How could Apple Benefits from AIGC?
Although $Apple(AAPL)$ did not publicly announce its AIGC plan, but CEO Cook mentioned that the company is investing heavily in it. However, according to $Morgan Stanley(MS)$ , 2024 will be a crucial year for Apple in the field of edge artificial intelligence. This refers to AI work on smartphones and personal computers, not just in data centers. This is mainly due to the improvement of consumption and processing power, especially the A17 Pro chip, which can process 3.5 quadrillion operations per second and handle large language models with billions of parameters.
With unique data from over 2 billion devices and 1.2 billion users, a focus on data privacy, and leading vertical integration of hardware, software, silicon, and services, Apple will be a major player in this field. Integrated AI is expected to be Apple's long-term advantage, increasing the monetization of its products and adding value to its user base.
So what are the potential ways for Apple to generate revenue from generative AI?
The first is through hardware market share growth, where Apple can provide superior AI user experience, thereby increasing iPhone shipments and revenue.
The second way is through services, where Apple can benefit from new users, higher pricing, or new traffic acquisition cost agreements.
The third is through App Store subscriptions, including commissions from generative AI applications such as ChatGPT, which can contribute to monetization.
Finally, Apple can introduce an advanced Siri subscription service that uses generative AI. If Apple charges a $5 monthly Siri subscription fee, every 10% increase in iPhone installation base will generate over $7 billion in high-profit service revenue.
If Siri is updating with large language models that allow users to automate complex tasks.
Although some investors may question how Apple's commitment to AI compares to other tech giants such as $Alphabet(GOOG)$ , $Amazon.com(AMZN)$ , or $Microsoft(MSFT)$ , Apple is poised to become a leader in edge AI. It's just a matter of time before Apple fully embraces this technology.
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