As Samsung Launches... Apple Quietly Strikes Back with 'AI Phone'

M&A, Hiring, Hardware Multidimensional Capability Acquisition
"We Will Not Just Watch the AI Arms Race"

Samsung Electronics has attracted attention by unveiling the world's first 'Artificial Intelligence (AI) phone,' the Galaxy S24 series, while Apple is quietly launching a counterattack.

On the 24th (local time), major foreign media reported that Apple is preparing to equip its next-generation iPhone with AI.

On the 13th, the official domestic release date of the iPhone 15 series, customers are experiencing the products at the Apple Store Myeongdong in Jung-gu, Seoul. Photo by Jinhyung Kang aymsdream@

Apple has been strengthening its AI capabilities from multiple angles, including corporate acquisitions, employee recruitment, and hardware updates. Daniel Ives, Managing Director at Wedbush Securities, stated, "Apple is preparing several important mergers and acquisitions (M&A) because the AI competition is ongoing, and Apple will not just stand by and watch." According to market research firm PitchBook, Apple has been actively acquiring AI startups, having acquired 21 companies since early 2017.

Apple is also expanding its hiring of AI specialists. According to Morgan Stanley, half of Apple's job postings are related to deep learning, which is an essential technology for running generative AI.

While Microsoft (MS), Google, and Amazon have publicly announced investments of billions of dollars in AI, Apple has not disclosed its plans openly. However, according to industry sources, Apple has already begun developing its own large language model (LLM) technology that supports generative AI like ChatGPT. Similar to Samsung Electronics’ introduction of generative AI in the Galaxy S24, it is expected to be on-device AI that runs generative AI on mobile devices rather than in the cloud, operating through both hardware and software. Apple CEO Tim Cook told analysts last summer, "We are conducting extensive AI technology research" and "We are investing responsibly and innovating in new technologies." Igor Yablokov, CEO of Prion, explained, "Apple tends to wait until technologies converge to present the most outstanding model."

Apple has also unveiled new chips equipped with features suitable for running generative AI. In October last year, Apple introduced the M3 Max chip for MacBooks, emphasizing support for AI developers using transformer models with billions of parameters, enabling tasks previously impossible on laptops. Dylan Patel, an analyst at semiconductor consulting firm SemiAnalysis, said, "The chips used in Apple devices are increasingly designed and configured to suit AI."

Additionally, Apple researchers published a paper in December last year detailing a breakthrough in running LLMs on-device using flash memory. In October last year, Apple released 'Perot,' an open-source multimodal LLM specialized in image analysis, developed in collaboration with Columbia University. Unlike existing big tech companies’ LLMs, which recognize reality based on text, Perot can connect text with real-world images. For example, AI can recognize the clothes worn by a video call participant and enable ordering them through an app.

Wall Street is also closely watching Apple’s quiet moves. Although MS briefly surpassed Apple in market capitalization recently, Bank of America (BoA) analysts upgraded Apple’s stock rating last week, expressing expectations that the new generative AI emerging this year and next will accelerate the iPhone upgrade cycle. Laura Martin, Senior Analyst at Needham, said, "Apple’s direction is different from Google and Amazon," adding, "Apple’s AI strategy is aimed at protecting the Apple ecosystem."

According to market research firm IDC, Apple surpassed Samsung Electronics for the first time in 13 years in smartphone shipments last year. In response, Samsung Electronics launched the AI phone Galaxy S24 series to seize market leadership. Market research firm Canalys forecasts that the share of smartphones capable of utilizing AI will increase from 5% of total smartphone shipments this year to 45% by 2027.