabet Inc.
Meta Platforms, Inc.
Microsoft Corporation
QUALCOMM Incorporated
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Key Takeaway

  • Apple plans to unveil iOS 18 with generative AI features at its upcoming developers conference, aiming to catch up with rivals.
  • Competitors like Google and Microsoft have already integrated advanced AI into their products, putting pressure on Apple.
  • Enhancing Siri with generative AI could be a key move for Apple, aligning with its focus on user privacy and local data processing.

Apple’s AI Strategy Unveiling

In June 2023, Apple CEO Tim Cook took the stage at the company's annual developers conference to announce the Vision Pro, a mixed-reality headset. This announcement came six months after OpenAI's ChatGPT had launched, capturing the public's imagination with its generative AI capabilities. Despite the buzz around AI, Apple’s presentation notably lacked any mention of generative AI, raising concerns that the company might be lagging behind competitors like Google, Microsoft, Meta, and Amazon, who have heavily invested in AI technologies.

A year later, Apple is set to address these concerns at its upcoming developers conference. Analysts believe that Cook needs to position Apple as a serious contender in the AI race, which is expected to define the next decade of technological growth. "Apple needs to dispel the perception that it has been behind on generative AI," says JPMorgan analyst Samik Chatterjee. The company is expected to unveil iOS 18, a major software update that will integrate generative AI features, marking a significant shift in its strategy.

Competitive Landscape

Apple's competitors have already made significant strides in integrating AI into their products. Google’s Pixel 8 and Samsung’s S24 smartphones, powered by Google’s Gemini AI models, have introduced the concept of the "AI smartphone." In the PC space, companies like Microsoft, Qualcomm, and AMD are leading the charge with AI-powered devices. Apple, however, has yet to launch an iPhone specifically marketed for the AI era, although its new iPads with the M4 chip hint at its ambitions.

The competitive race involves three key dimensions: developing powerful AI chips, creating compelling AI applications, and securing access to advanced generative AI models. Apple has been building a team of top AI talent led by former Google Brain executive John Giannandrea since 2018. The company’s latest A17 Pro chip, found in the iPhone 15 Pro, meets the benchmark for AI capabilities but lags behind competitors in terms of RAM, which is crucial for running compute-heavy AI applications locally on the device.

AI Integration and Challenges

Apple’s strategy has traditionally been to perfect existing technologies rather than pioneer new ones. This approach has worked well in the past, as seen with the iPod and iPhone. However, the rapid advancements in AI have put pressure on Apple to act swiftly. "With AI, it does feel as though Apple has had its hand forced a little bit in terms of the timing," says Leo Gebbie, an analyst at CCS Insight. Tim Cook has recently started talking about AI, aiming to reassure investors about Apple’s capabilities in this area.

One of the concrete steps Apple can take is enhancing Siri, its digital voice assistant, with generative AI. This could make Siri more attuned to user preferences and capable of performing specific tasks more efficiently. "Siri is really the perfect ‘flavour’ of interactive AI," says Tim Bates, a professor at the University of Michigan-Flint College of Innovation & Technology. This approach also aligns with Apple’s focus on user privacy, as running AI features locally on the device can protect personal data.

Street Views

  • Samik Chatterjee, JPMorgan (Cautiously Optimistic on Apple):

    "Apple needs to dispel the perception that it has been behind on generative AI. They need to be able to say: ‘OK, we have caught up with the rest of the industry.’"

  • Leo Gebbie, CCS Insight (Neutral on Apple's AI strategy):

    "With AI, it does feel as though Apple has had its hand forced a little bit in terms of the timing... For a long time Apple preferred not to even speak about ‘AI’ — it liked to speak instead about ‘machine learning.’"
    "That dynamic shifted maybe six months ago when Tim Cook started talking about ‘AI’ and reassuring investors. It was quite fascinating to see Apple, for once, dragged into a conversation that was not on its own terms."

  • Nabila Popal, IDC (Bearish on Apple's growth trajectory without clear AI strategy):

    "If Apple wants to change this trajectory and accelerate this growth, it is crucial for them to outline a clear AI strategy in the coming weeks."

  • Wamsi Mohan, Bank of America (Bullish on potential partnerships enhancing Apple's ecosystem):

    "The killer use case of the AI iPhone will come when Apple can offer a conversational assistant that is fully integrated with everything on the device and then interfacing with some kind of expert agent in the cloud."

Management Quotes

  • Tim Cook, CEO of Apple:

    "[We are] very bullish about our opportunity in generative AI... [we have] advantages that will differentiate us in this new era."