How Apple wins A.I. 🍎

A strategy on how Apple wins A.I. battle for the consumers hearts and minds.

Apple was the last of the tech giants to launch their new set of products embedding A.I. into the experience. Their late entry garnered a lot of criticism for missing the boat, but it may be the boat they missed is the Titanic.

Let's breakdown why the Apple Strategy could put them ahead of everyone else in the race toward being the defacto A.I. that consumers use in their day to day life.

1. They didn't enter the LLM contest. In hindsight it was actually a good decision. First, it saved them hundreds of millions of dollars and valuable engineering resources only to be undercut by open source models or to be put under the same scrutiny that Google endured for the mishaps in their models responses.

2. They kept their eye on the ball. The bottom line is the only thing that matters to Apple is selling more phones. The benefit of having 50% market share in the U.S. market with the iPhone is they own the consumer channel for any and all tech (along side Google via Android). They are the gatekeeper. So there was no reason to enter the LLM race, when the likely outcome is consumer A.I. would ultimately need be tightly integrated with the phone for it to reach it's full potential. Apples primary objective is to sell more phones, maintain its monopoly and not be sidetracked.

3. Apple is in the midst of launching their M4 chip which has support for A.I. apps and functionality. This clearly demonstrates they do indeed have an A.I. strategy, but it is focused on the edge not at the center of the network. They believe that A.I. processing and most likely the actual models may live on the phone and in the chips they are making. LLMs by default are too big to live and run on the phone, which is why Apple didn't care to invest in building one. Instead, I suspect they will build a small “SLM” that will live on device. I would assume that OpenAI has already agreed to build it and license it at no cost. Since OpenAI will be “behind the scenes”, Apple isn’t threatened (yet) by powering their A.I. with OpenAI.

4. Apple also realizes they have one thing that matters most to consumers especially as we enter this new world.of A.I. - Trust. Every other company that is fighting for their stake on A.I. has trust issues with the consumer. Apple understands their commitment to consumer privacy and security is a competitive advantage. The last thing they wanted to do was abuse that trust when launching their A.I. products prematurely.

5. Apple also sees a world beyond the phone as the only form factor to deliver A.I. to the human race. My guess is Apple is looking at adding many other devices in their ecosystem in the future including eyewear, home devices and of course robots. After all, a robot is just a mobile device with a head, torso, arms and legs. iRobot actually might be a thing. Crazy.

Ultimately when you objectively look at how consumer A.I. will grow in adoption it is less about the model and how many parameters it was trained on, and more about how it deeply and seamlessly integrates into our day to day life in the device we already have in our hand.

In Apples case (and Google), they hold all the cards when it comes to having A.I. in the palm of your hand.