• Apple launches AI capabilities with OpenAI partnership.
• iPhone Maker aims to rival Microsoft and Google’s AI efforts.

After nearly two years of staying out of the generative artificial intelligence craze, Apple made a significant move during its annual worldwide web developer conference (WWDC).

The iPhone maker announced a new partnership with OpenAI, bringing ChatGPT integration to Apple apps.

The ChatGPT integration, made possible through the OpenAI collaboration, will be accessible via Siri on iPhones, iPads, and Mac computers.

These and other new AI capabilities, called Apple Intelligence, will be seamlessly integrated into the operating system updates scheduled for release later this year.

With these advancements, Apple aims to catch up with competitors like Microsoft and Google’s Alphabet, who have already started incorporating generative AI into their key products.

Apple’s shares have lagged behind those of its big tech peers over the past year, as stock has seen an increase of just 5%[1]!

Source: Tradingview

In comparison, Microsoft’s shares have jumped by around 28%, meanwhile, Alphabet has experienced a gain of over 40% in the same period.

Additionally, Nvidia, a leader in AI chip technology, has seen its shares skyrocket by more than 208% over the last year, reaching a $3 trillion market valuation earlier this month, briefly overtaking Apple in terms of market capitalization.

Microsoft and Google have rapidly integrated generative AI into their product offerings.

Apple has declared that its AI services, such as the latest ChatGPT version from OpenAI, will be provided free of charge, prompting speculation about the company’s strategies for monetizing this advanced technology.

On top of that, the iPhone maker has faced a revenue decline in five of the last six quarters, impacted by diminished smartphone demand and economic slowdowns in China.

Hence, the upcoming iPhone release is critical following three years of tepid sales.

During the pandemic, Apple saw a spike in iPhone sales by introducing 5G technology. Many customers who upgraded their phones during that time are now potential repeat customers, especially if the new AI features prove compelling.

Source: Visible Alpha

The critical issue is whether introducing an AI-enabled iPhone will lead to a significant increase in sales. For the past 12 fiscal years, the iPhone has generated more than half of Apple’s revenue.

AI might be the catalyst Apple needs to break out of this slump and move in a new direction.

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1. Tradingview