Why Apple Will Become A Leader In Artificial Intelligence

Apple has shown that it can “come from behind” in AI as it did in mobile processors through acquisitions and R&D.

Apple can exploit synergies through its control of both processor and OS development to field the most compelling mobile AI service.

Apple‘s (NASDAQ:AAPL) acquisition of Turi bolsters its capabilities in machine learning and AI. Apple is following the same pattern it did in acquiring expertise in processor design, which thrust it into a position of leadership in mobile processors within a few years. Apple will pursue leadership in AI with equal vigor because AI is the ultimate killer app.

I had the opportunity to participate in a podcast interview recently with fellow SA contributor Brian Bain, which should be coming out this week. During the interview, I brought up the fact that I expected one of the most significant innovations in the upcoming iPhone 7 to be in the processor. I made the point that processor innovation is often ignored in media coverage of rumors concerning the next iPhone.

Brian questioned whether consumers really care about the details of processor technology, and I had to concede that they most probably don’t. It’s a fundamental problem for Apple: how to translate its processor leadership into tangible benefits that consumers care about. Sure, the processor helps everything work a little better, but it’s not an obvious feature the way an OLED screen is.

At the same time, Apple has been roundly criticized for falling behind its competitors in AI and machine learning. Alphabet’s (NASDAQ:GOOG) (NASDAQ:GOOGL) Google, Amazon (NASDAQ:AMZN), and Microsoft (NASDAQ:MSFT) all have much more robust and useful AI capability baked into their platforms, as I pointed out recently.

SA contributor BayesianLearner has also criticized Apple‘s AI efforts, but wrote a very positive and informative take on the Turi acquisition:

Indeed, perhaps the most significant aspect of Turi’s offerings is that it advertises that its solutions are highly scalable from individual devices to cloud platforms. And if it seems implausible that AI could be hosted on a smartphone, keep in mind that Qualcomm (NASDAQ:QCOM) recently announced a software development kit (SDK) to provide AI and machine learning on its Snapdragon 820 processor.

Turi is just the latest in a string of acquisitions by Apple of companies with expertise or products related to AI. These include the purchase last October of VocalIQ, a UK startup specializing in natural speech recognition, and Perceptio specializing in image recognition. Perceptio is especially interesting in this context because Perceptio’s goals were to implement its algorithms on smartphones, according to Bloomberg. In January, Apple acquired Emotient, specializing in facial expression recognition.

Clearly, Apple‘s ongoing interest in preserving the privacy of its customers, combined with its own processor expertise, make localized AI a natural offering. To some degree, Apple‘s AI services will have to be distributed between individual devices and its cloud services. Search, maps, and AI based recommendations all necessarily have to be cloud based. But localized AI gives Apple‘s powerful mobile processors a raison d’etre that perhaps they have lacked until now.

Apple‘s position in AI reminds me of where it was in mobile processors prior to 2010.