What’s Better-AI or Apple Intelligence?

Last week, Apple announced the new software features for its various products, including the iPhone, iPad and Mac. During their presentation, Apple compared and contrasted Apple Intelligence and artificial intelligence. Apple Intelligence will focus on taking what it does now and doing it even better with even better privacy. This includes searching texts and photos, creating images, fixing grammar and spelling, upgrading emojis, adding ChatGPT, summarizing text, and editing photos. The Apple Intelligence features will be available in September.

Many of the tech pundits were underwhelmed by Apple’s announcement calling it “small potatoes.” Certainly, Apple’s new features won’t cure cancer, as we hope AI might. However, what we do know is that Apple will have some very specific important functions for all of us, and it will be done extremely well as Apple consistently does. Perhaps Apple’s “AI Killer” has it just right for our personal tasks.

Let’s take a look what we have come to expect from Apple:

Apple’s success has not come from being an innovator. Blackberry was the first manufacturer of mobile phones in 1999. Blackberry introduced the smartphone in 2002. At its peak, in 2011, Blackberry had 85 million subscribers worldwide. Apple released its first iPhone on June 29, 2007. Today, over 1.3 billion people worldwide use iPhones. iPhones represent 62% of the smartphones in the U.S.

Instead, Apple is known for taking something invented elsewhere and improving it. They employ world-class industrial design to make it easier to use, extremely consumer friendly and more reliable. While the tech press has been telling us Apple is way behind in AI, Apple is doing its thing the wonderful way it does it. While their rivals are having gaffes and producing concerns about AI, Apple is focusing on the needs, wants and wishes of its billion consumers.

Apple does generate patents- over 2,000 each year, but these are primarily improvements not innovations. Their patents include new glues to bond layers of glass and plastic together and specific cutting of white cardboard presentation boxes. It’s all about making a fantastic product that consumers love and demand. While some say the new Apple Intelligence will only work on iPhone 15 Pro or 15 Pro Max and therefore will have slow acceptance, we think it is likely that Apple will instead end up selling lots more new iPhones, iPads and Macs so that the consumer can be connected the way they want to be-with Apple Intelligence.

Chat GPT will be part of the Apple Intelligence software. Yes, some of the big tech companies are saying they will develop an AI phone to compete with Apple. However, most of us would rather have ChatGPT on an Apple phone than have a ChatGPT AI phone. We know what to expect with Apple.

At the same time, Apple is not so far behind in revenue being produced by AI. Alphabet, Amazon and Microsoft, the big investors in AI, are expected to generate $20 billion in revenue from AI in 2024. That’s only 2% of their combined revenue. Apple makes $20 billion a year from AirPods. There’s a real question on how quickly AI will produce significant income. And concerns about whether AI will either save us or kill us all.

The stock markets have appreciated greatly over the last 18 months, much of it coming from the rise in value of the “Magnificent Seven” stocks, all connected heavily to Generative AI. Some would say that those valuations have jumped up too quickly, as the real impact of Generative AI has not yet been felt in businesses around the world and may take more time. Fortunately, this is not like the dot.com bubble bust in 2000 when valuations of companies with “great promise” but no profits and no cash were bid up sky high and then crashed. The Magnificent Seven have a strong track record of making lots of money and have lots of cash on hand. Also, because of the lack of antitrust activity for the last forty years, the Magnificent Seven are either monopolies or oligopolies- that makes for very strong businesses. Certainly, valuations can pullback or correct, but the Magnificent Seven are not expected to produce a dot.com bubble bust.

It seems we have two versions of AI right now. One is generative AI, with huge possibilities and some huge concerns on its impact on us and the World. The other is Apple Intelligence focused on enhancing what most of us are already getting from Apple- handling our emails, messages, calendar, browser, pictures, etc.-even better than what they have been doing for us already. It’s likely that Apple Intelligence will even take their relationship one step further- reaching out to third party apps and services beyond devices to make our lives easier and better.

For many of us, our iPhone is the first device we see in the morning and the last device we see before we go to sleep. Enhancing the current Apple experience with Apple Intelligence would seem to have no downsides or concerns that the uncertainty and timing of AI has brought us. Rather, Apple has just brought us to its next chapter in making life easier, friendlier and more reliable than ever for us. We’ll be able to take emojis to a whole new level, search photos and videos easier, have better Siri, have ChatGPT and more.

I am looking forward to upgrading my iPhone 14 to an iPhone 15 Pro or iPhone16 with Apple Intelligence in September. I can’t wait.

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