Apple watchers gained several useful pieces of information during the company’s Thursday earnings call for Q3 2023. Sales of iPhones, iPads, and Macs were down year on year, for example, yet overall profit was up thanks to bigger margins. And the Services category had a stellar quarter, thanks in part to Apple passing a billion paid subscriptions on an install base of two billion devices.
Another interesting tidbit, however, cropped up during the question-and-answer session with analysts that followed the official announcements, which you can listen to on Apple’s website. (The part I’m going to talk about begins at 51:44.) Late on in the session, the executives were posed a question about AI by Sydney Ho, a Deutsche Bank analyst, and Tim Cook was insistent that the technology remains a strong priority for the company.
*__Ho: __Your strategy on AI seems quite different than many of your peers\. At least, you don’t talk much about that, about how much you invest in it\. Maybe you can elaborate a bit on that\. But, related to that, how do you see your investment in this area turning into financial performance in the future? \[…\]*
Cook: We view AI and machine learning as core, fundamental technologies that are integral to virtually every product that we build. [At] WWDC in June, we announced some features that will be coming in iOS 17 this fall like Personal Voice and Live Voicemail. Previously we had announced life-saving features like fall detection and crash detection and ECG. None of these features that I just mentioned–and many, many more–would be possible without AI and machine learning. So it’s absolutely critical to us.
And of course we’ve been doing research across a wide range of AI technologies, including generative AI, for years. We’re going to continue investing, and innovating, and responsibly advancing our products with these technologies, with the goal of enriching people’s lives. That’s what it’s all about for us. As you know, we tend to announce things as they come to market, that’s our M.O., and I’d like to stick to that.
It’s striking, in comparison with some previous answers from both Cook and CFO Luca Maestri in the same call, how smoothly articulate Cook is on this subject: that line about “responsibly advancing our products with these technologies, with the goal of enriching people’s lives” sounds highly rehearsed. It’s evident that this is something to which he has given a great deal of thought.
Then again, it might simply be that he gets asked about it so often. In a Reuters interview Friday he talked about AI in virtually identical words, merely adding an extra sentence acknowledging that AI research was significant enough to be showing up in R&D spending. Similarly, in comments to CNBC (via 9to5Mac) Cook largely repeated his thoughts on AI and machine learning being “fundamental core technologies” that are “embedded in every product that we build.” Contrary to Ho’s premise, Apple actually talks about AI a lot, albeit usually in guarded terms and at the persistent prompting of analysts and journalists.
Readers could be forgiven for thinking that AI has become the latest in a long line of essentially meaningless corporate buzzwords, and it would be natural for Cook to prepare a few soundbites on such a hot-button topic. But there remains the sense that Apple hasn’t yet lived up to the AI enthusiasm that it professes so frequently; that AI is indeed present in almost all Apple products, but remains peripheral rather than integral.
And, most strikingly for the average Apple customer, the company hasn’t yet unveiled the major, flagship AI project that has felt imminent for a long time. AI-powered features in OS updates are one thing, but many of us long for Apple to build a full-on AI product: Siri 2.0, aka Project Bobcat, or SiriGPT.