Apple Has To Transition To Becoming A 'Hardware-AI-Cloud Company' — Mark Gurman Envisions A Future Where iPhones Give Way To Robots

Apple Inc.’s AAPL expansion into artificial intelligence will extend beyond software, facilitating the development of next-generation devices.

What Happened: In his latest installment of the weekly “Power On” newsletter, Bloomberg columnist, Mark Gurman, stated that historically, Apple's devices have adhered to a consistent formula: they boast top-tier hardware and software, complemented by services such as the App Store and iCloud.

However, in the age of AI, that strategy will no longer suffice. Moreover, updating software just once a year won’t be quick enough to stay competitive with rivals. “But it will take time for Apple to evolve,” Gurman said.

See Also: Taiwan Semi Rides AI Wave, Reports $7.1B Revenue In May

He went on to say that the latest AI-centric hardware products, such as the Humane Ai Pin and Rabbit R1, have largely been unsuccessful so far. However, it appears that the technology industry is on the verge of a significant transformation.

“Sooner or later, the traditional smartphone will be supplanted — and it's increasingly clear that some kind of AI-intensive device is the next big thing,” the analyst stated. For Apple to reach this next level, it must transition from its traditional hardware-software-services model to becoming a hardware-AI-cloud company.

Looking ahead, AI will enable potentially game-changing hardware such as home robotics, augmented reality glasses, and intelligent AirPods with cameras. New services like an AI-powered health coach and sensors for monitoring body temperature and glucose are also on the horizon.

Apple is reportedly also developing an Amazon Astro-style robot that can assist with household chores. A Siri revamp is also underway, which could be integral to Apple’s future table-top robot.

However, for these advancements to be possible, Apple needs to quickly progress its work on large language models, the cornerstone of generative AI, to keep up with rivals, Gurman noted. “If it can't do that, it risks falling further behind — not just in AI, but in its core business of building devices.”

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Why It Matters: Previously, Deepwater Asset’s managing partner Gene Munster suggested that Apple’s AI strategy could trigger a three-year iPhone upgrade cycle, potentially leading to a surge in the company's sales. “The most significant positive wild card at WWDC is related to which versions of the iPhone will be able to run AI,” he wrote.

Considering Apple’s reported venture into the realm of personal home robots, Munster and Wedbush analyst Dan Ives, have expressed differing opinions. While Munster has earlier said Apple’s rumored venture into personalized robots would be a natural progression for the company, Ives called the idea a “horror show.”

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Read Next: Apple’s Warranty Updates, iPhone Support Duration, And More: This Week In Apple News

Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.

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