The Economist Interview: Hints at the future direction of the company
Nota Bene #Apple Management #Interview #Prediction · 2 comments
by Horace Dediu
"Apple’s new boss needs to restore its magic for the AI era"
If Mr Ternus does “nothing but keep the ship on course”, Apple could almost double its number of devices from 2.5bn globally to 4.5bn over the next 15 years, reckons Horace Dediu, a veteran Apple analyst. That would be a huge platform on which to run—and monetise—AI apps. As users subscribe to ChatGPT or other AI apps, “Apple will just take a cut,” Mr Dediu adds. By one estimate, Apple is close to generating $1bn in ai revenues so far this year via the App Store, despite having no flagship ai product.
Azeem Azhar, author of Exponential View, another newsletter, adds that to overcome bottlenecks in cloud-based AI, routine queries may be shifted to “edge” devices, creating a big opportunity for Apple. In Mr Azhar’s telling, the future will involve “a combination of the highly portable phone with the persistent desktop or server. Both play to Apple’s strengths.”
There is, however, a more radical path available to Mr Ternus, which is to develop a new “form factor” beyond the iPhone that is more suitable for the interactive nature of ai than doomscrolling on a touchscreen. Competitors are already trying to turn the smartphone into yesterday’s technology. Meta, the social-media giant run by Mark Zuckerberg, is selling millions of AI-powered smartglasses. Sir Jony Ive, the design guru who helped Jobs create the iPhone, has teamed up with OpenAI to develop a brand new gadget of unknown form. To keep up, Mr Ternus may have to reinvigorate Apple’s product line-up with a determination that eluded Mr Cook.
Apple’s Vision Pro virtual-reality headset, though an over-priced flop, may help the new boss develop Apple smartglasses. The company is also reportedly working on a wearable AI pin. Mr Dediu says that one of Mr Ternus’s main strengths may be his devoted following among Apple’s engineers, who have been pivotal to the firm’s success. “Ternus will come out as an engineer’s engineer,” he says. “He is hard-core. That might energise the teams.”
Source: The Economist
NB: As is often the case, a 45 minute discussion turns into two sentences. The article sadly does not provide hints at the future direction of the company. But we can…
…What we can foresee with certainty is what I said: the momentum is there for a doubling of the business without any new initiatives. The cultural fit for Ternus is 100%. That is based on the data we have but it is not the limit of what can be done. It is up to Apple to create the future.
This is not about AI or any new form factors but about harnessing the new technologies with Apple's existing operational capabilities and existing market access in a way that competitors cannot replicate. Thus unforeseen growth can be created and, by definition, it's not possible to tell what that may be.
But I can foresee that the organization is robust and well managed enough to create this unforeseen growth.
2 comments
FredHS ·
The alleged threat of new devices to render the iPhone obsolete is just a rehash of "iPhone killer". Remember the palm pilot, Microsoft's attempts, and even Android, now more fractured with Huawei's own OS.
Both franchises, iPhone and Mac, are stronger than ever. Apple's leadership relative to Android and Windows respectively has expanded.
As for new form factors, Apple Watch has long ago won the wrist market. Hearing only devices remain open, with Apple doing very well. "Glasses" devices remain elusive for all entrants, even after about 2 decades.
Sacto Joe ·
Hi, Fred. I'd extend that to saying this is nothing different than the way Siri has been attacked as dumber than its competitors without asking the critical question "why?". Answering that question tells us that there is a distinct and practical reason, and why, on the whole, Apple users would rather put up with a dumb Siri: She doesn't have a Cloud-based host of personal information about her users that is used to target them with, at a minimum, directed ads. Also, that information is vulnerable to being stolen by outside actors for their purposes, should it not be adequately protected.
And the "intelligence" of these other Personal Assistants is and will grow by leaps and bounds because of AI, while doing nothing to protect the abuse of the user's personal information put under a microscope.
Frankly, I'm expecting two kinds of Siri to be given birth shortly:
(1) Smartest Siri, but only available if you purposefully open your information to external AIs that are not directly under Apple's control.
(2) Smarter Siri, which will do its best to anonymize the user's private information.
Some day, Lord willin' and the creek don't rise, Apple will unveil an Apple iCloud AI that will allow for LLMS that truly respect personal privacy. I don't think that time is now. In the interim, I'll continue to be hobbled by the less intelligent Siri, and consider if we have enough funds to construct a combined Apple M chip-based system that will allow me to eventually construct a "private" AI that will give me the technological advantage AND the personal security that I could really use.