Apple will seize the ‘AI opportunity’ at WWDC, analyst says

Morgan Stanley analyst Erik Woodring believes this will be the year in which Apple will seize the ‘Edge AI’ opportunity, introducing its take on LLM Generative AI even as the entire computer industry slips toward “AI inside”. It’s probable that Apple’s deployment will be more than skin deep, given the power and performance of Macs and other Apple devices already in use today.

Why this matters to Apple

Woodring makes numerous pertinent points on how Apple will bring this kind of intelligence to market and what that means.

“We believe Apple is one of 6 key companies that will benefit from compute being pushed to “The Edge” to enable new Gen AI-driven features not currently available on consumer devices,” the analyst recently wrote. “We believe Apple’s efforts to bring these features to market are accelerating, increasingly the likelihood of an “AI iPhone” launch as soon as Fall 2024.”

He noted that 49% of Apple’s AI job postings cite Deep Learning experience, while 23% of them seek NLP talent.

Siri 2.0 will be LLM-powered, he says, but points to a “broader Gen AI-enabled operating system,” he thinks will be introduced at WWDC in June. He notes Apple’s recent move to invent a tech to let LLMs work well on devices.

When the tech does see the light of day, the analyst thinks this will boost Apple’s iPhone sales.

The idea behind this being that a Gen AI enabled OS upgrade may accelerate iPhone upgrades in a similar way the first 5G iPhones boosted them. The tech may also accelerate Services spend per user, “which stands at just $8 per month today,” he told clients.

But perhaps the biggest and most important component of the overall plan will be the ability to run AI at the edge. That’s gonna be the golden ticket for Apple, I think.

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