Apple opens its AI to developers but keeps its broader ambitions modest

By Stephen Nellis and Kenrick Cai

CUPERTINO, California (Reuters) -Apple announced on Monday a slew of artificial intelligence features including opening up the underlying technology it uses for Apple Intelligence in a modest update of its software and services as it lays the groundwork for future advances.

The presentations at its annual Worldwide Developers Conference focused more on incremental developments, including live translations for phone calls and design changes to its operating systems, that improve everyday life rather than the sweeping ambitions for AI that Apple's rivals are marketing.

A year after it failed to deliver promised AI-based upgrades to key products such as Siri, Apple kept its AI promises to consumers modest, communicating that it could help them with tasks like finding where to buy a jacket similar to one they' have seen online.

Behind the scenes in its tools for developers, Apple hinted at a strategy of offering its own tools alongside those from rivals, similar to the tack taken by Microsoft last month. Apple software chief Craig Federighi said the company will offer both its own and OpenAI's code completion tools in its key Apple developer software and that the company is opening up the foundational AI model that it uses for some of its own features to third-party developers.

"We're opening up access for any app to tap directly into the on-device, large language model at the core of Apple," Federighi said. 

In an early demonstration of how partners could improve Apple apps, the company added image generation from OpenAI's ChatGPT to its Image Playground app, saying that user data would not be shared with OpenAI without a user's permission.

Apple is facing an unprecedented set of technical and regulatory challenges as some of its key executives kicked off the company's annual software developer conference on Monday.

Shares of Apple, which were flat before the start of the event, closed about 1.2% lower on Monday.   

"In a moment in which the market questions Apple's ability to take any sort of lead in the AI space, the announced features felt incremental at best," Thomas Monteiro, senior analyst at Investing.com, said. Compared with what other big AI companies are introducing, he added, "It just seems that the clock is ticking faster every day for Apple."

As Apple executives discussed new features at the event in Cupertino, California, OpenAI announced a new financial milestone on Monday, reaching $10 billion in annualized revenue run rate as of June. 

While Apple shied away from making big promises of AI improvements for consumers, small touches behind the scenes such as allowing developers to use ChatGPT's code generation tools in its XCode tools, which are required to make apps for Macs and iPhones, showed the company trying to keep pace with what its rivals are offering to software developers.

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Federighi also said Apple plans a design overhaul of all of its operating systems.

Apple's redesign of its operating systems centered on a design it calls "liquid glass" where icons and menus are partially transparent, a step Apple executives said was possible because of the more powerful custom chips in Apple devices versus a decade ago. 

Federighi said the new design will span operating systems for iPhones, Macs and other Apple products. He also said Apple's operating systems will be given year names instead of sequential numbers for each version. That will unify naming conventions that have become confusing because Apple's core operating systems for phones, watches and other devices kicked off at different times, resulting in a smattering of differently numbered operating systems for different products.

In other new features, Apple introduced  "Call Screening" where iPhones will automatically answer calls from an unknown number and ask the caller the purpose of their call. Once the caller states their purpose, the iPhone will show a transcription of the reason for the call, and ring for the owner.

Apple also said it will add live translation to phone calls, as well as allow developers to integrate its live translation technology into their apps. Apple said the caller on the other end of the phone call will not need to have an iPhone for the live translation feature to work.

Apple's Visual Intelligence app - which can help users find a pair of shoes similar to ones at which they have pointed an iPhone camera - will be extended to analyzing items on the iPhone's screen and linked together with apps. Apple gave an example of seeing a jacket online and using the feature to find a similar one for sale on an app already installed in the user's iPhone.

(Reporting by Stephen Nellis and Kenrick Cai in Cupertino, California; Additional reporting by Akash Sriram in Bengaluru; Editing by Kenneth Li and Matthew Lewis)