Apple has been ousted from the top five smartphone vendors in China during Q2, as local brands like Huawei continue to escalate competition
Apple is no longer among the top five smartphone vendors in China as local brands take over the market.
Apple’s market share in China has declined, falling to 14% in the second quarter from 15% in the first quarter and 16% 2023.
For the first time in history, domestic vendors have taken over all top five positions in China.
According to reports, incorporating Apple’s Intelligence systems in its products in mainland China will be crucial over the next 12 months, as Chinese brands are rapidly integrating generative AI into their designs.
This is not good news for Apple. The company is facing challenges, notably lagging behind in the AI innovation race, and compounded by a rapidly falling share of the mobile market in China.
To put this figure into some perspective, the loss is comparable to the GDP output of a small country, such as Norway, Singapore, or the UAE, for example.
Global semiconductor stocks experienced volatility on Tuesday following a decline in Nvidia’s shares from the previous trading sessions.
Shares of chip firms in Europe and Asia fell in early trade as investors reacted to Nvidia losing more than $500 billion in market capitalization over three trading days. Some of the stocks recouped losses, however, as shares in the U.S. chipmaking giant recovered around 6 – 6.5% as of Tuesday 25th June 2024.
This follows a significant drop in Nvidia’s share value, which fell 13% over three consecutive sessions from the record highs achieved on Thursday 20th June 2024.
On Monday 24th June 2024, Nvidia’s stock closed down 6.7%, marking its second-largest decline of the year, yet the shares began to recover in early trading on Tuesday 25th June 2024.
Last week, the company surpassed Apple and Microsoft to become the most valuable U.S. company, achieving a market capitalization of over $3.4 trillion. However, by the end of Monday, Nvidia’s market value had declined by more than $540 billion from its intraday record on Thursday 20th June 2024.
Nvidia reported that the demand for its highly sought-after artificial intelligence graphics processing units (GPUs) continues to be strong.
Companies such as Microsoft, Google, Amazon, and Meta are investing billions of dollars in these chips to enhance their data centres and cloud services.
Nvidia, traditionally recognised within the gaming community for its graphics chips, has become the world’s most valuable publicly traded company.
On Tuesday 18th June 2024, Nvidia’s shares rose by 3.6%, increasing its market cap to $3.34 trillion and overtaking Microsoft, now valued at $3.32 trillion. Earlier in the month, Nvidia’s valuation reached $3 trillion for the first time, surpassing Apple.
Nvidia $3.34 trillion market cap
Nvidia $3.34 trillion market cap
So far this year, Nvidia’s shares have surged over 170% and saw further gains after announcing first-quarter earnings in May 2024. Since the close of 2022, the stock has increased more than ninefold, paralleling the rise of generative artificial intelligence.
Apple’s shares dropped by 1.1% on Tuesday, resulting in a market value of $3.29 trillion for the tech giant.
Nvidia commands roughly 80% of the market share for AI chips in data centres, a sector that has expanded rapidly as companies like OpenAI, Microsoft, Alphabet, Amazon, and Meta have competed to acquire the necessary processors for constructing AI models and managing growing workloads.
In the latest quarter, Nvidia’s data centre business saw a 427% increase in revenue from the previous year, reaching $22.6 billion and comprising approximately 86% of the company’s total sales.
Established in 1991, Nvidia initially focused on hardware, selling gaming chips for running 3D games. The company has also ventured into cryptocurrency mining chips and cloud gaming services.
However, in the last two years, Nvidia’s stock has soared as investors recognised its pivotal role in the AI boom, a trend that continues to accelerate. This surge has increased the net worth of co-founder and CEO Jensen Huang to an estimated $117 billion, ranking him as the 11th richest individual globally, according to Forbes.
But is the rise too fast and is it time for a share price valuation adjustment in its meteoric rise, to bring it back down to Earth?
Nvidia’s swift ascent is poised to prompt a major technology exchange-traded fund to acquire more than $10 billion in shares of the semiconductor maker, consequently reducing its shareholding in Apple.
The Technology Select Sector SPDR Fund (XLK), which will rebalance soon, is guided by an index that will adjust based on the market cap value at Friday’s close. According SPDR Americas Research, the recalibration will reportedly position Microsoft as the leading stock, followed by Nvidia, and then Apple.
Without caps, each of the three stocks would exceed a 20% weight in the index. However, the index’s diversification rules restrict the total weight that stocks constituting at least a 5% share of the fund can hold.
Consequently, it is anticipated that Microsoft and Nvidia will each approach a 21% weight, while Apple’s share is projected to drop to approximately 4.5%.
This news moved markets on 17th June 2024 and pushed the S&P 500 to a new all-time high. The Nasdaq100 index also relished the news reaching: 19902.75
The Nasdaq100 index also relished the news reaching: 19902.75
Nvidia share price 17th June 2024 – one year chart
Apple’s shares reached a new record high of approximately $207 per share on Tuesday 11th June 2024, surpassing the previous record set in December.
At its annual developer conference on Monday 10th June 2024, the company launched its highly anticipated venture into AI. Apple is playing catch-up in the AI race and this announcement cheered its loyal followers.
Analysts predict that the introduction of new AI features will prompt consumers to update their devices, as these features are exclusive to the latest models.
This is the perfect business model – new products driven by new features, this time it’s ‘AI’ for Apple Intelligence. I wish I thought of it – ‘A‘ for Apple and ‘I‘ or Intelligence. Not just any intelligence, this is Apple intelligence.
So, now we have Apple AI – let’s see what Apple’s version of AI really is.
Apple share price one year chart hitting $207 on 11th June 2024
Apple share price one year chart hitting $207 on 11th June 2024
The S&P 500 and Nasdaq Composite reached new closing highs on Tuesday 11th June 2024, propelled by Apple as the tech giant’s stock hit a record itself.
The S&P 500 index climbed to a new high to close at 5375, while the Nasdaq Composite finished the day at 17343. Both indices also hit new intraday highs. However, the Dow Jones Industrial Average fell by around 120 points to close at 38747.
S&P 500 reaches new all-time high on 11th June 2024
S&P 500 reaches new all-time high on 11th June 2024
Nasdaq Composite hits new all-time high on 11th June 2024
Investors seemed to be cashing in on Nvidia, a leader in artificial intelligence, and shifting focus to Apple, which recently introduced new features likely to drive a surge in iPhone upgrades.
Apple’s stock reached a new high during the trading session, its first since December 2023, with around a 7% increase. Nvidia’s stock declined by 0.7% as some profit taking ensued.
Apple has entered the artificial intelligence race with the announcement of its version of AI – Apple Intelligence on Monday 10th June 2024, in its attempt to catch up in the AI race.
Reportedly to use it on your phone, you’ll need at least the high-end iPhone 15 Pro from this year’s lineup.
According to Apple’s website, Apple Intelligence will also be compatible with devices equipped with the M1 chip, including the iPad Air, iPad Pro, and Macs.
Apple Intelligence, set to launch in beta this autumn, will offer a variety of features. It will be able to proofread and rewrite your text in different tones, create personalized emojis known as ‘Genmoji,‘ and search for specific messages on your iPhone.
Additionally, it will summarize and transcribe phone calls, manage priority notifications, and integrate OpenAI’s ChatGPT for enhanced Siri responses.
Nothing new here then, just AI features already available elsewhere. Hopefully it will have a decent Apple AI make-over when it finally and fully arrives across all Apple products and platforms.
Apple isn’t leading in AI… yet – it’s just following for now!
The S&P 500 reached a new high as Nvidia surpassed the $3 trillion mark for the first time, and the anticipation of an interest rate cut grew due to softer-than-expected job data.
S&P 500 all-time high as of 5th June 2024
S&P 500 all-time high as of 5th June 2024
Similarly, the Nasdaq 100 and Nasdaq Composite achieved new record highs
Nasdaq 100 as of 5th June 2024
Nasdaq Comp as of 5th June 2024
AI boom catapults Nvidia passed Apple’s market cap’ valuation
Nvidia’s shares have surged 24% following its impressive earnings report in May, in contrast to Apple’s shares, which have increased by only 5% this year amid a slowdown in sales growth in recent months.
Nvidia one year share price as of 5th June 2024
Nvidia one year share price as of 5th June 2024
Nvidia Market Cap at $3.01 trillion as of 5th June 2024
Apple shares rose by 7% in after-hours trading on Thursday 2nd May 2024, following the company’s announcement of fiscal second-quarter earnings that exceeded expectations, coupled with the unveiling of an expanded stock repurchase program.
The tech giant disclosed that its board has approved a new $110 billion share buyback plan, marking a 22% increase from the previous year’s $90 billion authorization and setting a record as the largest buyback in history, significantly surpassing Apple’s prior repurchase initiatives.
Apple one day chart 2nd May 2024
Apple accounts data summary to 30th March 2024
Revenue: $90.75 billion vs. $90.01 billion estimated
iPhone revenue: $45.96 billion vs. $46.00 billion estimated
iPad revenue: $5.6 billion vs. $5.91billion estimated
Mac revenue: $7.5 billion vs. $6.86 billion estimated
Other Products revenue: $7.9 billion vs. $8.08 billion estimated
Services revenue: $23.9 billion vs. $23.27 billion estimated
EPS: $1.53 vs. $1.50 estimated
Gross margin: 46.6% vs. 46.6% estimated
According to Apple’s latest results, iPhone sales have declined in nearly every global market. The tech giant reported that the overall demand for its smartphones decreased by over 10% in the first quarter of the year, with sales diminishing in all geographic regions except Europe.
Reports indicate that Apple is delving into AI-powered robotics, aiming to innovate within the home robotics sector. A Bloomberg article reveals that the tech titan is exploring two fascinating initiatives.
Mobile Robot
Apple is reportedly exploring the development of a robot that can accompany its owner. Envision a congenial AI companion that travels with you.
Robotic Display
The project aims to develop a robotic mechanism capable of moving displays. Despite being periodically removed and reinstated on Apple’s roadmap; it is still in the preliminary research stage.
The projects are spearheaded by Matt Costello, Apple’s VP of Hardware Engineering, and Brian Lynch, the Senior Director of Home Hardware Engineering. Moreover, Apple’s AI team is developing algorithms to enable robots to navigate homes, potentially linking to the mobile robot initiative.
Apple’s foray into AI-driven home robots comes after shelving its electric vehicle project, marking an intriguing development. The company is exploring the integration of AI into AirPods and the possibility of creating smart glasses. Despite not launching generative AI tools as swiftly as some rivals, Apple is set to introduce some later this year.
In the realm of robotics, Apple enters a field with established entities like Amazon, Roomba, and Unitree, which have already introduced home robotics products.
Therefore, it’s worth watching for upcoming Apple AI products in the future!
On Monday, 25th March 2024, the European Union initiated its first investigation under the new Digital Markets Act, targeting Apple, Alphabet, and Meta for potential tech legislation breaches.
Statement
“Today, the Commission has opened non-compliance investigations under the Digital Markets Act (DMA) into Alphabet’s rules on steering in Google Play and self-preferencing on Google Search, Apple’s rules on steering in the App Store and the choice screen for Safari and Meta’s ‘pay or consent model” – the Commission said in a statement.
The U.S. has reportedly initiated a significant lawsuit against Apple, alleging that the technology giant has monopolised the smartphone market and stifled competition.
The Justice Department claims that Apple has misused its dominance over the iPhone App Store to ‘lock in’ customers and developers. The company is also accused of taking unlawful measures to obstruct applications perceived as competitive threats and to degrade the appeal of competing products.
Apple has pledged to ‘vigorously’ contest the lawsuit and refutes the allegations.
A slowdown in iPhone sales in China, the reported dumping of an EV project, no iPhone AI interface to speak of and now a U.S. lawsuit to defend. Is Apple’s ‘crown of dominance‘ slipping ever-so-slightly?
Apple is reportedly engaged in negotiations to acquire a licence for Google’s Gemini, a generative AI platform, with the intention of integrating it into iPhones. These ongoing discussions may result in Gemini enhancing iPhone software with new features later this year.
The terms, branding, and implementation details have not been finalised. This potential partnership could significantly impact the AI capabilities of future iPhones.
Apple has reportedly cancelled its plans to build an electric car, bringing an end to a secretive project known as Project Titan
The EV project consumed immense resources over the past 10 years, with executives from the company making an unexpected announcement. The decision to halt the program marks a significant retreat from Apple’s previous strategy.
Apple has never publicly acknowledged the project, which was rumoured to involve some two thousand people.
Key points:
Project Titan: Under the codename Project Titan, Apple aimed to develop an electric, semi-autonomous vehicle. The company reportedly spent billions on this initiative, hiring executives from renowned car companies and acquiring autonomous vehicle startups.
Setbacks and Delays: The attempts to bring an Apple EV to market faced numerous setbacks, including layoffs, executive departures, and shifting ambitions.
Shift to Generative AI: Many employees who worked on the electric car project will now transition to working on generative artificial intelligence (AI) projects. Apple’s focus will shift toward AI research and development.
Tesla Comparison: Initially, Apple reportedly considered developing an entirely self-driving car with no steering wheel. However, the company later decided to focus on a vehicle with some self-driving capabilities, akin to Tesla’s EVs.
Apple now aims to deliver generative AI features to consumers within the year
While the electric car dream may have faded, Apple’s focus on cutting-edge technology continues as it shifts towards AI innovation.
But how much more innovation and profit is there left to squeeze from the iPhone?
The Magnificent Seven, or MAMA ANT, is a term coined by Bank of America to describe the seven most dominant tech companies in the world
The Seven are: Microsoft, Amazon, Meta Platforms, Apple, Nvidia, Tesla, and Alphabet. These companies have not only led the tech sector in terms of innovation, growth, and profitability, but have also become some of the most valuable entities in the world by market capitalization.
Valuation at $15 trillion
Market capitalization, or market cap, is the total value of all the shares of a company that are traded on the stock market. It reflects the market’s perception of the company’s future prospects and earnings potential.
As of January 2023, the Magnificent Seven had a combined market cap of about $15 trillion, which was more than the gross domestic product (GDP) of almost every country in the world, except for the United States, China and Japan (just).
Magnificent Seven
The Magnificent Seven have achieved such a remarkable feat by leveraging their core competencies in various fields of technology, such as artificial intelligence (AI), cloud computing, social media, e-commerce, gaming, electric vehicles, and online advertising. They have also diversified their revenue streams by acquiring or developing new products and services, such as Activision Blizzard, AWS, Oculus, iPhone, GeForce, SpaceX, and YouTube. They have also benefited from the increased demand for digital solutions amid the Covid-19 pandemic, which accelerated the adoption of online platforms, remote work, and entertainment.
Challenges
However, the Magnificent Seven also face some challenges and risks that could threaten their dominance and valuation. These include increasing competition from other tech companies, especially from China, such as Alibaba, Tencent, Baidu, and Huawei.
They also face regulatory scrutiny and pressure from governments and consumers over issues such as antitrust, privacy, taxation, content moderation, and environmental impact. Furthermore, they may encounter technical difficulties, security breaches, or ethical dilemmas that could damage their reputation and customer trust.
Conclusion
In conclusion, the Magnificent Seven are the most powerful and influential tech companies in the world, and their market cap surpasses that of almost every country in the world.
List of 10 countries by stock market capitalization
List of 10 countries by stock market capitalisation
The meteoric rise in the profits and market capitalisations of the Magnificent 7 U.S. tech giants: Apple, Amazon, Alphabet, Meta, Microsoft, Nvidia and Tesla – outstrip those of all listed companies in almost every G20 country. Of the non-U.S. G20 countries, only China and Japan (and the latter, only just) have greater profits when their listed companies are combined.
They have achieved this by exploiting their competitive advantages in various domains of technology and expanding their offerings and markets. However, they also need to overcome some challenges and risks that could hamper their growth and value in the future.
A forced size reduction to stop the monopolising of market share could help tame these beasts too and open up fairer competition.
Should we worry?
Basically, yes, we should be concerned about the size and dominance of these companies.
This level of wealth and power concentrated in just a handful of companies has led some analysts to voice concerns over related risks in the U.S. and global stock markets.
Economists and stock market analysts have cautioned that the U.S. stock market is rivalling 2000 and 1929 in terms of being at its most concentrated in history.
It was a good day of earnings for Big Tech companies.
Three of the Magnificent 7 results dominated the headlines: Meta, Amazon and Apple. Nasdaq and S&P 500 gained in ‘after the bell’ trading. This after a punishing day for Alphabet and Microsoft, despite good results.
Nasdaq 100 closed at: 17344 but climbed above 17500 in after-hours trading.
Wall Street seemed impressed with Meta’s results.
Meta
Shares of Meta surged 15% after the social-media giant defied analysts’ estimates. It posted earnings of $5.33 per share on revenue of $40.11 billion. The company also declared its first-ever dividend payment. Share buy-back was also announced.
Meta platforms Inc. One year chart
Meta platforms Inc. One year chart
The results show Meta’s online ad business continues to recover well from a terrible 2022.
Sales in the Q4 jumped 25% year on year.
Expenses decreased 8% year over year to $23.73 billion.
Amazon
Investors also enjoyed Amazon’s earnings, which easily topped Wall Street’s predictions. The ecommerce giant also provided a strong positive outlook. The stock jumped 7% in extended trading.
Amazon.com Inc. One year chart
Amazon.com Inc. One year chart
Q4 was a record-breaking Holiday shopping season in the U.S. and closed out a robust 2023 for Amazon. Amazon has much planned for 2024.
Apple
But Apple didn’t benefit from the same treatment despite posting strong results.
Apple Inc. One year chart
Apple Inc. One year chart
Apple also exceeded estimates, reporting revenue growth for the first time in a year. But shares slid more than 2% in extending trading after it posted a 13% decline in sales in China.
Apple’s outlook suggesting weak iPhones sales may have also disappointed investors.
U.S. microchip giant Advanced Micro Devices (AMD) is investing in AI PCs to take on the likes of Nvidia and Intel and Arm as the AI race gains momentum.
As the AI market expands so too will AI powered personal computer (PC). These are personal computers embedded with processors specifically designed to perform AI functions such as real-time language translation. Intel has already announced its AI powered chip for the PC.
Tech research firm Canalys in a December report said the boom in generative AI is expected to boost PC sales as consumers are seeking devices with AI features, predicting that 60% of the PCs shipped in 2027 will be AI-capable.
AI tech interest explodes
An explosion of interest in AI was sparked by the launch of ChatGPT in November 2022 as the chatbot went viral for its ability to generate human-like responses to users’ prompts.
Microsoft was quick to adopt the Technolgy and incorporate AI into its Bing search engine. Other companies such as Amazon, Alphabet (Google), Arm, Meta, Tesla and Apple are all heavily involved in AI development too.
In 2023 Apple became the biggest smartphone vendor by shipments in China for the first time.
Last year, Honor, a spin-off from Chinese company Huawei, held the second spot with almost a 17% market share, followed by Vivo, Huawei and then Oppo.
One of the biggest changes in 2023 was Huawei’s return to the top five in China in the Q4. The iphone has been one of the world’s best-selling selling products of all time.
Since the introduction of the Appleiphone in 2007 by Steve Jobs, its inventor and company joint founder, it has gone on to sell 2.3 billion and has over 1.5 billion ‘active’ users. Not bad for a product that investors initially called ‘dead on arrival’ due to lack of interest and sales.
Nokia 3310
In 2007 the Nokia 3310 was the clear market leader and easily king of the mobile phone market. Nokia sold 7.4 million units in 2007 – Apple sold just 1.4 million. Nokia was the ‘go to product’. But not for long.
Oh my, how things have changed. Apple is the now the world’s best-selling product (not just the world’s best-selling phone) – with Nokia and many others left trailing in the dust.
Apple app store
It was the apps that done it; having a product that could be any number of different ‘products’ in one and held in your hand was a game changer – and that changed the world.
The rest is history.
Apple share price chart from 1984 (the year the Apple Macintosh was introduced)
Apple share price chart from 1984 (the year the Apple mac was introduced)
Microsoft’s market cap surpassed $3 trillion in intraday trading Wednesday after the stock climbed more than 1% and hit around $404 per share. The stock lost some ground throughout the day to close at: $402 per share.
The achievement comes nearly two weeks after Microsoft eclipsed Apple as the world’s most valuable public company on 12th January 2024. However, Apple has reclaimed top spot – its market cap closed at around $3.01 trillion on Wednesday 24th January 2024.
Microsoft share price 24th January 2024 – $402.00, 1year chart
Microsoft share price 24th January 2024 – $402.00, 1 year chart
Microsoft shares are up more than 7% year to date as investors remain bullish about the company’s investments in artificial intelligence.
It is strongly expected that Microsoft will deliver good results in the Q2 earnings report, because of its leadership position gained in generative AI.
Microsoft due to announce Q2 figures on 30th January 2024
Microsoft due to announce Q2 figures on 30th January 2024
The Magnificent Seven is a term coined to describe the seven most valuable and popularly owned tech companies in the U.S. stock market.
It was also a 1960’s movie…
The Seven
Apple (AAPL)
The world’s largest software company, known for its iPhone, iPad, Mac, Apple Watch, AirPods, and other devices, as well as its services such as iCloud, Apple Music, Apple TV+, and App Store.
Microsoft (MSFT)
The world’s largest software company, known for its Windows operating system, Azure cloud services, LinkedIn social media platform, Office professional software suite, and Xbox gaming brand.
Alphabet (GOOGL)
The parent company of Google, the world’s leading search engine, as well as other businesses such as YouTube, Google Cloud, Google Maps, Google Ads, and Waymo.
Amazon (AMZN)
The world’s largest online retailer, as well as a leading provider of cloud computing services through Amazon Web Services (AWS), and a major player in digital entertainment through Amazon Prime Video, Amazon Music, and Kindle.
Meta Platforms (META)
The former Facebook, the world’s largest social media network, as well as the owner of other popular platforms such as Instagram, WhatsApp, Messenger, and Oculus.
Nvidia (NVDA)
The world’s leading manufacturer of graphics processing units (GPUs), which are used for gaming, artificial intelligence, cloud computing, and cryptocurrency mining, as well as other products such as Nvidia Shield, GeForce Now, and Omniverse.
Tesla (TSLA)
The world’s most valuable automaker, known for its electric vehicles, battery products, solar panels, and self-driving technology, as well as its visionary founder and CEO, Elon Musk.
Market dominance
These seven companies are not only dominant in their respective fields, but also at the forefront of innovation and growth in the tech sector. They collectively make up some 30% of the S&P 500 index and more than half of the Nasdaq 100 index.
They have also delivered impressive returns for investors over the past five years, with Nvidia and Tesla leading the pack with more than 800% gains. The Magnificent Seven are often compared to the FAANG stocks, which include four of the seven companies, but exclude Microsoft, Nvidia, and Tesla, and include Netflix instead.
Some analysts suggest that the Magnificent Seven capture the current state and future potential of the tech industry. But is it now time to rotate out of tech into other areas that have been neglected. I wouldn’t be surprised to see the bull market charge on but with other ‘less’ loved companies leading the way.
It has been calculated that the combined market cap value of these seven companies is some $9 trillion.
Apple and generative AI technology is a topic that has been generating a lot of interest and speculation lately.
According to various reports, Apple is working on developing its own large language model and chatbot, which could potentially enhance its products and services with new features and capabilities. However, some analysts and experts have also raised questions about whether Apple has missed an opportunity to be a leader in the generative AI field, as it seems to be lagging behind its competitors such as Google, Microsoft, and OpenAI.
Apple uses AI in its products but hasn’t launched a generative AI product along the lines of OpenAI’s ChatGPT or Google Bard. Instead, Apple’s AI is used for improving photos and autocorrecting text.
$1 billion per year plan
Apple is on track to spend $1 billion per year on developing its generative artificial intelligence products, Bloomberg reported.
Apple is looking to use AI to improve Siri, Messages and Apple Music.
The spending comes as the company plays catch-up to some competitors who have already debuted new AI products and features, such as Google, Microsoft and Amazon.
Apple was caught flat-footed when ChatGPT and other AI tools took the technology industry by storm.
Generative AI
Generative AI is a subfield of artificial intelligence that focuses on creating content such as text, images, videos, music, and more, based on data and algorithms. One of the most popular examples of generative AI is ChatGPT, a chatbot that can respond to questions and other prompts in a natural and human-like way.
Watercolour artwork impression – ChatGPT was released by OpenAI in 2022, and since then, it has been widely used and improved by various companies and researchers.
ChatGPT was released by OpenAI in 2022, and since then, it has been widely used and improved by various companies and researchers.
Apple slow response
Apple, on the other hand, has been relatively quiet about its generative AI efforts, until recently. In October 2023, Bloomberg reported that Apple was internally testing a ‘ChatGPT-like’ chatbot nicknamed ‘Apple GPT’, but it had not devised a clear strategy for releasing generative AI tools to the public. Apple’s CEO Tim Cook also confirmed that the company was working on generative AI for years, but it was approaching it ‘really thoughtfully and think about it deeply’ because of the potential risks and challenges.
Potential challenges Apple faces in developing and deploying generative AI
Privacy
Apple has always been more cautious than its competitors in handling user data, and it has built its reputation on being a privacy-focused company. However, generative AI requires a lot of data to train and improve its models, which could pose a dilemma for Apple. How can it balance the need for data with the respect for user privacy? How can it ensure that its generative AI does not leak or misuse personal information?
Design
Apple is known for its elegant and intuitive design philosophy, which applies to both its hardware and software products. However, generative AI is a complex and unpredictable technology, which could challenge Apple’s design principles. How can it make its generative AI features easy to use and understand for its customers? How can it avoid confusing or misleading users with its generative AI outputs?
Ethics
Apple has always been mindful of the social and ethical implications of its products, and it has often taken a stance on issues such as human rights, environmental sustainability, and diversity. However, generative AI could raise new ethical concerns, such as bias, misinformation and manipulation. But then that is a common problem for all generative AI systems.
Generative AI could raise new ethical concerns, such as bias, misinformation and manipulation.
These are some of the questions that Apple needs to answer before it can launch its generative AI products to the public. It is possible that Apple is taking its time to address these issues carefully and thoroughly, as it has done in the past with other technologies such as Face ID or Apple Pay. However, it is also possible that Apple has missed an opportunity to be a pioneer in the generative AI field, as it has done in the past with other technologies such as smart speakers or cloud computing.
While Apple is working on its generative AI projects internally, its competitors are already offering generative AI.
Google
Google has integrated its large language model LaMDA into various products and services, such as Google Assistant, Google Photos, Google Docs, Google Translate etc. LaMDA can generate natural and conversational responses to any query or prompt, as well as create images and videos based on text descriptions.
Microsoft
Microsoft has acquired OpenAI’s ChatGPT technology and made it available through its Azure cloud platform. ChatGPT can be used by developers and businesses to create chatbots, voice assistants, content generators, and more. Microsoft has also integrated ChatGPT into some of its products such as Outlook, Teams, PowerPoint, and more.
Amazon
Amazon has launched Alexa Conversations, a feature that allows Alexa users to have more natural and engaging conversations with the voice assistant. Alexa Conversations can also leverage Amazon’s vast e-commerce data to provide personalized recommendations and suggestions to users.
These are just some examples of how generative AI is being used by Apple’s competitors.
Robot chatting to human chatbot online
Apple has missed an opportunity to be a leader in the generative AI field by being too slow or too cautious in developing and deploying its own generative AI products.
However, it is highly likely that Apple is waiting for the right moment to surprise everyone with its innovative and unique generative AI features that will set it apart from its competitors.
These are the seven largest U.S. listed companies in the technology sector.
Apple, Microsoft, Amazon, Alphabet, Nvidia, Tesla and Meta Platforms.
According to a report released Monday 2nd October 2023, these tech’ stocks have seen their valuation drop relative to the median stock in the S&P 500, making them more attractive for investors. The report says that the Magnificent 7 trade at 1.3 times their PEG ratio (price-to-earnings-to-long-term growth), versus 1.9 for the median S&P 500 stock.
This is the cheapest valuation in over six years – time to buy yet?
The report also highlights some positive drivers for these stocks, such as their strong sales growth, their ability to beat expectations, and their resilience to rising interest rates.
However, some analysts also warn that the dominance of these stocks could pose a risk for the broader market if something bad happens to tech’.
Apple said on Saturday 30th September 2023 that it will issue a software update that would address customer complaints about the latest iPhone 15 models, released just over a week ago, running hot.
The new iPhones were running hot because of a combination of bugs in iOS 17, bugs in apps, and a temporary set-up period that requires extra processing and therefore heat generation, Apple confirmed.
Statement from Apple
‘We have identified a few conditions which can cause iPhone to run warmer than expected. The device may feel warmer during the first few days after setting up or restoring the device because of increased background activity.’
‘We have also found a bug in iOS 17 that is impacting some users and will be addressed in a software update. Another issue involves some recent updates to third-party apps that are causing them to overload the system. We’re working with these app developers on fixes that are in the process of rolling out.‘
