Technology

Apple's new features and strategic partnerships

Under pressure to deliver new features, Apple presents an AI system that supports users in various ways – with a focus on privacy.

Eulerpool News Jun 11, 2024, 2:16 PM

Apple introduced its latest innovation, "Apple Intelligence," during the Worldwide Developers Conference on Monday. This system update brings a personalized version of generative artificial intelligence (AI) to Apple devices and aims to offer users a variety of support.

The new AI platform, which will be integrated across all Apple devices, promises comprehensive features. The software can retrieve information from various apps, search personal data to correct texts, call up photos of family members, or analyze traffic patterns for unusual commutes. Users can also create images and emojis, and even transform rough sketches into detailed diagrams.

An updated Siri voice assistant will be able to better understand natural language, process contextual information, and perform actions within apps. Developers can use new tools to integrate AI systems and showcase new products in the App Store.

Data Protection is Central to Apple's New AI Features. Most processing is done on the device itself to protect user data. For more extensive AI models, Apple will process the data on its own servers using the "Private Cloud Compute" concept. Only relevant data for the specific task is sent and is not stored or used for further training.

The announcements come at a time when Apple is facing challenges such as declining sales in China and regulatory scrutiny from a U.S. antitrust case and a new European law, both targeting the management of third-party software.

Investors hope that the new announcements will boost the stock price. "It is important that they show progress," said Charles Rinehart, Chief Investment Officer at Johnson Investment Counsel, an Apple investor.

Additional AI features include the ability to replicate a user's handwriting style on iPads, allowing users to draw equations that the software can solve. In the Safari web browser, an AI feature will highlight and summarize relevant information on a page.

Apple has been looking for ways to integrate generative AI into its products in recent years. Apple's stock has risen by about 8% over the past year, while Microsoft's grew by about 26% and Google's by 41%. Nvidia, the main chip supplier in the AI sector, recently reached a market valuation of $3 trillion, briefly surpassing Apple.

While Apple's research spending grew more slowly last year, CFO Luca Maestri stated during the latest earnings report: "We are driving innovation across all areas and have invested more than $100 billion in research and development over the past five years.

Apple hopes to boost iPhone sales with new AI features, which have largely stagnated over the past two years and fell by more than 10% in the last March quarter. Investors and analysts believe that new AI features, especially those that only work with new or high-end iPhone models, could drive sales.

Trip Miller, Managing Partner at Gullane Capital Partners, said: "AI is the thing that can get Apple out of the rut. They are this big giant. It needs a new story to move them in a new direction. AI is this opportunity for them.

Additionally, investors hope for a potential increase in service revenues through the new AI offerings, possibly in the form of a monthly subscription that Apple could charge, or fees that third-party AI developers might impose.

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"By partnering with external developers for advanced AI features, Apple is demonstrating that it is looking for ways to protect itself from some of the risks and costs associated with these generative AI models, said David Wagner, portfolio manager at Aptus Capital Advisors. These new AI systems cost billions of dollars in computing resources and have occasionally fabricated facts or exhibited unexpected behaviors.

Apple also introduced new features for the iPhone operating system iOS 18, which offers more customization in the Control Center and the ability to lock individual apps or store them in a hidden folder. The Maps app will include hiking trails that can be saved offline, and Apple has expanded satellite capabilities so that compatible devices can send regular messages in addition to emergency communications. A new gaming mode minimizes background activities to improve graphics performance, and new photo features offer enhanced filters to reduce clutter in photo libraries.

Apple also demonstrated new AirPod features that allow users to answer calls by nodding or shaking their heads, or to forward the calls to voicemail. The company also showcased improved audio quality for voice calls, even in noisier environments.

The Vision Pro glasses will be launched in eight countries outside the USA, starting in China and other Asian countries later this month. Apple also introduced new password management software that works across devices.

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