🍎 Apple Surges 10% on AI Annoucements

Will AI be enough to save Apple from the iPhone Slump?

🍎 Apple Surges 10% on AI Annoucements - Will AI Reverse the iPhone Slump?

📈 It was a big week for Blossom’s biggest tech stock, with Apple jumping 10% on the announcement of Apple Intelligence - the latest installment to the big-tech AI franchise.

👏 This was a much-needed win for Apple investors, who’ve watched the stock get beaten down this year while the rest of big tech has surged.

So let’s unpack what Apple Intelligence really is and whether this return to glory is warranted or all hype…

🤖 Siri gets a make-over featuring a shiny ChatGPT integration

Remember Siri? The digital assistant Apple launched in 2011 which somehow hasn’t gotten better in the past 13 years? 🤣

Well an upgrade has FINALLY come in the form of… you guessed it… ChatGPT!

Apple has integrated Siri with LLMs (large language models) to help it better understand what you’re saying, and to determine ‘if your query would be better suited for ChatGPT.’

Perhaps the coolest part of the new Siri is its integration with Apple’s apps, meaning Siri can be used to:

  • 📧 Find information inside a particular email

  • 📸 Surface a photo of one of your friends

  • 📝 Ask questions related to your docs or PDFs

  • And much more!

According to Apple, this is just the beginning, with plans to make Siri capable of ‘onscreen awareness’ and have the ability to take action in and across apps, like finding your license plate number from a photo and entering it into a website for you!

The new Siri will be a prominent part of new Apple devices, with a new icon and even a ‘glowing indicator light’ around the edges of a device’s screen.

💡 Interestingly, Apple isn’t paying OpenAI for the use of it’s chatbot. Apple believes pushing OpenAI’s brand and technology to hundreds of millions of its devices is of equal or greater value than monetary payments.

🎨 Genmoji, AI Image Editing, and more

While Siri is the most significant AI update from Apple’s announcements, there were a few extras Apple announced as icing on the cake:

  • 🦖 Genmoji: create a custom emoji based on a text prompt in the new AI Image Playground.

  • 🖌️ AI photo editing: remove unwanted people and objects from pics with Apple’s new Clean Up tool.

  • ✍️ Transcribed calls: transcribe what’s said during a call and get a summary of the key points in the Notes app.

📈 Why the massive jump in stock price?

Last month Apple reported earnings, and the headline was grim: iPhone sales are struggling, with Apple posting the worst quarterly iPhone sales decline since the pandemic. Since the iPhone accounts for ~60% of Apple’s revenue - this is a big problem.

Many believe this decline was driven by a general lack of innovation between iPhone models, with the iPhone 15 models (released Sept 2023) offering very few tangible benefits compared to the 14 models.

Apple hopes to change this with AI. To take advantage of Apple Intelligence, you’ll need an iPhone 15 Pro or above. Many analysts believe this will be enough to drive consumers to upgrade, with some going as far as predicting an ‘iPhone super cycle’:

Restricting Apple Intelligence to iPhones sold within the last year adds to our conviction that AI can help kick off an iPhone super cycle.

Evercore Analyst

I’d tend to agree. This feels like the first real upgrade to the iPhone in a long time, and if iPhone can deliver on some of these promises, I’d strongly consider upgrading to take advantage.

💡 Apple ranked as the #4 Most Sold stock of the week and only the #6 Most Bought on Blossom

🤖 What does this mean for AI more broadly?

Apple insists that “it has different approach to AI than its rivals” by focusing on the devices it sells and the unique personal data that it’s AI can use. While that may sound a bit fluffy, its actually quite interesting.

AI to date has focused on building a single, power-hungry AI model. Apple instead focuses on just using the powerful model when the phone can’t perform the task - allowing much lower computing power and memory since it only uses AI when needed.

Apple will also no doubt bring significant advancements to privacy in the world of AI. For example, Apple has already developed its own Apple Private Cloud preventing user data sent back to an AI server from being stored or re-used.

"If you look at the signal away from the noise, you realize that this is unprecedented capability that Apple is going to introduce, and it's going to integrate AI into everyday life"

D.A. Davidson Managing Director Gil Luria

🤔 Hype or the real deal?

Many times when I’m discussing AI, I’ll include a section about whether AI is a bubble, and while there are certainly many wild examples of AI fueling wild investor hype with no substance (like the Rabbit R1) - in my opinion, Apple actually really delivered here.

The true test for Apple is whether the features will be enough to drive a significant percentage of consumers to upgrade their iPhones, and personally, I think they will.

👇 What does the community think? Cast your vote in my poll on Blossom!

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🎙️ Top Discussions this Week

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