Apple event - iPhone 16

[Josh]

I have a collection of 4G phones if someone wants to buy them…

[Pelerin]

They are also supposed to have AI features. But I'm kind of puzzled by that since AI is a software feature, not hardware.

It is hardware. They’re running the AI directly on the phone and so have a special processor with different architecture to handle it.

It seems like a gimmick to me when they could just offload it like they have done with Siri from the beginning. Rumor is that some other phones with chips actually do just that anyway (Google’s, I think). I think it was probably set in product planning stone with a dose of corporate groupthink (“they’re doing it so we need to too”) before anyone could tell what direction AI would go in. Generative AI is both widely available and it pretty obviously isn’t actually turning out to be the intelligent sidekick we were initially promised and that these phones were originally intended to become.

It seems insane to add the cost—in terms of both money and physical space—of a whole separate chip that can’t really be used for anything else so my prediction is that this won’t last long, maybe not even to the iPhone 17.

[Josh]

They are also supposed to have AI features. But I'm kind of puzzled by that since AI is a software feature, not hardware.

It is hardware. They’re running the AI directly on the phone and so have a special processor with different architecture to handle it.

It seems like a gimmick to me when they could just offload it like they have done with Siri from the beginning. Rumor is that some other phones with chips actually do just that anyway (Google’s, I think). I think it was probably set in product planning stone with a dose of corporate groupthink (“they’re doing it so we need to too”) before anyone could tell what direction AI would go in. Generative AI is both widely available and it pretty obviously isn’t actually turning out to be the intelligent sidekick we were initially promised and that these phones were originally intended to become.

It seems insane to add the cost—in terms of both money and physical space—of a whole separate chip that can’t really be used for anything else so my prediction is that this won’t last long, maybe not even to the iPhone 17.

The cost of cloud based AI is substantial and mostly is sold at a loss right now and relies on venture capital.

Apple is doing something unique and innovative instead of just being another front end of OpenAI. They have generally taken the approach that they want to sell hardware, like laptops and phones, not try to sell cloud based services.