Source: Gelonghui

The AI community is still in full swing, and tech giants are racing to the horse racing field.$Apple (AAPL.US)$Although it is one step “late,” they are constantly catching up with this craze.

Following previous reports that the iPhone plans to embed Google's Gemini model, it has recently been revealed that Apple wants to develop its own large-scale language model for the device.

After a ten-year dream of building a car shattered, Apple's determination to step into AI seems to have become more and more determined.

Last week,$NVIDIA (NVDA.US)$Leading the collapse of technology stocks across the board, Apple did not resist. As one of the “Big Seven” US stocks, Apple's stock price has declined unabated since the beginning of the year, with a cumulative decline of more than 11%.

Reinvigorating the iPhone's “power” and finding the next revolutionary product

The reason behind the weak stock price and the continuous decline in market value is that Apple's flagship products are no longer sellable.

According to the latest data released by IDC, iPhone sales fell nearly 10% year on year in the first quarter of 2024, and the leading position in the global smartphone market was replaced by Samsung.

With the further recovery of the market, IDC also anticipates that Android phones will grow far faster than Apple this year.

Sales are “Waterloo,” and the market position is difficult to guarantee.

In order to “revive” the iPhone and find the next revolutionary product, Apple jumped headlong into the AI wave.

According to a recent report by tech journalist Mark Gurman, Apple is developing a large-scale language model (LLM) running on the device side to improve the responsiveness and privacy protection capabilities of upcoming generative AI functions.

In the article, he said that Apple's next big thing: large-scale language models on devices. Apple's LLM will be the foundation for the company's future generative artificial intelligence capabilities.

However, since it runs on the device, Apple's AI tool may be inferior to competitors that run directly in the cloud in some cases, but the way it implements this technology may still be a game changer.

At the same time, Gulman also pointed out that Apple can bridge this gap by authorizing the use of technology from other AI service providers such as Google.

According to reports, Apple's artificial intelligence technology marketing strategy will focus on how it can actually help users improve their daily life efficiency, rather than simply emphasizing the powerful performance of the technology itself.

Earlier, Gulman had broken the news that Apple is exploring some “next big thing” projects, including augmented reality glasses and personal robots.

In addition, Apple also plans to embed Google's Gemini artificial intelligence engine into the iPhone.

People familiar with the matter revealed that the two companies were actively negotiating earlier to allow Apple to authorize Google to generate an artificial intelligence model Gemini to power some of the new features of the iPhone software this year. Also, Apple recently had discussions with OpenAI and is considering using its model.

However, Apple has never responded positively to these news.

The market anticipates that more details of Apple's artificial intelligence strategy will be announced at the WWDC conference in June, when the company will also present its major software update plans.

The way out

It is worth noting that Apple is expected to release its latest quarterly earnings report on May 2.

The market generally expects its performance to decline again.

Wall Street expects iPhone sales to drop again, which will reduce overall revenue by about 5%, the fifth decline in the past six quarters.

It's an indisputable fact: the pace of iPhone upgrades has slowed down in recent years.

Since the launch of the iPhone 12 in 2020, Apple's flagship product hasn't changed much. And before that, there weren't any major upgrades since 2017.

Regarding Apple's way out, Gulman said that since no major new product categories have been launched recently, one option Apple faces is to produce a cheaper version of the iPhone and re-enter emerging markets.

Additionally, for Apple's stock price, Bernstein gave Apple a rating “consistent with the market” and set a target price of $195 for the stock.

Recently, Apple has made numerous reviews, acquisitions, hires, and investments in building artificial intelligence, but has yet to release any new artificial intelligence products.

Although many people expect Apple to release major news at the June Global Developers Conference, Bernstein analysts expect Apple to wait until the iPhone 16 in September to announce artificial intelligence features.

“We expect most of the artificial intelligence features to be released with the iPhone in September, rather than at the global developer conference, like other key software features, such as Smart Island, Siri, and Facetime, all of which will be launched when the phone is released. We think the timeline for AI features such as multi-mode Siri and AI health coaching isn't clear.”

Bernstein expects the iPhone 16 to offer at least artificial intelligence features similar to the Pixel 8 and Galaxy 24. Other possible AI integrations include Apple Music, Xcode, Pages, and Keynote.

“Although Apple is developing its own Big Language Model (LLM), codenamed Ajax, the company is also in negotiations with potential partners such as Google, OpenAI, and Baidu to use an external big language model.”

Bernstein also pointed out the three main ways Apple uses artificial intelligence to make money.

These measures include enabling artificial intelligence on its iconic iPhone, getting AI searches through ads, and charging commissions for AI apps.

Editor/jayden