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Don’t count Apple out of the AI race

Apple CEO Tim Cook below the Apple logo.Apple CEO Tim Cook at the Worldwide Developers Conference in 2023.

Josh Edelson/AFP Getty Images

  • Apple has largely held off from making any big reveals about its AI plans.
  • A tech analyst says that that’s par for course for the company.
  • “Apple is rarely first to market,” an analyst told BI.

For the better part of last year, Apple has felt increasing pressure from investors to debut in the generative AI space.

Google and Microsoft have rolled out AI-integrated products — to varying degrees of success — and OpenAI last week introduced its latest iteration of its wildly popular ChatGPT language model, GPT-4o.

Announcements about Apple’s AI moves have been mainly limited to media reports and assurances from CEO Tim Cook, who promised in February that AI “will affect every product and service we have.”

Still, company investors are getting impatient. As Apple’s Worldwide Developers Conference comes in June, analysts say Apple will have to show off its AI goods to appease shareholders.

“They have to do it,” Gene Munster, managing partner at Deepwater Asset Management, told Business Insider. “The future of computing is to have multimodal AI everywhere,”

But does it matter that the tech company is late, as many analysts have declared?

Carolina Milanesi, principal analyst at Creative Strategies, a tech consulting firm, told BI that Apple’s success has rarely been defined by its ability to be first. Just look at the iPhone, iPad, or the Apple Watch.

“Apple is very rarely first to market,” Milanesi said. “They prefer to come in and disrupt the market — take anything from wearables to smartphones to tablets. They’ve never been first.”

Before Apple debuted the iPhone in 2007, Blackberry dominated the smartphone market. Tablets existed decades before the iPad launched in 2010. And the Apple Watch came only after other companies like Sony and Samsung began to enter the wearable space.

Milanesi thinks AI will be no different.

However, the analyst also argues that AI’s impact on Apple is unique since the Cupertino-based company relies less on revenue streams directly from AI. Apple’s driving source of revenue remains the iPhone despite declining sales.

Milanesi said what will be critical for Apple is to show how it will continue to add value to its existing ecosystem of products and services by integrating artificial intelligence.

“The way they’re going to leverage AI and how they’re going to bring value back to their business is going to be very different from the way that Google and Microsoft and Amazon Web Services do it,” she said. “For those companies, it’s all about the cloud, running the LLMs in the cloud, and monetizing from that.”

Apple did not immediately respond to a request for comment from Business Insider.

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