AI: Apple rolls out 'good enough' private AI for the masses. RTZ #524

...a tried and true tech strategy for mainstream users vs early adopters

With Apple finally rolling out the first parts of its long awaited ‘Apple Intelligence’ today, the race for mainstream AI users accelerates this AI Tech Wave. While OpenAI remains the AI leader with its GPT-4 ‘Omni’ (soon GPT-5 ‘Orion’ and GPT-o1 for AI Reasoning), Apple is focused on making Apple Intelligence the ‘good enough’ on-ramp to what most technologists consider LLM AI. With an above average focus on user privacy and trust with AI.

It’s first being introduced today in software updates iOS 18.1 to hundreds of millions of iPhone users. It’s early days still for AI.

While early adopters revel in comparing the almost weekly upgrades to their favorite AI services like the offerings from OpenAI above, to Google Gemini, to Microsoft’s Copilot, to the various flavors of Anthropic’s Claude to Meta’s ‘Meta AI’ and Llama 3 LLMs, to Elon’s xAI Grok, Apple is traveling in a different lane with its ‘slow and steady’ on-ramp to the AI highways, while first letting their billions of users take ‘AI for a spin’ in the parking lots and side roads.

Try Apple Intelligence to summarize your writings on Apps on your Macs, iphones and iPads. Have ‘Genmoji’ AI draw up whimsical AI generated images you can send to friends and family in Apple Messages. And when you need to ask AI ‘bigger questions’ about the world, Apple Intelligence will gently steer you to OpenAI’s ChatGPT ‘AI highway’, with your permission of course.

And Apple doing everything to guard your privacy and keep your trust while you’re tooling around with AI.

It’s a strategy that echoes AOL (aka America Online) in the latter part of the 1990s, when most mainstream users experienced the ‘Internet’ for the first time via their AOL accounts. While busy sending messages on AIM within AOL and hanging out in the hundreds of groups where ‘internet content’ was available, within AOL’s garden walls.

The hundreds of millions of early adopters of course will whisk around the ‘real AI services’ directly on OpenAI ChatGPT, Gemini, and others. Much like the early adopters in the nineties cruised around the internet on their dial-up modem computers using Netscape browsers (the ChatGPT of its day). Cruising around Yahoo!, Excite and other ‘portals’ to the internet.

It’s a tried and true strategy in the early days of most technology waves. Microsoft Windows was ‘good enough’ for most personal computer users in the early days while the early adopters gravitated to their first Apple Macs. Today, we’re seeing mainstream EV buyers in the US, China and elsewhere gravitate to ‘good enough’ EVs with lower cost batteries and hybrid drive systems vs far more expensive ‘pure’ EVs like Teslas.

As I mentioned this Saturday, Apple plans to roll out the ability to take the AI on-ramp to OpenAI’s ChatGPT with iOS 18.2, currently in developer beta, sometime in the next few months. Apple products for its billions of devices users, is where they start every day with their daily habits.

I point out this ‘good enough’ dual tracks for new technologies, one for early adopters, and one for the mainstream masses, because it’s where the daily user habits are going to be baked in large numbers. So it behooves the ‘pure AI’ companies to make sure they have ‘distribution’ arrangements with companies with the mainstream audiences.

It’s likely one of the reasons Meta’s Mark Zuckerberg is considering adding Search to its ‘Meta AI’ services targeted for Meta’s three billion users on Instagram, Facebook, WhatsApp and Messenger.

In these early days of this AI Tech Wave, the rising tide will find success for both strategies.

The advanced AI products for the early adopters, and the ‘good enough’ ones for the mainstream masses. And the advanced features will of course flow into the mainstream products in good time.

For now, in my view, it’s an under appreciated AI asset for Apple. Stay tuned.

(NOTE: The discussions here are for information purposes only, and not meant as investment advice at any time. Thanks for joining us here)