AI Revolution Shakes Apple's Dominance (AI Translation)
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文｜财新周刊 刘沛林 杜知航 覃敏
By Caixin Weekly’s Liu Peilin, Du Zhihang, Qin Min
“Siri，妈妈的航班几点到？午饭怎么安排？”用户向iPhone发出语音问询，智能助理Siri马上结合邮件中的航班信息、航班实时动态，说出航班最新到达时间；同时追踪聊天软件中的内容，建议吃饭地点，紧接着还搜索地图，告知从机场到饭店需要多久。
"Siri, what time does Mom's flight arrive? How should we arrange lunch?" A user asks their iPhone through a voice query. The smart assistant Siri quickly cross-references the flight information from emails and real-time flight updates, providing the latest arrival time. Simultaneously, it tracks content from messaging apps to suggest dining locations, and then searches maps to inform how long it will take to get from the airport to the restaurant.
以往，这一系列操作需要用户在邮件、信息、地图等多个App中跳转、查询，如今Siri只需要几秒钟就能完成。这就是苹果（NASDAQ：AAPL）向等待已久的市场给出的AI（人工智能）答卷——融合端侧AI能力的Apple Intelligence，可以打通不同应用，实现文书修改、内容概括、修图、录音转写等功能，并可以通过对智能助理Siri的调用，以工具化形式出现在iPhone、iPad、Mac等苹果终端产品上。
In the past, such operations required users to switch between multiple apps like mail, messaging, and maps to search for information. Now, Siri can accomplish this in just a few seconds. This is Apple's (NASDAQ: AAPL) long-awaited answer to the market's demand for AI (artificial intelligence) solutions—integrating on-device AI capabilities into Apple Intelligence. This technology can seamlessly bridge different applications to handle tasks like document editing, content summarization, photo retouching, and audio transcription. It can be accessed through the intelligent assistant Siri as a utility on iPhone, iPad, Mac, and other Apple devices.
2022年11月，美国科技创新公司OpenAI推出聊天机器人ChatGPT，生成式AI浪潮自此席卷全球，谷歌、微软、Meta、阿里、百度等国内外互联网科技公司竞逐大模型，三星、华为、小米、OPPO等硬件厂商亦纷纷下场，将大模型能力引入手机。一向被视为智能硬件行业风向标的苹果公司却迟迟没有动静，直到2024年初才突然放弃造车、全力押注AI。
In November 2022, American tech innovation company OpenAI launched the chatbot ChatGPT, setting off a generative AI wave that swept across the globe. Internet giants such as Google, Microsoft, Meta, Alibaba, and Baidu, both domestic and international, began competing in the development of large AI models. Hardware manufacturers like Samsung, Huawei, Xiaomi, and OPPO also entered the fray, incorporating large model capabilities into their smartphones. However, Apple Inc., long regarded as a trendsetter in the smart hardware industry, remained conspicuously silent. It wasn’t until early 2024 that Apple abruptly abandoned its car manufacturing ambitions to fully commit to AI.
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- Siri integrates flight and dining information by cross-referencing data from emails, maps, and messaging apps, demonstrating improved on-device AI capabilities across Apple devices.
- Apple has announced a partnership with OpenAI to integrate the GPT-4o model into its devices, raising market concerns about Apple's own AI innovation capabilities and data privacy.
- Apple faces competitive pressure in China and globally due to declining hardware sales, despite efforts to enhance service revenue and AI functions to maintain its market position.
Apple's voice assistant Siri has revolutionized how users interact with their devices by integrating various functionalities like cross-referencing flight information, suggesting dining locations, and calculating travel times [para. 1]. This ability to seamlessly connect different applications represents Apple's foray into integrating on-device AI capabilities through Apple Intelligence, potentially handling tasks like document editing and audio transcription across several devices [para. 2].
The AI landscape witnessed a significant change with OpenAI's release of ChatGPT in November 2022, prompting tech giants like Google, Microsoft, and Alibaba to rapidly invest in AI development. Meanwhile, Apple maintained a low profile until early 2024 when it shifted focus from car manufacturing to AI [para. 3]. Apple's 2024 Worldwide Developers Conference emphasized AI, surprising the market by announcing a collaboration with OpenAI's large language model, GPT-4o [para. 4]. This raised concerns about Apple outsourcing core AI capacities instead of innovating internally [para. 5].
At this developers' conference, many AI features Apple showcased were already available on Android, intensifying market criticism regarding Apple’s ability to remain innovative [para. 5]. Critics also expressed concerns about AI privacy and security following Apple's reliance on OpenAI [para. 6]. Market analysts suggested that Apple's offensive in AI might not immediately enhance iPhone sales due to the prevalent economic conditions and intensified competition [para. 8].
Amidst declining hardware revenue, Apple's introduction of AI seems to be a strategic move to align with market expectations and mitigate financial pressure. Financial reports indicate a 6% decline in hardware revenue for the fiscal year ending in September 2023, with a notable 27% drop in computer sales [para. 8][para. 9]. In China, Apple faced formidable competition from brands like Huawei, where market dynamics saw Apple’s overall shipments fall by 25% year-over-year in the first quarter of 2024 [para. 10].
In light of hardware sales pressure, Apple increased service revenue by 14% in early 2024, benefitting mainly from advertising, the App Store, and cloud services [para. 11]. Yet, regulatory scrutiny globally has challenged Apple's "Apple Tax" model, leading to adjustments and fines [para. 11][para. 12][para. 13]. In Europe, the EU's Digital Markets Act obligated Apple to lower commissions and open third-party app stores [para. 13]. Similarly, the U.S. Department of Justice’s antitrust lawsuit accused Apple of monopolizing the smartphone market [para. 14].
In response to competitive pressures, Apple is focusing on enhancing its AI features. At their developer conference, Apple introduced new AI functionalities integrated with OpenAI’s GPT-4o model, allowing Siri to facilitate more natural interactions and perform tasks across different applications effectively [para. 30]. Despite this, Apple's AI advancements are evaluated as being catch-up moves rather than pioneering innovations, given the existing offerings from competitors like Google and Microsoft [para. 31][para. 33]. The focus on AI is strategic, especially since Apple's partners like Baidu remain unconfirmed, and meaningful market presence in China might be delayed until 2025 [para. 32][para. 34].
Apple's stagnation in the hardware domain was evident when competitors like Samsung launched new AI-equipped models and saw market share increases at Apple's expense [para. 35]. Financially, Apple's revenue in the Chinese market saw significant drops, highlighting the challenge posed by local competitors [para. 10][para. 38]. Apple's subsequent price reductions and promotional efforts in China, although impactful, couldn't sufficiently rekindle sales momentum [para. 40][para. 41][para. 42].
Ultimately, Apple's transition towards a robust AI ecosystem aims not just to reclaim market dominance but to evolve its product integration and consumer experience. The challenge lies in sustaining the momentum amidst regulatory scrutiny and optimizing AI functionalities to stay competitive [para. 43][para. 45]. This strategic adaptation will be critical as Apple navigates a rapidly changing tech landscape marked by fierce competition and evolving consumer expectations.[para. 46]
- Apple Inc.
苹果公司 - Apple Inc. (NASDAQ: AAPL) has integrated AI through Apple Intelligence, partnering with OpenAI's GPT-4o model. Despite showcasing AI capabilities at WWDC24, analysts criticize Apple's reliance on OpenAI and question its AI innovation. Amidst declining hardware revenues and intense competition from Huawei and Samsung, Apple's service sector shows growth, yet "Apple tax" and privacy concerns persist. The company faces significant regulatory and market challenges globally, especially in China.
- OpenAI
OpenAI - OpenAI is a US-based technology innovation company that launched the ChatGPT chatbot in November 2022, sparking a global wave of generative AI. Its GPT-4o model, the most advanced at present, was integrated into iPhone's Siri capabilities by Apple to enhance user experience. Despite concerns over privacy, Apple chose to collaborate with OpenAI to leverage its cutting-edge AI capabilities in their consumer products.
- Tesla Inc.
特斯拉 - Tesla Inc. CEO Elon Musk criticized Apple's decision to embed OpenAI at the system level, considering it a severe security breach. Musk even mentioned that he would ban Apple devices in all his companies due to this collaboration. Tesla and its CEO remain vocal about their concerns regarding data privacy with Apple's embrace of OpenAI.
- Google
谷歌 - According to the article, Google announced on May 15 that it will integrate its self-developed Gemini large model into the Android system. This AI will serve as the core of Android's interaction, assisting with tasks such as image and text search, translation, and real-time video content interpretation. The local model can also recognize call content and detect potential scam calls.
- Microsoft
微软 - The article highlights Microsoft's strategic advantage with its integration of OpenAI's GPT series into a broad range of products, including office software and cloud services. This synergy has driven a considerable increase in Microsoft's market capitalization, which grew by over $1 trillion in 2023, briefly surpassing Apple to become the most valuable company globally by January 2024.
- Meta Platforms, Inc.
Meta - The article mentions Meta Platforms, Inc. as one of the major tech companies competing in the AI space, particularly with large language models (LLMs). Meta, alongside companies like Google, Microsoft, and domestic Chinese tech giants, is actively developing and integrating AI capabilities to stay competitive in the rapidly evolving landscape driven by advancements such as OpenAI's ChatGPT.
- Alibaba
阿里巴巴 - The article primarily focuses on Apple's recent developments in AI and market performance but briefly mentions that Alibaba is among the companies racing to integrate large-scale AI models into their products following the launch of OpenAI’s ChatGPT.
- Baidu
百度 - The article mentions that there are market rumors about Apple collaborating with Baidu's AI model, Wenxin Yiyan, but neither Apple nor Baidu has confirmed this partnership. This speculation arises as Apple explores AI integration to boost its products and stay competitive.
- Samsung
三星 - Samsung, a major competitor of Apple, released its flagship S24 series in January 2024, equipped with AI features powered by Google's Gemini model. By Q1 2024, Samsung's market share in the US increased to 31% from 27% the previous year, marking its highest level since 2020.
- Huawei
华为 - Huawei launched its Mate 60 series in August 2023, followed by the Mate X5, Nova 12 series, and Pura 70 series, shaking up the Chinese smartphone market. In Q1 2024, Huawei's market share surged by 110%, securing a position in the top five smartphone vendors in China. Huawei's return has notably impacted Apple's market presence.
- Xiaomi
小米 - Xiaomi aims to create an independent ecosystem similar to Apple's iOS. In October 2023, they launched the "Surge OS," replacing the 13-year-old Android interface "MIUI." Xiaomi's "Surge OS" is designed to integrate human, vehicle, and home devices seamlessly, part of the company's strategy to unify all ecological scenarios.
- OPPO
OPPO - The article mentions that OPPO is one of the top five smartphone vendors in the Chinese market, competing closely with brands like Huawei, Xiaomi, and Apple. It's included in a list where its market share stands at 15.7%, showing a decline in comparison to its competitors.
- Qualcomm
高通 - According to the article, in the second half of 2023, Qualcomm allied with Android phone manufacturers to implement on-device AI capabilities. This collaboration is part of an industry-wide response to the advancements in generative AI and the increasing integration of AI features in mobile devices.
- MediaTek
联发科 - The article mentions MediaTek in the context of AI competition. In the second half of 2023, MediaTek allied with Qualcomm and Android smartphone manufacturers to implement device-side AI, contributing to the increasing AI functionality in smartphones and challenging Apple's AI advancements.
- NVIDIA Corporation
英伟达 - NVIDIA, a key provider of AI computational power through advanced GPUs, has seen its market value soar amidst the AI boom. From under $1 trillion, its market capitalization surged to $3 trillion over the past year, briefly overtaking Apple on June 5, 2024, to become the world's second most valuable company.
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