My column today is a collaboration with my cofounder, Dave Elkington, the CEO of InsideSales.com.
Did you see the headlines like I did? “Apple’s first revenue drop since 2001.” It was October of last year and as I read I couldn’t help but think, “How did it happen?” The news outlets said the drop was mainly due to weak sales of Apple’s flagship product, the iPhone, which declined nearly 13% year over year. But I felt there was something else, even bigger, at play.
Nearly a decade ago, Apple was the company defining new categories of products. It transformed the music industry, introduced touch screens on a new cellular device, and had competitors trying to mimic the design and sophistication of its laptops.
Times have changed. When you think of category-defining names, products like Amazon Echo and Tesla’s self-driving Model S or Google’s purchase of DeepMind come to mind. Apple is nowhere to be found and the purchase of Beats Music didn’t help. Apple has gone silent on their self-driving cars and seems to have made no progress on virtual reality. Where did they go?
Then came this week’s product launch. There was a theme through the entire event that many have missed. “Neural engine,” “AI,” and “machine learning” were used in various forms throughout the day, especially in the first few minutes of their biggest announcement of the iPhone X where they used these terms at least 10 times. To be clear, it’s not the first time that Apple has gone down this path, but when it comes to AI, Apple has been lagging behind. A WSJ report notes that Apple has only published four research papers on AI while major players like Microsoft and Google produced dozens. In our InsideSales.com survey of 1,985 individuals across the U.S. and Europe, Google beat Apple in brands consumers trust in regard to AI by nearly 20%.
Apple is notoriously secretive. So, if there was ever a coming out party on the topic of AI, in my opinion, this week’s product launch event was it. Apple has staked its claim and its future on AI with a myriad of AI-powered features from facial recognition with its applications of neural networks in animated emojis to live lighting adjustments in photographs and the introduction of a new custom-built chip called A11–a neural engine that can process 600 billion operations a second.
AI is the future, and Apple (along with every other big company) knows it. The key to success with AI is not fancy algorithms or boring research. It’s working in lock step with consumers to make their lives easier. Our reports show that 70% of consumers say they believe the biggest impact of AI is in the life-simplifying features such as streamlining workflows. Apple is on to a significant principle here. If they can pull it off, they have the market share to do something special. And here’s the message to entrepreneurs: Apple may not be first with AI, but who says you have to be first to be best? It will be interesting to observe their progress from here.
