Track Hyper | Apple's delay: Microsoft's joys and sorrows

How will Apple do AI? This question has attracted global attention. As the Apple WWDC24 approaches, rumors about the AI technology and application direction that Apple may launch are becoming more intense.

The latest news indicates that due to technical difficulties and slower-than-expected R&D progress, the major upgrade of Siri in Apple's iOS 18 has been postponed to 2025.

Previous reports mentioned that with the integration of AI technology, users will be able to control all applications on various Apple devices (iPhone, iPad, Mac) through Siri using voice commands.

With just a voice command, users can perform various operations through Siri, such as opening documents, moving notes to another folder, sending or deleting emails, opening specific articles in Apple News, sharing web links, and even requesting device-generated article summaries.

These new features will enable Siri to better understand user needs, provide more accurate and useful information, and help users complete tasks more efficiently. Additionally, the new Siri will have stronger capabilities for intelligent learning and self-optimization, continuously adapting to and meeting personalized user needs.

Although it sounds promising, given Apple's usual efficiency, applications that sound promising like this one usually face multiple delays. Now, the first delay is set for 2025.

Nevertheless, despite the absence of Siri's AI application technology at WWDC24, details are expected to be revealed when the iPhone16 series is launched in September this year. This is seen by the industry as the first version of Siri with AI integration. Subsequently, by 2025, the first Siri with GenAI (Generative Artificial Intelligence) technology will be launched as scheduled.

Currently, Apple does not have a more unique edge AI technology strategy. In other words, Apple also adopts the mainstream edge-cloud hybrid strategy in the industry: running some basic applications locally on the edge, while the cloud side handles AI training and inference tasks that require more computing power and energy consumption.

Similar to Honor choosing Google Cloud for the cloud side, Apple has selected OpenAI as its cloud-side partner. On June 1st, there were reports that the cooperation agreement between Apple and OpenAI had been finalized. Both parties have not disclosed more detailed information about this agreement.

The intention of Apple to empower Siri with GenAI technology is not difficult to speculate: firstly, to use the new "Siri" AI feature, it must be on hardware terminals with M1 chips and iPhone 15 Pro or above, naturally leading to a new wave of device upgrades; secondly, through this method (the new wave of device upgrades), Apple aims to regain its position in the top tier of AI and reclaim its lost glory. Apple's progress in the field of GenAI technology has been disappointing. If the new version of Siri succeeds, the benefits will be significant However, whether this effort can be accepted by users is still hard to say.

Because Apple's industry-leading and incompletely replicable excellent experience comes from a closed technical framework and system of software and hardware integration. Now, to use non-Apple-developed cloud-side AI computing power to undertake training and inference tasks, it is necessary to upload user data to the cloud side, which goes against the cornerstone of Apple's success, the closed nature of the "software and hardware integration".

This is equivalent to shaking the foundation of Apple's iOS empire, forcing Apple to open up its system. The security issue involved in this—user privacy, how to ensure the same high level of security as before?

Although Apple's self-developed chips such as M1 have a "Secure Enclave" module that can encrypt user data uploaded to the cloud side of partners, it is still unknown to what extent they can protect.

From the currently known information, OpenAI will play an indispensable core technology service role in Apple's new version of "Siri" entrance. The impact of OpenAI's technical role not only affects Apple's own technical system but also influences the core of Apple's ecosystem, such as the alliance with Google.

Currently, the search service on Apple's Safari browser is provided by Google; at the same time, Google is also one of the main competitors of OpenAI. One of the cooperation contents between OpenAI and Apple is said to be the search function. Another company affected by the cooperation between the two is Apple's old rival Microsoft.

Google has not made any public statements about the competitive relationship between Apple's new favorite and itself. But it is said that Microsoft CEO Nadella is very nervous because Microsoft also wants to cooperate with OpenAI to expand new business market space in the consumer electronics field. Now, OpenAI has chosen to "empower" its old enemy Apple, what should Microsoft do?

Fortunately, the cooperation between Apple and OpenAI is also beneficial to Microsoft—OpenAI's cloud service provider is Microsoft. So, if Apple uses OpenAI's computing power, AI conversation function, and AI training and inference results, it actually indirectly means giving money to Microsoft.

As for Apple, with the blessing of OpenAI, it now has the ability to transform into an AI phone—an AI iPhone. Will this continue to suppress the mobile internet as before, with the Wintel alliance as the representative, it is still uncertain whether the east wind will overpower the west wind or vice versa.

From the current competitive situation, Microsoft is still one step ahead of Apple. But how long this lead can last is hard to say, after all, the GenAI smartphone market is growing at an astonishing rate.

According to a report just released by Counterpoint Research on June 3, smartphones with GenAI capabilities accounted for 6% of global smartphone sales in the first quarter of 2024, up from 1.3% in the previous quarter. In the first quarter of 2024, high-end models accounted for over 70% of smartphone sales with GenAI capabilities The GenAI mobile phone market trends and development speed are amazing. It would make sense for Apple to transform into a GenAI iPhone, and Microsoft is indeed right to be nervous