The launch of ChatGPT in 2022 demonstrated that AI-powered chatbots can rapidly capture widespread consumer interest.
For Apple, developing a truly intelligent and smoothly interactive voice assistant, capable of performing various tasks on-device via AI models, holds the potential to stimulate consumer upgrades to newer iPhone models.
However, creating such a product does not align with Apple's traditional hardware strengths. A former executive noted, "Apple has a gap in this area. I fully believe that, in terms of hardware alone, they can produce products with outstanding design and top-tier quality. But now, the core of competition has shifted to the 'brain' of the device."
A former employee involved in Siri upgrades added, "Ultimately, Apple is a premier hardware company; its software products are merely passable."
This individual stated that Apple currently lacks the cutting-edge AI models held by its competitors. Simultaneously, the company adheres to its privacy protection principles, preventing it from mining crucial user data to train its models. Earlier this year, Apple entered into a partnership with Google, adopting Google's Gemini model as the technological foundation for its advanced AI features.
Anastasios Angelopoulos, President of the AI model evaluation open platform Arena, explained: To build a smaller model capable of running locally on devices like the iPhone, one must start with a large model. "Begin with a state-of-the-art large model, then progressively distill it, ultimately obtaining a small model with around 3 billion parameters, performing nearly as well as the original large model."
John Ternus, now leading Apple's AI team, faces intense industry competition. This team, like the design team, suffers from significant talent attrition. The company's chief software interface designer, Alan Dye, also departed in December of last year.
Meta and OpenAI Research are among the most active in poaching talent. Both are focusing on developing AI consumer hardware, directly competing with Apple, and aiming for comprehensive control over the artificial intelligence ecosystem—a business philosophy pioneered by Steve Jobs in earlier years.
Apple's Worldwide Developers Conference is scheduled for June 8, where Tim Cook is expected to introduce the repeatedly delayed AI-enhanced Siri. Part of his motivation is to provide Ternus with a major AI feature to coincide with the launch of the foldable iPhone slated for September.
However, Morgan Stanley analyst Erik Woodring believes that, due to Apple's choice to partner with Google, Siri's AI capabilities will be significantly constrained by the limitations of the Gemini model. "The core question is no longer 'Do you have your own proprietary model to support your AI strategy?'"
Woodring also stated that Apple needs to develop one to three core, practical features for this AI voice assistant. The appeal must be strong enough to incentivize existing users to upgrade their devices. Apple's long-term goal is to explore a clear path, following the iCloud monetization model, to open new revenue streams based on AI software.
The soon-to-retire Cook is also paving the way for his successor, allowing for increased investment in talent acquisition and AI research and development. Apple is currently expanding its workforce and, last month, abandoned its long-standing strategy of maintaining a balance between cash and debt. For the fiscal year ending in March, the company's R&D expenditure reached $40 billion, a year-on-year increase of approximately 23%.
Several senior executives are approaching retirement, and Ternus will also be authorized to restructure the executive team according to his own vision.
A former colleague remarked, "If I were John [Ternus], I would think about how to assemble a team that is bold, ambitious, and visionary, recapturing the spirit of the company's early startup days."
In a sense, Ternus will also continue the groundwork laid by Jobs. A former executive recalled, "When Jobs acquired Siri in 2010, someone asked him why he was venturing into the search field."
"He responded roughly like this: I'm not aiming to do search; I'm aiming to position for artificial intelligence."
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