Apple faces the most disruptive threat it has seen in the iPhone era

When Tim Cook disclosed to Wall Street a month ago that Apple would introduce new artificial intelligence features this year, he deviated from the company’s usual practice of not discussing a new technology until it is close to being released. Meanwhile, this week brought news that many of the engineers from Apple’s car project will be reassigned to work on generative AI, following the company’s decision to abandon a decade-long autonomous vehicle effort. In the realm of Apple, where such moves typically remain hidden, this is considered a significant upheaval. Generative AI is rapidly spreading throughout the tech industry, and as the CEO, Cook needs to rally the troops. The company possesses certain advantages in the upcoming battle, but starting late, it may also face the most disruptive threat it has encountered in the era of the iPhone. Apple has focused much of its AI efforts in recent years on utilizing the technology to explore new hardware markets, such as autonomous vehicles and mixed reality headsets. However, with the conclusion of the car project and a slow start for its Vision Pro headset, attention has now shifted back to smartphones. For Apple shareholders, this news will likely be well-received. If the primary battleground for AI is the smartphone, it indicates a new lease of life for the iPhone. AI-driven features could provide consumers with more incentive to upgrade as the technology places additional demands on their devices. The increased use of voice-powered services should also solidify the importance of iPhone “peripherals” like AirPods and the Watch. This suggests a continuation.