(Bloomberg) — Apple Inc.’s developers conference on Monday will show whether the iPhone maker can become a major player in the burgeoning field of artificial intelligence, marking a critical moment for a company forced to adapt to a new era.
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Though Apple was an early pioneer in AI, which it has used in photo processing, health features and the Siri digital assistant, it’s now seen as a laggard — especially since ChatGPT and other cutting-edge technology hit the scene in the past two years.
Against that backdrop, Apple promises to demonstrate its AI prowess during a keynote address at its annual Worldwide Developers Conference, which starts at 10 a.m. California time. The company will lay out a suite of features that it calls Apple Intelligence, people familiar with the matter have said.
While Apple launched Siri in 2011, its voice technology was quickly overtaken by Alexa from Amazon.com Inc and Alphabet Inc.’s Google Assistant. AI took another leap with OpenAI’s ChatGPT at the end of 2022 and rival services from Google, Microsoft Corp., Meta Platforms Inc. and others during 2023.
Adding to the pressure: Samsung Electronics Co. — Apple’s biggest smartphone rival — integrated Google AI features into its devices earlier this year.
The shift to artificial intelligence promises to be a big opportunity for Apple if it can hone its technology and catch up with rivals. AI-based operating systems will change how people gather information, create and edit content, and navigate their devices.
At the event, Apple will show how it’s weaving AI features into its next software updates: iOS 18, iPadOS 18 and macOS 15. The company is also planning a more powerful version of Siri.
Apple Intelligence will focus on providing more information to users when they need it. That involves summarizing notifications, text messages and emails; synthesizing meeting notes; transcribing voice memos; and even creating custom emojis. The software also will be able to sort through emails and classify them into categories.
Apple also has been working on its own large language models — the technology behind ChatGPT-style services — but it’s not far enough along in that area, people familiar with the matter have said. So it’s planning to announce a partnership with OpenAI that will supply Apple with a chatbot.
Apple has one major advantage as it pushes deeper into AI: a massive number of loyal consumers. That could help make the company a success in AI even without breaking ground in large language models, said Bernstein analyst Toni Sacconaghi.
“It has a very powerful consumer installed base for which it can act as a channel — just like it has for search and the App Store, the two most lucrative parts of Apple’s business today, outside of iPhone,” he said.
One concern is whether the OpenAI deal means that fewer users will be using Google search on the iPhone. Apple generates billions of dollars per year through a revenue sharing agreement with Google. The terms of Apple’s deal with OpenAI, meanwhile, aren’t clear. And Apple is still negotiating a separate agreement with Google to eventually also add its Gemini technology as a chatbot option on the iPhone, Bloomberg has reported.
It’s likely that Apple will eventually want to offer its own chatbots and other generative AI, but having partners helps it navigate the artificial intelligence industry without taking on as many risks. OpenAI and Google have suffered some backlash from chatbots providing incorrect information.
Apple wants to avoid that, said Ruslan Salakhutdinov, a former director of AI research at the iPhone maker and a professor of computer science at Carnegie Mellon University.
“They’ve always watched what the space is like and have long decided they don’t have to be first, but they have to get it right,” he said.
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