CNN —
Apple faces numerous challenges as it prepares to launch perhaps its most important event in years.
The company is widely expected to announce a partnership with ChatGPT developer OpenAI at its annual Worldwide Developers Conference, which starts on Monday, and unveil the first set of generative AI tools to be shipped on its mobile operating system.
The big AI push could help drive iPhone sales and services growth for years to come, as users wait longer to upgrade their devices and an uncertain economic environment weighs on consumers, especially in China. The company also faces regulatory scrutiny in Washington, and was overtaken this week by chipmaker Nvidia to become the second-largest publicly traded company in the U.S.
“We see generative AI as an important opportunity across our entire range of products and believe it is a differentiating advantage,” Apple CEO Tim Cook said during the company's most recent earnings call in early May, adding that the company would have more news to share in the “coming weeks.”
The timing is also noteworthy. Apple isn't always the first to adopt and integrate emerging technologies — the company typically aims to research, develop and perfect new technologies for years before incorporating them into new products — but the speed at which the world is adopting generative AI is perhaps accelerating the company's need to have a smartphone equipped with cutting-edge technology.
Wedbush analyst Dan Ives said the company's push into AI will “break new ground for Apple” and have a lasting impact on its products and services.
Let's take a closer look at what to expect from Apple's big event.
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Siri on older iPhone models
AI, AI and more AI
Apple is expected to dub the AI initiative “Apple Intelligence” and make it opt-in only, and a new report from Bloomberg says it will require an iPhone 15 Pro or a device with the M1 chip or later.
Perhaps the most obvious way Apple could employ generative AI (the much-talked-about artificial intelligence that can provide thoughtful, thorough answers to questions) is through its virtual assistant, Siri, which has had a mixed track record. Integration with OpenAI's latest ChatGPT-4o model could turn Siri's capabilities into an iPhone chatbot, catapulting it into the next few years.
This allows Siri to perform specific tasks, like recalling photos taken on your device years ago, or answering detailed questions about the weather, news, and trivia. Over time, it will even learn your preferences and personality and respond accordingly.
Given that competitors have already introduced generative tools, the iPhone's AI-powered features could also help summarize or draft emails, pop up information on the device's screen with the movement of a finger, and automatically and seamlessly adapt to the user based on voice, audio, natural language, image and contextual cues.
“Generative AI will give the next-generation iPhone a sixth sense, allowing it to scan and interact with the world around it,” Thomas Hasson, an analyst at market research firm Forrester, told CNN.
It could also spark changes across Apple's ecosystem as it incorporates AI into its own apps like Apple Maps, iMovie, iPhoto, etc. Some analysts expect Apple to release tools for brand developers and app makers to create new experiences.
Reece Hayden, a senior analyst at ABI Research, expects demos during the event to highlight how on-device AI adds value, and he also thinks Apple will take the time to outline its long-term vision.
“As AI becomes increasingly fundamental to Apple's overall strategy, there will be an emphasis on future R&D efforts and the expected investments and acquisitions the company makes to support its proposition,” he said.
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Apple plans to partner with OpenAI, the developer of ChatGPT
In the spring, it was reported that Apple was discussing opportunities to partner with OpenAI and Google to bolster its own AI tools, but the company is now believed to have inked a deal with ChatGPT's developers, a partnership that Apple may elaborate on during its keynote address on Monday.
“If OpenAI is going to be driving Apple's AI capabilities, we expect to see a formal partnership announcement, because consumers and businesses want to understand the regulations, the rules, what they're signing up for, and how their data is being used,” Hayden said.
Hayden said the partnership could give the company a much-needed innovation boost, but it could also hinder Apple's control over product development and rules and regulations around data collection and privacy.
Partnering with companies and technologies that haven't yet earned the public's trust could pose risks for Apple in the future. OpenAI continues to face criticism for some of its practices. This week, a group of current and former OpenAI employees called on the artificial intelligence company to be more transparent about the “serious risks” of its AI and to protect employees who raise concerns about the technology the company is building.
The group called on AI companies to foster a “culture of open criticism” that welcomes, rather than punishes, people who raise concerns, especially as regulation struggles to keep up with the rapidly evolving technology.
Focus on privacy and security
Apple has long been focused on consumer privacy and security, and that's likely to be reflected in Monday's announcement.
Companies are aware of the serious risks posed by AI, ranging from manipulation and the spread of misinformation to the possibility of losing control and leading to the extinction of humanity, and many researchers and AI practitioners have expressed the need to educate the public about the risks and safeguards.
Apple will need to address how using this kind of technology affects consumers.
Apple is expected to offer an update to its Vision Pro mixed reality headset, which was announced a year ago this week and launched in February.
During the company's recent earnings call, CEO Tim Cook said that more than half of the Fortune 100 companies have already bought Apple Vision Pro.[We] “We're looking at innovative ways to do things that weren't possible before,” he added.
Generative AI could take headset personalization and immersion to a new level, opening up new use cases for businesses, particularly in education and healthcare.
Tuong Nyggen, a director analyst at market research firm Gartner, said companies interested in headsets “are looking for ways to make money.” [AI]” has been introduced across all product lines.
“Nobody really knows what the winners are yet, so they're now focusing on enterprise, bringing all these use cases together and making the case for why this is the future of experiences and devices,” he said.
The upgrade could also boost sales of the pricier Vision Pro, which starts at $3,499 and has reportedly faced weak demand.
