Why does Apple talk so little about AI?

In the current AI boom, AI has become a buzzword for every tech company. However, it seems that Apple is an exception.

During the earnings conference call this week, Alphabet CEO Sundar Pichai and his team mentioned "AI" 66 times; Microsoft CEO Satya Nadella and executives mentioned it 47 times; and Meta's management mentioned it 42 times.

But Apple hardly talked about artificial intelligence, and the market should not expect to hear much about AI in the company's earnings report next week.

Its calm attitude towards new technology is in stark contrast to its competitors. In Apple's earnings conference call in May, CEO Tim Cook mentioned artificial intelligence only twice, and it was in response to questions. In Apple's two-hour software release event in June, despite announcing several new features driven by AI, the company's executives never even mentioned the term.

Although Apple doesn't talk much about AI, it actually applies AI a lot in practice.

Apple executives use the term "machine learning," which is more favored by scholars and practitioners. Compared to other tech companies that describe AI as a technology that can do anything and almost like magic, Apple executives prefer to talk about what their software does for users, such as organizing photos, improving typing systems, or editing PDF files.

Apple treats AI as a core underlying component rather than a tool to depict the future, representing another way to showcase this technology to consumers. Apple's AI runs in the background, and the company doesn't need to shout about it like some other companies do.

A careful observation of the executives' remarks during this week's earnings conference call reveals that while Meta, Microsoft, and Google are eager to provide tools for consumers caught up in the AI gold rush, such as cloud services and developer tools, it is still unclear how AI will change these companies' most important businesses and products, and when the benefits of AI will start to be reflected in their earnings reports. These large tech companies have all expressed in their earnings calls that the positive impact of AI products on their financial performance may take some time.

In the eyes of some analysts, it is actually a better strategy for large tech companies to slowly roll out related products in the early stages of a new technology boom. According to research by analysis firm Gartner, many industry insiders believe that new foundational technologies go through a "hype cycle":

According to the hype cycle model, when a new technology is introduced, it receives a lot of attention and investment as it reaches the "peak of inflated expectations." However, as the deployment of the technology lags behind the initial expectations, enthusiasm and investment wane before it matures and becomes productive, entering the "trough of disillusionment."

NVIDIA's stock price has risen 220% this year as investors have realized the crucial importance of its graphics processing units for AI technology. But if everyday consumer applications of artificial intelligence fail to become popular, many AI companies may once again fall into a disappointing slump. For example, analysts earlier this month found that the download volume of OpenAI's iOS application has slowed down since its launch in May.

Some analysts are beginning to realize that investment opportunities based on new AI products will not materialize immediately, and if companies invest in this direction, it may lead to increased costs.

JPMorgan believes:

We remind investors that the process of converting early demand into large-scale implementation and confirmed revenue will be a multi-year trend rather than an instant transformation.

UBS believes that generative AI is still a "mystery" for Google:

Google's management is optimistic about the ability to provide 'deeper and broader' solutions through search-generated experiences, but we do not believe the company has overcome its challenges yet.

When Apple announces its earnings report next week, considering the industry's obsession, analysts may pressure them to disclose their AI plans. However, the market expects that Apple is unlikely to discuss its AI plans in as much detail as its major competitors.

During the last Apple earnings conference call, when asked about this technology, Cook said:

We believe that artificial intelligence is very important, and we will continue to carefully integrate it into our products.