Apple (AAPL) will hold its annual iPhone launch event on Monday, September 9th at its headquarters in Cupertino, California.
CEO Tim Cook is expected to headline the keynote, which will reportedly include the debut of the iPhone 16 lineup, a 10th anniversary model of the Apple Watch, and updated AirPods.
That’s a lot of hardware, but Wall Street isn’t counting on new iPhones or special edition Apple Watches to move the company’s stock price. Instead, the focus will be on the Apple Intelligence platform, which leverages Apple’s generative AI.
Apple Intelligence is the company’s major effort to bring generative AI capabilities to consumers’ iPhones, iPads, and Macs. Wall Street was less enthusiastic about how long it took for Apple to announce its AI efforts, with Microsoft (MSFT) and Google (GOOG, GOOGL) offering their own AI for businesses and consumers. We’ve been waiting to debut the service.
But investors changed their minds after Apple unveiled Apple Intelligence at its WWDC developer conference in June, sending the company’s stock up about 15% and outperforming Microsoft, Amazon, Tesla and Google in year-to-date results.
Apple CEO Tim Cook speaks at Apple’s annual Worldwide Developer Conference (WDC) in Cupertino, California on June 10, 2024 (NIC COURY/AFP via Getty Images) · NIC COURY via Getty Images
Apple has set Apple Intelligence as one of the main selling points of its latest phones, as its software only works on phones starting with last year’s iPhone 15 Pro. And analysts expect that exclusivity will help boost iPhone sales.
“Apple Intelligence remains key to unlocking pent-up iPhone demand and accelerating the replacement cycle,” Morgan Stanley analyst Eric Woodring said in a note to investors. We expect that the integration of AI into the new iPhone 16 will receive a lot of attention.”
But Apple Intelligence could be more than just a catalyst for iPhone sales. It will also serve as a make-or-break moment for generative AI in the eyes of everyday consumers.
Looking at the invitation to Apple’s September 9th show, it’s clear that the company is fully committed to AI. From the tagline “It’s Glowtime” to the multicolored Apple logo that evokes Siri’s revamped look, the company is sending the message that the show will be a showcase for AI.
Apple is adding AI to its software products with features such as summarizing text message threads, showing prioritized emails in the Mail app, providing an improved Siri experience, and providing access to OpenAI’s ChatGPT. is poured into it.
Apple also includes AI staples like writing tools that can help make your emails and documents more engaging by proofreading and reworking text to sound more professional or concise. I am. The company also expects developers to jump on the AI train and build new apps that leverage the technology through Apple devices.
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Wedbush analyst Dan Ives said: “This is where it all begins, and it’s the start of a new multi-pronged AI revenue stream driven by both hardware and software, which will allow Apple to increase its service premium.” We estimate that margins could increase incrementally by $10 billion annually.” he wrote in a note to investors.
“We believe the introduction of AI technology into Apple’s ecosystem will provide monetization opportunities on both the services and iPhone/hardware sides,” Ives added. This would result in a price increase of $30 to $40 per share, and the company’s market capitalization would reach the $4 trillion level.
Apple isn’t the only company to introduce generative AI to its smartphone products. Samsung has Galaxy AI software that combines its own AI with some of Google’s AI smarts. Google also offers its own Gemini AI platform through its new Pixel 9 device series, including the Pixel 9 Pro Fold foldable phone.
But Apple does a much better job of explaining its AI products than its competitors. At a developer conference in June, the software appears to be a must-have for users, making AI seem more personal and integrating the company’s various apps and services in ways that Samsung and Google have not been able to. explained the method.
But Apple will have to do more than that to get people excited about its AI efforts. I’m using Apple’s beta software on my iPhone 15 Pro Max, and while I appreciate the ability to summarize long text message threads between friends, I don’t want to send 40 messages to find out what’s for dinner. No one likes having to be selective. Even if you find Mail’s prioritized email feature helpful, it’s hard to tell if it’s enough to spark consumer interest in the technology.
Apple also believes its Apple Intelligence is accurate and less prone to the kinds of hallucinations that have led to criticism of AI software like Google’s AI Overview, which famously told people to put glue on their pizza and eat it. You will need to be very careful to make sure. rock.
Above all, Apple has made sure that Apple Intelligence is something that consumers will actually want to use and that it has forced its way into its portfolio to appease investors worried that Apple will miss the next tech hype train. It is necessary to confirm that it is not a built-in function.
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