‘Classic Apple’: Why Apple is taking the slow road with AI

Apple (AAPL) hosted its annual WWDC event at its Cupertino, Calif., headquarters on Monday, showing off a variety of improvements across its software offerings, including completely overhauled versions of the operating systems that power its devices.

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Bringing developers into the fold Smaller, helpful upgrades

It was a jam-packed show, but one thing Apple didn’t provide was a big, splashy AI announcement like its Big Tech peers Microsoft (MSFT) and Google (GOOG, GOOGL) showed at their respective developer conferences last month.

Wall Street is keen on seeing Apple prove it has what it takes to compete in the AI race, and a showstopping debut, like its highly anticipated generative AI-powered Siri, could have done just that. Instead, Apple said it is opening up its AI software to its army of developers and served up a number of smaller AI features that augment existing apps and platforms with new, helpful capabilities.

And though that might not be the huge blowout news some investors were hoping for, the company’s slower, more focused approach to AI could prove to be its best weapon in the AI fight.

“Apple’s AI strategy, as showcased, leans more towards systemic integration and developer empowerment rather than delivering groundbreaking consumer-facing AI functionalities that have captured market attention,” IDC vice president Francisco Jeronimo wrote in a statement.

“While this carries the risk of competitors moving faster, it also delineates a potential pathway for Apple to offer differentiated value, likely centered on its traditional pillars of privacy and seamless integration. This is a classic Apple modus operandi,” Jeronimo added.

Bringing developers into the fold

Perhaps the most important AI announcement at WWDC was the news that Apple is opening up its on-device language models to third-party developers. While this might not sound all that interesting in and of itself, the move could pay significant dividends in the future.

Apple’s decision to give its roughly 30 million developers access to its language models is “somewhat akin to a modernized App Store moment,” Morgan Stanley’s Erik Woodring said.

When Apple launched its App Store in 2008, it kicked off a massive explosion in app development that upended everything from delivery and transportation services to e-commerce and social media. It also gave Apple a fresh revenue stream via commissions on in-app purchases.

Opening its AI models to developers could likewise help spur developers to create new software options that go well beyond what Apple could produce on its own, driving the development of apps and services that could eventually become household names.

Providing access to Apple’s on-device models has the additional benefit of saving developers money, since they don’t have to pay to access cloud-based AI models. It also ensures users’ privacy by keeping their data on their iPhones, iPads, and Macs.

“This move to empower developers is strategically important, as it allows Apple to leverage its vast developer community to infuse the ecosystem with AI capabilities and more specialized AI applications while driving innovation,” IDC’s Jeronimo wrote.

Smaller, helpful upgrades

Apple’s AI updates aimed to be more helpful than the broader Apple Intelligence unveiling at last year’s WWDC. They also help put Apple on par with some of Google and Samsung’s own AI capabilities.

For instance, Apple will now offer live real-time translation across its Phone, FaceTime, and Messages apps.

Apple says translated voices will mimic the sound of a person’s natural voice. So, if someone on the other end of the line speaks Spanish, and Apple Intelligence is translating it to English, the English translation will sound similar to how the Spanish speaker would sound if they were speaking English.

Apple also upgraded Visual Intelligence, the company’s visual search app, with the ability to understand content on your device’s screen and search for more information about it online using Google, ChatGPT, or other third-party apps.

Apple similarly added AI capabilities to its Reminders app and introduced a generative AI-powered fitness coach to the Apple Watch’s Workout app to help keep you hustling.

The moves, though not revolutionary, help Apple bolster its AI capabilities, ensuring it doesn’t fall further behind its competitors. Such iterative improvements will also add up over time as developers integrate AI deeper into apps and services and make it less of a singular product like ChatGPT or Google’s Gemini and more of a holistic feature of Apple’s operating systems that fades into the background.

And that could be just the approach the company needs to take to win out in the AI race.