Apple (AAPL, Financial) has been relatively silent on its AI developments compared to peers like Google (GOOG, Financial) and Samsung (SSNLF, Financial), both of whom have been integrating AI into their devices aggressively over the past year. However, following Apple's second-quarter report, the excitement surrounding its Generative AI capabilities has grown, especially given its strong position in the global smartphone market, often competing with Samsung for the top spot.
The buzz around Apple intensified with reports of nearing a partnership with OpenAI (MSFT, Financial), creators of ChatGPT, and discussions with Google about its Gemini AI project. With the upcoming Worldwide Developers Conference (WWDC) where Apple typically previews its new iOS, this year iOS 18, expectations are high for the debut of Generative AI features on iOS devices.
The potential introduction of AI in iOS 18 is not just exciting for current users but could also persuade Android users to switch to Apple, potentially boosting iPhone sales which have seen a slowdown in recent quarters.
- iPhone revenues underperformed in Q2, marking the first miss in nearly a year with a 4% year-over-year drop and a 24% decrease from the previous quarter, largely due to weaker demand in China and stiff competition from Samsung's AI-enhanced Galaxy series.
- iPad sales have also plateaued despite the recent launch of new models after an 18-month gap. The refreshed iPads could rejuvenate interest in Apple’s tablet range, historically a gateway for consumers into Apple's ecosystem.
- On the computing front, Apple highlighted the capabilities of the MacBook’s new M3 chip, designed by Apple and manufactured by Taiwan Semi (TSM, Financial), as a potent AI tool. This could address the needs of MacBook users feeling left out of the AI advancements seen in PC offerings like Microsoft’s AI-powered Copilot app.
While Apple's move to integrate AI into its devices has been anticipated following several hints and discussions in recent months, the confirmation that WWDC will feature AI-driven enhancements has set the stage for potentially game-changing announcements next month.
