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Apple WWDC 2024

Apple WWDC 2024

The Six Five team discusses Apple WWDC 2024.

If you are interested in watching the full episode you can check it out here.

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Transcript:

Daniel Newman: So Apple, look, there is way too much to try to talk about in a Six Five. So I want to talk about the big, hairy, audacious conversations. They’re not goals, in this case, of what’s going on at Apple. So the moment the buildup to this thing was that WWDC is going to be the moment that Apple comes out with its ground-breaking, earth-shaking AI strategy. And the question was, all the preamble that I had, the press, the media, the conversations, the background I was doing is what’s going to be success for Apple at this year’s WWDC?

Let me tell you what I thought. What I thought was going to be success was that Apple was going to announce its whole, “We’re going to build the Apple AI LLM. It’s going to be based on our ethos. It’s going to be using our security and privacy. It’s going to be different, better, and if you are in the Apple ecosystem, we are going to be lights out. We are going to be high fidelity. And it’s going to work seamlessly across the Apple ecosystem and it’s going to be the best platform on the planet for developers to build apps.” So that’s a lot. The expectations were high, but remember, they were super duper late coming out. Really, again, this is kind of a two-sided story. Apple’s had AI and its cores for a long time. It’s done AI stuff on its devices for some time, not necessarily all generative stuff. I mean Siri is blown for a long time and that was part of the whole expecting awesome was that Siri needed a refresh and it needed to be awesome.

So, did we get that? Eh. So, as I was reading through the Twitters and I was kind of coming out, I think what we got is two-sided. So I came out and I kind of came out and I’m like, I thought it sucked. I thought the whole thing kind of sucked and I think I had to look at it through two lenses. I want to get to this kind of brief because this could be a long conversation. The two lenses is Tim Cook did the best impression of Tim Cook I’ve ever seen him do. There was no Steve Jobs in this launch. It was all Tim Cook. It was incremental. It was meaningful for its current user base. It was sticky that customers are going to feel the need to stay with Apple. There was a lot of usability in the basic apps and functionality. There was a little bit of an improvement, there was some consistency in its security narrative.

And in the end, it was basically Apple was going to do Co-pilot on phones. That’s kind what I felt like the launch was. Some of its apps get more gains, some productivity, some capabilities all within the Apple model. So there is an Apple intelligence thing that is Apple’s own models. They didn’t really communicate that all that well. But then the ultimate puke moment for me was just in the end when it came to the, well, and if you need it to do the cool big stuff that other people are doing on LLMs, you can use OpenAI, which we are going to embed into our OS or kind of deeply embed into our system for everything that doesn’t live within the Apple AI, Apple intelligence ecosystem, which to me created this huge mental dissonance, Pat.

Because I was going in between this, you have this security privacy ethos which you just banged on for the first 90 minutes of your event and then you basically say, but then we’re going to open it up to the most controversial open, large language model that has been completely opaque in its data and its training utilization and you’re going to embed it in your core to enable people, again, to opt in, so you don’t have to use it. I want to be clear, I’m not saying you have to, but if you want to use it in a way that you’re using Perplexity, Google, OpenAI or any of these other large models that are internet wide, you have to now give your data to OpenAI.

Last thought, Apple’s not paying for this. So it’s a revenue neutral thing and that was super interesting to me because what it means to me is that OpenAI is like, “We want the data. We want the provenance, the pedigree that comes with being embedded into Apple.” Probably why they chose OpenAI over Google in the end. And interestingly enough though, huge win for Microsoft because now Apple is basically funding something that’s almost half owned by Microsoft and that’s just another way Microsoft’s strength gets teeth into things. So Pat, I could talk for a long time about this, it was just okay, but it will drive the cycle. I do believe that. And so I’m kind of beating myself up because in the end, they did enough, I just wasn’t inspired.

Patrick Moorhead: Yeah. So, I want to talk about what I had said moving up to this and some people tell me I’m negative on Apple and I’m not negative on Apple, I just expect a whole lot from them. And I was basically doing consumer devices 30 years ago and I think that they have to be held to a different standard. So what I did say about Apple, and this was probably a year ago, is that I’ve been calling an AI smartphone super cycle forever with the caveat that Apple, Samsung, and Android don’t screw it up. So what did I mean by that?

First of all, super cycle doesn’t mean that everybody goes out and replaces their phones. It might mean you take a four-year replacement cycle and shave off six months. That is what that was. So if I look at what I expected versus what happened, I measured it on three different things. First of all, them delivering a radical experience improvement to incent quicker upgrades and what we saw in the stock market isn’t necessarily indicative of what’s going to happen.

On one side, here you had two sides of the conversation, I think I might even have three, which was A, they had to come out with something that would super motivate end users to replace other phones, B, they had to do something that was super provocative, maybe doing something that was even bigger than 4.0 and all the experiences that we saw on that. But I do get it, right? I was ex-product guy, huge install base, big penalty for screwing it up, and quite frankly a low likelihood of people switching if they don’t change the world overnight. So, I think for the stock market, they did what they had to do to get it across. I was really surprised they didn’t have an upcharge for some super service.

On the cost competitiveness front, which on-device AI was really repopularized by Qualcomm recently. And Apple talked a lot about privacy and the experiences and things, they didn’t talk about the cost savings of it versus doing it in the cloud. But, by the way, I talked about this over a year ago. I said Apple would create its own servers with its own server chips. I have an analyst said that I was wrong, I was-

Daniel Newman: Your own analysts? Or other people’s analysts?

Patrick Moorhead: Other analyst firms. And what Apple said was, “Hey, if we don’t have enough compute on ours, go to this private cloud computing,” which is essentially, and we don’t know the details on this, is it Apple hosted? Is it a co-location? Is it somewhere at Google? They didn’t talk about the data center configuration, the location, the rack, the server, the interconnects, the chips. Maybe that’s a TBD. And I had a really smart person ask me, “Hey, why does Apple have to do that?” Well you know what? Apple is essentially getting into what AWS, Google Cloud, and Azure are doing and they will be held to a very different standard.

So for instance, do they have the full chain of custody with APC? AWS and all the hyperscalers have hundreds of security certifications. Where are Apple’s security certifications for their cloud-based services? And I’m wondering too, why can’t users opt out of this cloud of PCC if they want? It seems like they should. I got some play on social media that said, “Hey, they probably will make it an option, but it’s just they’re not saying that right now.”

So, Android with Samsung has the ability to not have any… Thank you, lawnmower. Not to have any data move up there and recall. And yeah, I’m very current on what’s going on there. Recall doesn’t communicate with the cloud. So I think Apple should probably do this. And one thing that’s kind of like the final thing I’ll say is what’s kind of grating on me, if 99% of Apple intelligence is running on eternal models, why do you need to use ChatGPT at all? It’s not like those internal models can be dumb and they can’t comprehend any of the outside world. So that was really confusing to me on that.

Author Information

Daniel is the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise.

From the leading edge of AI to global technology policy, Daniel makes the connections between business, people and tech that are required for companies to benefit most from their technology investments. Daniel is a top 5 globally ranked industry analyst and his ideas are regularly cited or shared in television appearances by CNBC, Bloomberg, Wall Street Journal and hundreds of other sites around the world.

A 7x Best-Selling Author including his most recent book “Human/Machine.” Daniel is also a Forbes and MarketWatch (Dow Jones) contributor.

An MBA and Former Graduate Adjunct Faculty, Daniel is an Austin Texas transplant after 40 years in Chicago. His speaking takes him around the world each year as he shares his vision of the role technology will play in our future.

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