Besides OpenAI, Apple hopes to have a wider range of AI friends.
On June 23rd, according to sources cited by the media, Facebook's parent company Meta has discussed with Apple to integrate Meta's generative artificial intelligence model into the recently released Apple Intelligence for use in iPhone and other device products. In addition, artificial intelligence startups Anthropic and Perplexity are also discussing cooperation with Apple.
Behind a series of negotiation actions, the signal released is that Apple wants to avoid excessive reliance on any AI company. At the just concluded WWDC, Apple only spent two minutes introducing its cooperation with OpenAI. According to media reports, Apple has confirmed that it will integrate the Google Gemini model in the future. Similarly, OpenAI's partners are not only Apple, but also Microsoft, which has been competing with Apple for decades, indicating that in the era of artificial intelligence, it is unlikely for major technology companies to form a truly stable "alliance".
Technology giants combine vertically and horizontally
Technology companies each have their own abacus. The collaboration between Apple and Meta also demonstrates the powerful magic of AI, which can alleviate the tense relationship between social media giants and iPhone manufacturers.
In the competition for AI big models, Meta wants to surpass OpenAI by launching its big language model Llama 2 in July 2023 and the open source big model Llama 3 in April this year. According to the official introduction, this version is divided into two models, one is the Llama 3 8B with 8 billion parameters, and the other is the Llama 3 70B with 70 billion parameters. Meta CEO Zuckerberg stated at the time that Meta's generative AI capabilities were the most powerful among free products.
From its past development history, Meta has always regarded Apple as a strong competitor. In 2021, Apple's privacy policy modification on its mobile devices led to a sharp decline in revenue. When releasing its financial reports for the fourth quarter and full year of 2021, Meta stated that due to restrictions imposed by Apple's new privacy policy, the company will miss out on $10 billion. In addition, there is also a competitive relationship between the two companies in the VR/AR field.
For Apple and AI companies, the "sharing" method after reaching a cooperation is also worth paying attention to. The report cites sources familiar with the situation, stating that during negotiations with AI companies, Apple did not seek any compensation from either party. On the contrary, AI companies can sell premium subscriptions to their services through Apple's Apple Intelligence, just like Apple did in its App Store, where Apple will share a portion of its device subscription revenue, but discussions have not yet been finalized.
According to Bloomberg reporter Mark Gurman, who has been tracking Apple for a long time, the initial cooperation between Apple and OpenAI did not involve monetary transactions. Apple will not pay cooperation fees to OpenAI, but will promote the OpenAI brand and technology through Apple's distribution system. OpenAI and Apple can generate revenue by converting free users into paid accounts.
Gene Munster predicts that 10% to 20% of Apple users will choose to pay to subscribe to AI products like ChatGPT, which means AI companies that successfully integrate with Apple will receive billions of dollars.
However, Gene Munster, senior Apple analyst and managing partner at Deepwater Asset Management, stated that although ChatGPT usage is expected to double after partnering with Apple, OpenAI's infrastructure costs are also expected to increase by 30% to 40%.
Apple AI still needs to answer many questions
Apple's AI journey is not always smooth, and Apple Intelligence currently does not support its use in another major market, the European Union.
On June 21st local time, Apple publicly stated that when the upcoming iOS 18 and macOS Sequoia are released this autumn, EU users will not be able to use the relevant AI features. Apple attributed this to the EU's antitrust law, the Digital Markets Act.
Apple said in a statement, "We are concerned that the interoperability requirements of the Digital Markets Act may compromise product integrity and endanger user privacy and data security." In response, the European Commission stated, "We welcome gatekeepers (i.e. large technology platforms represented by Apple) to provide services in Europe, provided they comply with our regulations aimed at ensuring fair competition."
Previously, Margaret Vestag, the then European Commission's Commissioner for Competition, had stated in an interview that Apple had issues with compliance with the European Digital Markets Act.
Another hidden danger for Apple is in the Chinese market.
Compared to Chinese smartphone manufacturers such as Huawei, Xiaomi, and Honor, Apple's AI progress has fallen behind. In the first quarter of 2024, in order to maintain the Chinese market, Apple, which has always been proud, began to put down its stance and regain sales by lowering prices. The release of Apple Intelligence has shown the market Apple's attitude, but there is no definite news that Apple has reached cooperation with local Chinese companies.
In contrast, Samsung, which also has a radical attitude towards AI, has already reached cooperation with Chinese companies such as Baidu, Meitu, and WPS. According to media reports, Apple is attempting to engage with AI companies such as Baidu, Alibaba, and startup Baichuan Intelligence, but has not yet reached a final cooperation.
According to the data released by the three major market research institutions, IDC, Canalys, and Counterpoint, Apple's smartphone sales and market share in China for the first quarter of 2024 are all in a downward trend. On the contrary, Huawei's market share has increased.
At the Huawei Developer Conference on June 21st, Huawei released the Pangu Big Model 5.0. Currently, Huawei's intelligent voice assistant Huawei Xiaoyi has mastered trillions of tokens of knowledge, supports 23 types of TOP scenarios, and has a task success rate of 90%. At the press conference, a software industry practitioner told Blue Whale News that the biggest highlight of this event is in the aspect of interaction design. For example, Xiaoyi can convert images with tables into table files to process data, and these improvements are all groundbreaking.
According to Apple's Q2 2024 fiscal year data, the company's revenue in Greater China was $16.372 billion, a year-on-year decrease of 8%. For Apple and all tech giants, the current and future AI is a must answer question.