A new report from Morgan Stanley concludes that Apple is poised to take advantage of consumers adopting AI-based tools in everyday life, despite saying little about AI publically. While there is a presumption that Apple has fallen behind in the AI race, it has been using AI technologies like Machine Learning in its products for years. Tim Cook recently described AI as a fundamental technology. Investment firm Morgan Stanley believes that Apple is further ahead in the field than it publicly states. As early as 2024, it will become one of six “key beneficiaries in a catalyst year for ‘Edge AI’.”
“Edge AI” is Morgan Stanley’s term for when AI is woven into all computing, providing lower query costs, improved latency, greater personalization, better data security, and easier accessibility to consumers. This AI is expected to be invisibly powering everyday tools. Apple’s data from over 2 billion devices and more than 1.2 billion users is expected to be crucial in the business of AI.
Apple’s devices, particularly its iPhone, are already capable of processing AI on device, and new battery tech, silicon, and edge devices are expected in 2024 to push this further. Apple Silicon will enable a more powerful device to process AI workloads effectively.
Morgan Stanley believes that Siri could be the ultimate “killer AI app” and an emerging AI service at the edge, which will become a critical gateway to many of the brands used today. The company expects AI news at WWDC 2024.
The basic reasons behind Apple’s expected success in AI are its unique data from its massive user base, its leading data privacy focus, and its strong integration of hardware, software, silicon, and services. These give Apple a distinct advantage in the AI industry.
While Morgan Stanley is predicting a profitable future for Apple with AI, it is holding its price target at $210. Apple has been less vocal about its AI ambitions, but based on its historical preference for understanding new technologies before adopting them, Morgan Stanley says that Apple has proven successful in the entry to new technology markets, ultimately growing and profiting from them. The increase in AI-related job postings at Apple also supports Morgan Stanley’s prediction of Apple’s success in AI.