In a world where artificial intelligence (AI) is revolutionizing industries, Apple’s strategy in this field is under intense scrutiny. Unlike competitors like Google and Microsoft, which have aggressively advanced AI adoption, Apple has taken an approach … more cautious and focused on privacy. This article explores whether Apple has arrived late to the AI race or whether its slow strategy could be advantageous in the long term, evaluating the perspectives of industry experts.
Enrique Dans, professor at IE University, emphasizes that Apple’s biggest challenge is not the timing of its foray into AI, but the availability of data to work with. Apple has prioritized privacy, a strategy that has limited its ability to collect data compared to giants like Google and Meta. This decision, while valuable for Apple’s privacy image, has made it difficult to attract machine learning specialists, who need vast amounts of data to develop efficient models.
The Apple privacy policy It implies that its AI models must be smaller and less dependent on large volumes of data, unlike the massive models used by its competitors. This strategy could be effective in everyday scenarios where efficiency and privacy are essential, but it could limit Apple’s ability to compete in certain areas of generative AI. In this sense, the Cupertino company has focused its efforts on developing systems that operate on the user’s own device, thus avoiding data storage in the cloud and guaranteeing privacy. This decision has led Apple to develop its own hardware infrastructure, such as Apple Silicon processors, that support these capabilities.
The apple firm’s shares have experienced an increase of 14% in the last year, a modest figure compared to the explosive growth of Nvidia (more than 200%) and the significant increases of Microsoft and Alphabet (Google) with a 33% and 46% respectively. These companies have integrated their AI innovations more visibly, boosting their market valuations.
Saturation
Even so, Apple shares are currently above $187, a record price. XTB attributes Apple’s recent all-time high to optimism generated by the new AI-related features announced in its latest operating system. However, continued dependence on the iPhone, which accounts for 53% of its revenue, poses a challenge. iPhone sales have grown just 2% on average over the past two years, indicating market saturation that Apple needs to address with innovation in other technology segments.
The optimism around Apple is also reflected in the assessment of its AI strategy. Unlike Google and Microsoft, which have deployed advanced chatbots like Bard and ChatGPT, Apple has chosen to integrate AI more discretely into its existing products, such as Siri and Core ML’s machine learning capabilities. This approach has allowed Apple to maintain its reputation for privacy and security, crucial aspects in a world increasingly concerned about the protection of personal data.
Sandra García, CEO of Dekalabs, maintains that Apple is not late to the AI race. Her slow, meticulous approach, focused on privacy and user experience, could prove advantageous in the long run, she says. Apple continues to excel in design and usability, and AI complements its business without being disruptive, reinforcing the relevance of its high-performance hardware. García suggests that AI can be a crucial catalyst in areas such as financial services, digital health and augmented/virtual reality, powering personalized experiences and creating innovative products.
In comparison, Verónica Ferrer, professor of big data and analytics at EAE Business School, highlights that Google and Microsoft have integrated AI more deeply and visibly into their products. Google, with its search engine, Android, and cloud services, and Microsoft, with its Office suite and Azure, have led the adoption of AI. Apple, for its part, has opted for a more reserved strategy, with tools such as Siri, Create ML and Core ML, focused on respecting user privacy. This approach might limit Apple’s ability to compete in the generative AI space, but it also allows it to maintain its security and privacy philosophy.
The firm’s shares have increased by 14% in the last year
Apple’s AI strategy, which excludes 90% of current iPhones due to processing demands, could have significant repercussions on its user base and future sales. Dans points out that this exclusion is not intentional, but a consequence of the technical limitations of older devices. However, this could encourage users to update their devices, benefiting Apple both in sales and in the management of its device fleet. Although this strategy does not reduce dependence on the iPhone, it complements its increasing focus on subscription services, which offer a more stable revenue stream and less susceptible to competition.
Javier Niederleytner, professor at the Institute of Stock Market Studies (IEB), believes that Apple’s loyal clientele minimizes the risk of saturation of the smartphone market. AI offers Apple vast diversification opportunities in financial services, digital health and augmented reality. Niederleytner also believes that although Apple may seem late in the AI race, its significant investment and technological capacity will allow it to compensate for this delay.
According to Verónica Ferrer, Apple’s ability to integrate AI into its ecosystem without compromising user privacy could be a key differentiator. However, the challenge lies in how Apple can use this AI to deliver innovative and competitive experiences against generative AI solutions from Microsoft and Google, which have captured the market’s imagination with their advancements in language models and content generation.
New ways
On the other hand, Sandra García Blasco emphasizes that Apple is positioned to take advantage of AI in emerging areas. Digital health, for example, is a field where Apple has already shown interest with the Apple Watch and its health monitoring capabilities. The integration of AI into these devices could revolutionize personal healthcare, offering more accurate diagnoses and personalized recommendations. In addition, augmented and virtual reality represents another front where Apple’s AI could make a significant difference, enhancing educational, entertainment and professional applications.
«The AI race is likely to be a marathon and not a sprint, so there is still time for Apple to become a contender as the AI landscape continues to evolve,” said Amadeo Alentorn, head of equities at Jupiter AM.
