Image source: Generated by Unbounded AI
Author｜Du Zhiqiang
After delivering three consecutive quarters of negative growth, Apple's market value fell to $3 trillion.
Last Friday, Apple’s market value evaporated more than one trillion yuan in one day, and the 4.8% drop also hit the largest one-day drop since September last year. In the trading of U.S. stocks on August 7, Apple’s stock price fell by 1.73%, and its market value evaporated again by 50 billion U.S. dollars.
The decline of the iPhone has made it difficult for Apple's performance to improve. Analysts at Wells Fargo had expected Apple's latest comments on its artificial intelligence aspirations to take center stage, with any commentary on the technology likely to boost the stock.
Although Cook did not mention AI in a long speech at the performance meeting, Apple is stepping up the recruitment of AI large model developers. A few days ago, it was reported that Apple poached many large-scale model-related researchers from Meta, and is actively recruiting large-scale language model engineers around the world.
After Huawei builds the AI large model into the Hongmeng system, Apple will also accelerate the application of the large model on end products such as the iPhone under the premise of ensuring user privacy and security. And this may also become a "new antidote" for Apple to reverse its performance and stock price.
01
big model era,
Apple "slow half a beat"
Looking at the global market, Apple has always been the benchmark for technology companies. But this time, in the age of big-model orgies, Apple was left behind.
In the past six months, whether it was Google's I/O developer conference or Microsoft's Build developer conference, AI has become the focus of the stage, and related products have also been applied in various vertical fields. Last month, Meta launched Llama 2, the commercial version of the open source artificial intelligence model Llama, which contains three parameter types of 7 billion, 13 billion and 70 billion, and is free for commercial or research use. Qualcomm has also reached a cooperation with Meta to accelerate the application process of large models in mobile phones and other terminals.
In contrast, Apple's large model only exists in various revelations and fantasies of the outside world.
The latest financial report shows that in the second quarter, Apple’s revenue was 81.8 billion US dollars, down 1.4% year-on-year. Net revenue from products was US$60.584 billion, a year-on-year decrease of 4.4%. Among the five major markets, only Greater China and the European market have achieved positive growth.
From the latest financial report for the second quarter, we can see that hardware is still the core of Apple's revenue, and the iPhone accounts for half of it. However, under the downward cycle of consumer electronics, Apple has not been spared, and its performance has been greatly affected. In the second quarter, iPhone revenue was US$39.67 billion, a year-on-year decrease of 2.4%, lower than analysts’ expectations of US$39.9 billion, and its share of total revenue also dropped to 48.5%.
Proportion of each product’s revenue, as drawn by Titanium Media App
Just when investors wanted to hear about Apple's AI-related plans and investments, Cook did not take the initiative to mention it at the performance meeting. Just answering investors' questions, he said that Apple has been researching generative artificial intelligence for many years, and regards AI and machine learning as basic core technologies, which are embedded in almost every product. It will continue to invest and innovate, and use these responsibly Technology advances our products.
Previously, at the performance meeting in the first quarter, when talking about AI, Cook only said, "The development potential of this technology is obviously very interesting, but the addition and use of certain technologies should be taken in a very prudent way."
Regarding Apple's attitude towards AI, an industry analyst told Titanium Media App that Apple will naturally not give up any technology that can change future development, but based on privacy considerations, until there is no perfect solution, Apple will always be cautious attitude. This is determined by its company values, and it is also one of the reasons why Apple has always been loved by users.
Before the release of the second-quarter financial report, analyst Ming-Chi Kuo said that Apple’s progress in generative artificial intelligence (AIGC) is far behind competitors, so Apple will not talk too much about AI in this earnings conference call . At present, there is no sign that Apple will integrate AI edge computing and hardware products in 2024.
02
Accelerate the recruitment of large-scale model R&D personnel,
Apple can't sit still?
"Actually, Apple prefers to use the term machine learning instead of AIGC or large models," the above-mentioned analyst told Titanium Media App. "Apple has applied AI technology to many products, but it has not been promoted as a core point."
At WWDC in June, Apple mentioned the term machine learning several times. Moreover, behind many new functions, they are also applied to model training. For example, the automatic correction function of iOS 17 uses the Transformer language model. On the journal feature, use on-device machine learning to create personalized recommendations for journals. AirPods Pro can implement an adaptive audio mode through machine learning, automatically adjusting the volume by recognizing the external environment. In the new product Vision Pro, many AI technologies are also used.
Talking about related investments, Cook revealed at the performance meeting that in the next few months, Apple's research and development expenditures for generative AI will further increase.
Perhaps it is the pressure of performance, or it may be that competitors are improving too fast, Apple has accelerated the recruitment of large-scale model researchers. It is reported that Apple has a small AI research institute in Paris, and has recruited many related R&D personnel from Meta, and is currently recruiting talents in the AI field on a large scale.
It is also reported that Apple has established its own large language model framework "Ajax" and applied it to functions such as maps and siri. At the same time, Apple is also secretly developing Apple GPT, an artificial intelligence tool based on Apple's self-developed Ajax framework, a chat tool and human service similar to ChatGPT, and has been put into limited use within a small number of Apple employees.
Image source: Apple official website
Titanium Media App found from Apple's official website that there are more than 600 recruitment needs related to large language models, which is enough to prove that Apple has been making relevant investment and research and development. Analysts pointed out that, just like market rumors, Apple is also in a hurry internally, but before it is perfect, there is a high probability that it will not be released on the market.
03
The market value has evaporated by more than one trillion yuan
Apple urgently needs a "new antidote"
Regarding the current mobile phone market, Canalys research analyst Zhong Xiaolei once told Titanium Media App, "The recovery node of the entire industry has been delayed. next year."
Perhaps, until consumer electronics returns to the track of positive growth, only AI big models can excite the market.
Last week, Huawei released the HarmonyOS 4 system at the developer conference. Through the blessing of the Pangu large model, the smart assistant Xiaoyi will have the ability of AI large models to bring a more intelligent experience. Previously, chip manufacturers including Qualcomm and MediaTek also expressed their positive attitude towards large models.
For Google, there is a version of PaLM 2 available for mobile terminals. In the future Android ecosystem, AI will be an indispensable part.
The process of mobile large-scale models is accelerating. It is conceivable that by the end of the year, consumers may be able to use smartphones with large-scale model capabilities on the terminal side. And this may be what Apple is anxious about, and it is also where the capital market is dissatisfied with the "slow" progress of Apple's large-scale model.
In fact, compared with other mobile phone brands, Apple's ecological advantages in chips and systems should be the pioneer of the mobile application model. From iOS to A-series processors, Apple’s self-developed system will be more efficient, unlike Android mobile phone brands that have to wait for the integration and adaptation of the system and chip side.
From the recent recruitment, it can be seen that Apple is also accelerating the large-scale model, and expects to accelerate the introduction of generative AI technology into the mobile terminal. However, based on various considerations such as privacy and security, more balance has to be made. However, all kinds of news are flying all over the sky now, and they all come from various channels. Apple itself has not responded too much positively.
After Apple released its second-quarter financial report, many analysts still believe that Apple has great potential in the future. Compared with Android phones, it has a stronger anti-cyclical ability and gave it an overweight rating. However, the market value evaporated one trillion yuan in two trading days, and the attitude of the capital market was very firm.
As for the upcoming iPhone 15, Ming-Chi Kuo predicts that demand will be lower than the iPhone 14 series.
At that time, if the market is as predicted, the only thing that can save Apple's performance and stock price is the big model.
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