Apple may have a different AI strategy than others, say analysts

Muted WWDC does not imply Apple is behind in the AI race, analysts say, as company focuses on design integration and reliability rather than flashy AI launches

Apple may have disappointed some developers by not coming up with any blockbuster announcements or launches as part of its Worldwide Developers Conference (WWDC) this week, but analysts do not believe that the iPhone maker is lacking in innovation or lagging behind Google, Microsoft and Meta in the artificial intelligence (AI) race.

 

The Cupertino, California-based company has been known to blow away developers and consumers alike for years through this conference and mobile phone launches, but this time it was “a bit grounded,” according to an Indian developer who attended it.

 

One clear disappointment was the lack of an announcement on its AI strategy. Though the company announced ‘Apple Intelligence’, it failed to impress when compared to players like Google and Microsoft.

 

Akshat Srivastava, one of the 50 globally selected winners of Apple’s 2024 Swift Student Challenge, said the launch of a Liquid Glass design language across its software may be the foundation of what the company wants to bring to the forefront next year.

 

While Srivastava says that Apple needs to put forth some innovation and Liquid Glass is “not enough for emphasis”, he points out that the company has probably adopted a different strategy when it comes to embedding AI features in its flagship product.

 

“AI is still not very reliable at this point. Apple is known for doing things later but doing them best. They are now focusing not just on AI but also on the design system update. AI hallucinates a lot, and if you give that to a user, it might just mess things up,” Srivastava told Business Standard.

 

His views echo those of senior Apple executives who defended the company’s strategy on Apple Intelligence and digital assistant Siri. “Steve (Jobs) told us what we have to do is create great products and tell people about them and if we do that, everything else will work out,” the company’s marketing head Greg Joswiak told The Wall Street Journal in an interaction.

 

Navkendar Singh, associate vice president, devices research, India & ANZ, at IDC, believes the lack of AI features in iPhones will not impact sales, especially in India. Apple is still expected to sell about 14.5–15 million iPhones in India in 2025, up from 12.5 million a year earlier. That will place the company among the top five brands in India by the end of this year, with an average selling price that’s three times the market average and at least twice that of Samsung.

 

“Knowing Apple, you can trust them to get things right and drive wider adoption of the product. Also, the lack of AI hasn’t really impacted Apple’s shipments. I think we can trust Apple to define AI for the consumer—by showing that a phone can simply do things better for you,” Singh added.

 

The approach is no different in essence from Apple’s broader strategies: deep integration of technology—Apple Intelligence in this case—into its OS, software and hardware, and then leveraging the developer community.

 

“The spending levels are different because the others want to sell AI models and related services, hence the investment in foundational models. Apple will have to invest more in partnerships that lead to hardware replacement, rather than selling (AI) on its own,” said Ranjit Atwal, senior director analyst at Gartner.

 

Atwal said some of the upsides this year are that future AI capabilities will be integrated into iOS, using on-device processing to enhance security, though it is not straightforward. “The downside is iPhone users may be wondering why Apple Intelligence isn’t available on older phones—should they bother upgrading or just wait? A lot of the demos were in beta and not available this year,” he added.