Samsung released the Galaxy S24 series, OPPO's first 7 billion device-side large-model phone Find X7 series went on sale, and Xiaomi launched the Xiaomi 14 Ultra equipped with the first AI large-scale computational photography platform...... In the face of the surging wave of AI, Apple seems to be a little out of breath - the termination of the 10-year car manufacturing project, the release of the multi-modal large model MM1, the acquisition of AI star startup Darwin AI, and the iPhone 16 equipped with generative AI technology will be unveiled this year...... In 2024, Apple will be "All in AI phones".
Why is Apple no longer calm?
Since the release of the original iPhone in 2007, Apple has always been able to calmly face the "equipment competition" of competitors in the hardware track of cameras, chips, folding screens, etc., and continue to maintain the sales advantage of iPhone products. In 2023, iPhone sales reached a record $203 billion, accounting for half of the global smartphone market's revenue for the first time.
苹果手机务必"All in AI"
Samsung launches Galaxy S24 series phones equipped with on-device AI capabilities (Source: Samsung)
2024 is regarded as the first year of AI mobile phones, and many mobile phone manufacturers have made great efforts: Samsung released the AI flagship mobile phone Galaxy S24 series, OPPO's first 7 billion device-side large model mobile phone Find X7 series went on sale, and Xiaomi officially announced the first mobile phone Xiaomi 14 Ultra with an AI large model computational photography platform......
In the face of the surging wave of AI mobile phones, Apple seems to be a little out of breath.
In a rare surprise at a shareholder communications meeting in February, Cook revealed that the company is actively developing generative AI software features, with some cutting-edge generative AI features likely limited to iPhone 16 models, which will be available to customers "later this year." In March, Apple became more and more eager to chase AI - stopping the 10-year layout of car projects with an investment of more than $10 billion, announcing the multi-modal large model MM1 with 30 billion parameters, and acquiring the AI star company Darwin AI. Cook, who recently returned to China, reiterated that Apple's own generative AI technology will be launched this year.
Why is Apple no longer calm?
Founder Steve Jobs opened the smartphone 1.0 era with the original iPhone, laying the foundation for the iPhone to enjoy 17 years of dividends. In 2024, smartphones seem to have entered a key competition point - the smartphone 2.0 era opened by AI phones.
"AI will drive all hardware changes, including mobile phones. An Xiaopeng, vice president of Alibaba Research Institute, said in an interview with a reporter from China Electronics News. Several market research agencies expect generative AI phones to grow rapidly in the coming years – 5% of smartphone shipments will be AI phones in 2024 and 45% by 2027.
Global AI handset shipment forecast
苹果手机务必"All in AI"
Data source: Canalys "From the perspective of the development stage of the industry, AI mobile phones will become the third stage of the mobile phone industry after feature phones and smartphones. Chen Yongming, founder of OPPO, believes that in the next five years, the impact of AI on the mobile phone industry will be comparable to that of smartphones replacing feature phones.
苹果手机务必"All in AI"
Zhou Hongyi predicted: mobile phone manufacturers that do not turn to AI will become the next "Nokia"
"Why did Apple stop building cars, because Cook was afraid that the car hadn't been built yet, and the [smartphone] base camp had been turned upside down. Zhou Hongyi, CEO of 360 Group, said, "It has been almost 20 years since Steve Jobs released the first iPhone in 2007, and the large-scale model will define the 2.0 era of smart phones after adding smartphones." In his opinion, any manufacturer that does not develop AI mobile phones will follow in the footsteps of "Nokia's insistence that feature phones are finally eliminated by the times", and Apple is no exception.
All in AI是苹果的必答题
In the 17 years since its birth, the iPhone has gradually become the vane of the smartphone industry, and it is also the soul product of Apple and the most profitable product. In terms of revenue capacity, the iPhone business has maintained more than 40% of Apple's total revenue - the latest financial report in February this year showed that iPhone revenue in the fourth quarter of 2023 was $69.7 billion, accounting for about 58.3% of total revenue. The importance of the iPhone to Apple cannot be overstated.
"Apple invested $10 billion in car manufacturing, but in the end it was just a bamboo basket for nothing; in the field of mobile phones, which is related to Apple's lifeblood, I think Apple is willing to spend $100 billion or even $1,000 billion to invest in AI mobile phones. Some industry experts judge that if Apple gives up chasing AI, it will be pried open by AI to open up its proud closed ecology - affecting its product form, software revenue, and brand image, and then severely damaging its business revenue performance.
"At present, the definition of 'AI mobile phone' on the market is a mobile phone that can be equipped with a large AI model, which is only the initial form of AI mobile phone, and it cannot have much impact on the iPhone - when a 'real AI mobile phone' that can perceive, record, and analyze user behavior and potential decisions comes out, the improvement of its experience will cause a heavy blow to non-AI mobile phones. Zhong Xiang, a researcher at the Future Industry Research Center, said in an interview with China Electronics News.
Zhong Xiang further explained that AI mobile phones have the ability to continuously learn and evolve, and can continuously optimize their own functions and services according to users' usage habits and feedback. "It will 'know' that I'm tired and sleepy from overtime, but I have to get work done, and through long-term data accumulation and behavior analysis, the AI phone will learn what I like to drink and automatically order a cup of coffee to be delivered to my office. ”
"When Samsung, Xiaomi, OPPO, and vivo's AI phones have evolved to have the ability to be personal assistants, who would want to pay for Siri with a 10-second delay in voice interactions?" — a brutal question that both consumers and Apple executives have to answer.
The surging wave of AI will not only "roll" away the iPhone hardware revenue, but also pry open the closed ecosystem that Apple is proud of.
"At present, the app store has become the standard configuration of smartphones, and there may not be a single APP in AI mobile phones in the future. Zhou Hongyi predicted. He explained for example that when there is an AI assistant that truly understands you, which can intelligently break down your passwords and finally complete the tasks you assign, the user no longer has to actively trigger the functions of the app, and the app will even disappear.
An Xiaopeng also believes that in the era of AI mobile phones, the process of people using mobile phones to book air tickets has been greatly optimized - users only need to say to their mobile phones: help me book the cheapest ticket from Beijing to Hangzhou tomorrow afternoon, it doesn't matter what time it is. The mobile phone will directly pop up the selected ticket options according to your instructions, and you only need to press the "confirm" button to pay for the ticket according to the reserved payment information, without using the APP.
苹果手机务必"All in AI"
Cook announced that IOS18 will reflect Apple's generative AI technology (Image source: Apple's official website)
The AI capabilities of AI mobile phones not only pose a fatal threat to APP operating companies, but also seriously affect the revenue of Apple's software services business segment - "Apple tax". In Apple's system, users need to pay in the closed Apple Pay system whether they download a paid APP in the App Store, or purchase game props or subscribe to members in the APP, and Apple will leave a "toll" ranging from 12% ~ 27%. According to the latest results released on Apple's official website: in 2022, Apple's App Store will record 1.1 trillion US dollars (about 7.8 trillion yuan) of developer business and sales, of which nearly 10% - about 110 billion US dollars of revenue will flow into Apple as an "Apple tax".
Not only that, Wall Street investment banks believe that the software services business segment is also responsible for Apple's second growth curve. According to market research firm Counterpoint Research, service products will be Apple's fastest-growing business, with revenue reaching $100 billion by 2025, accounting for about a quarter of the company's total revenue.
"Giving up the pursuit of AI, Apple's core business (iPhone) and the second growth curve (software services) will face potential impacts. I don't think Cook, the board of directors, or the shareholders will allow such a choice to affect Apple's future. Zhong Xiang said. He believes that the negative impact of rejecting AI is not only iPhone sales and Apple taxes, but also many derivative effects. Therefore, All in AI is a must-answer question for Apple, not a multiple-choice question. Zhong Xiang judged.
Can Apple be a latecomer?
Although Samsung, Xiaomi, OPPO, and vivo took the lead in beating the war drums of "AI mobile phones" and taking the lead, because AI mobile phones are still in the early stage of development, Apple, which is temporarily lagging behind, has not completely fallen behind. Self-developed chips, huge user accumulation and huge financial support give Apple the ability to catch up.
Hou Lin, senior analyst of the mobile phone category of GfK China's technology division, said in an interview with a reporter from China Electronics News that AI technology is still in the initial stage of development, and the current AI model carried by mobile phones can only complete some basic tasks. The integration of AI and mobile phones is also in its infancy, and most of the current functions of mobile phones rely on APPs to achieve, and higher-level functions such as APP and mobile phone AI capabilities are still difficult to achieve in a short period of time.
"The wave of large-scale replacement driven by AI mobile phones is expected to be realized in the next 3-5 years, which requires the maturity of several capabilities, one is that mature large models can significantly improve the use experience of consumers, the second is that AI chips and computing power are more mature, and the third is that the number and types of large models are more diverse. Zhang You, a researcher at Shenzhen Zhongwei Zhiyan Consulting Co., Ltd., said in an interview with a reporter from China Electronics News, "It is difficult to say that Apple has fallen behind in the short term, because it not only has sufficient technical development capabilities and teams, but also has strong cash flow reserves, which can support its rapid advancement of AI mobile phone research and development projects." ”
In fact, Apple is advancing at an astonishing rate in terms of AI technology, AI models, and hardware. In terms of AI capabilities, in March, Apple acquired Canadian artificial intelligence startup DarwinAI, one of its core technologies is to make AI systems smaller and faster, and this technology can help Apple deploy and run AI on mobile devices. In addition, the latest report released by market research agency Stocklytics shows that Apple will acquire a total of 32 AI companies in 2023, far exceeding the number of acquisitions by technology companies such as Microsoft and Meta last year.
苹果手机务必"All in AI"
Apple's R&D team released a paper announcing the multimodal large model MM1 for the first time
In terms of AI large models, Apple has just announced the multi-modal large model MM1 with the highest number of parameters of 30 billion. In addition, Apple has built a large language model framework "Ajax" and has also jointly developed Ferret, a multimodal AI model, with Cornell University.
In addition, the reporter learned from people familiar with the matter that Baidu may provide AI functions for Apple's iPhone16, Mac system and IOS18 released this year, the cooperation is only for the use of the national version of the iPhone and Apple hardware devices, and overseas Apple hardware devices will use its self-developed AI model.
Industry experts point out that the huge number of iPhone users and Siri's decade-long user corpus and habit data are a valuable asset, which will provide more specific and rich training data for Apple to advance its generative AI project. According to the latest forecast released by market research firm CCS Insight, the number of active iPhone devices in the world will exceed 1.3 billion by the end of 2023.
In terms of hardware, An Xiaopeng told the "China Electronics News" reporter that AI mobile phones need the transformation of chips - mobile phone chips in addition to CPUs should also be supplemented by AI chips to assist in processing image models and the operation of end-side large models, and he believes that there will be more GPU chip functions embedded in AI mobile phones.
"Apple's latest CPU architecture has connected the video memory and computer memory, so that when loading a large model, all the memory can be used as video memory for the large model. Zhou Hongyi believes that Apple's self-developed chip strategy will also help it occupy a favorable position in the battle for AI mobile phones.
