Welcome to the podcast. I'm your host, James Shafer. Today on the show, I want to talk about where Apple is in the AI race. Now, if you listen to this podcast for a while, you know that I am famous for kind of begging on Apple, especially considering how it doesn't feel like they've really been at the front of their game and their AI products are always delayed.
But I want to give them a little bit of credit in this episode for some really interesting projects that they're currently working on, the places I think they can catch up, and the places I think they're doing well. Now, I'll also make a case for why they should be doing better in software, but we're going to get into all of that because we actually have some really exciting products that have been elite or talked about. And I think they're actually doing more than you know. And I think they're going to benefit more from the AI boom than most people expect for an absolutely ridiculous reason, but we'll break that all down in a second.
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All right, let's get into what Apple is doing. So over the last couple of weeks, there are some reports from the information, which if you don't know, the information is kind of like the kind of investigative journal place that really says leaks on all of these top companies, especially in AI. It feels like right now Bloomberg also reporting on this. And both of them are suggesting that Apple is really stepping up their development on not one, not two, but three different AI wearables.
And I think some of them are going to be familiar. Others will be brand new products. So right now it looks like they're trying to really build themselves as a space. They've gotten a lot of criticism in the past on how they feel like they've been very slow on the AI software, right?
Apple intelligence and even Siri getting delayed for years and years with a new AI revamp. And then eventually we find out it's just going to get powered by Google Gemini. I think all of that, you know, a lot of people throw a lot of shade at Apple. But in reality, they are doing some really interesting things and I think they want to really make up for all of that with hardware.
So the first product that we can expect is an AI pendant. So imagine like an air take size little device with a camera on it designed to basically clip onto your shirt. This is very similar to what we saw with the recent pendant that came from humane, the humane pin, which had like a projector on it and all this stuff. That was a major flop because it was too expensive and people didn't want it.
I would actually think it'd be kind of crazy to me if Apple just really tries to reboot the same product but a little bit better and it's successful there considering humane was like, you know, saying it was going to replace the iPhone and displace Apple and it had a bunch of Apple designers and employees that went over and made that. That would be very crazy to me. But in any time, in any case, their goal is to make this really small, really discreet and essentially it's deeply tied to your iPhone. So kind of like how the Apple watch is, you know, just sitting there, you can get text messages on it and it's linked very well with your iPhone.
It can do a lot. This is, I think kind of that, but not on your wrist. Not everyone wants a watch. So they're like, I mean, essentially I would imagine it's like an Apple watch, but it's not on your wrist.
You can just clip it on somewhere else. So if this actually ships because they don't always ship everything they work on, it would be Apple's most kind of, I think it'd be their biggest step into having kind of this always on AI that we've heard people remember, you know, they're talking about. So the next product that they're working on is smart glasses. They have internally codenamed these N50, they're reportedly much further along and a lot more ambitious on this.
And most people realize if you read the reports from Bloomberg, it says that Apple is targeting production as early as December this year. And then they're going to be launching them and have a big release next year. And the glasses apparently are going to have really high resolution cameras. They're going to be way more premium of a field.
They're going to be a very kind of rich build compared to some of the other pendants or some of the other things that they're building. And I think that compared to all of that, or even the upgraded AirPods that have been rumored, Apple is really getting to a space that is currently being led by other players. Meta and Snapchat both have Apple devices devices and Google is even working on some as well. But Meta right now is running away with the entire industry, with their Rayban and Oakley's collaboration.
We saw Super Bowl ads for these and Snap is also preparing their next generation of specs. So there is a lot of competition in this. I think this is one that Apple can definitely win. They can make a premium, luxurious, sleek product.
Apple can do really well in the glasses space. And I think especially if they perhaps partner with other players that Meta is not currently working with. So the third thing that they're going to be working on is an AI push for AirPods. They're going to have expanded intelligence.
I mean, if you really think about it, basically if you can just put some sort of tethering to the iPhone, but like all of the Meta products, like the glasses and everything else from Meta that you talk to and it has Meta AI built into your glasses. If you could have that with the same kind of functionality with the AirPods or your Tappy AirPods and you talk to them. I mean, even my headphones that I have from Sony, which came out years and years ago, have a Google Assistant built into them from Google and when Google upgraded the Google Assistant, I automatically got upgraded. And so basically I have kind of this Google Assistant tethered to my phone and I think it runs off my phone's connection where I talk to it and it can give me information now powered by Gemini.
So I think Apple, this is a no brainer. It's not insanely innovative. I mean, old hardware I have from years ago is kind of the one way or another got this upgrade from Google. So I think Apple is trying to get that same functionality with AirPods.
They want basically this AI to be embedded across everywhere. You have it, your ears, your eyes, your chest, right, your chest with this new little pendant thing, which you could think of as I mean, there's a lot of really interesting use cases. And Apple does kind of come out with these crazy hardware plays that end up being really I don't really popular. You can think of air tags just incredibly popular, but kind of a random device.
You could think of something like this pendant could be more like a body cam almost. You can imagine like police or like other government agencies that would be kind of crazy if they all just have these like Apple pendants on. And there's a bunch of interesting use cases also kind of like a GoPro. So I do see a lot of like a lot of interesting use cases there.
So I think this is where things start to get a little bit more complicated and that is when it comes to Siri because Siri has to power all of these devices, right? The headphones, the everything new coming to your iPhone, your glasses, your even this little pendant thing. Siri has to power all of it. It's been promising a huge upgrade or Apple's been promising a huge upgrade to Siri since they rolled out Apple intelligence in 2024.
And since then because you know back then the vision was really clear, right? They're like it's going to be conversational. It's going to be Ellen powered. It's going to be assistant that's like chat, be here, clawed.
It's going to be great into the operating system. So it can open your apps and it's going to you talk to it and it can get you know, context from your emails and your photos and tasks and I know people are like, well, they're trying to be like super secure. That's what's taking them along. Like Google rolled this out on new Android devices two years ago.
Apple definitely could have. I don't give them any passes on being slow on the software side of things. And so the execution has been super smooth on this. So all this to say, I think they have some awesome hardware coming.
It's going to be super cool, innovative brand new products and upgrades for their old products that I'm really excited about. The only thing they really got to stick landing on is the software side they have to nail it. I mean, Siri recently partnered with Google. So Google Gemini is going to be powering Siri.
They're not even going to try to make their own AI model right off the bat that is totally powering these things. And what's interesting is this next gen of Siri, it was originally expected to roll out alongside iOS 6.4, which is coming in March. Apple has like a whole bunch of, you know, news press things saying that they got this big event coming in March and we're assuming it's kind of going to be the latest version of iOS. But according to Bloomberg's Mark Gurman, he was reporting on this and he said that they are going to be a ton of new features and updates that are going to be selected to iOS 27, internal testing reportedly is evaluating some performance and reliability challenges.
But I mean, basically what that is saying is that building a system level AI system that actually works right, Siri is a lot harder than just bolting a chatbot onto an app because the way that they sold it when they first pitched Apple intelligence two years ago was you talked to your iPhone and you're like, Hey, go get me X, Y and Z, go check on this, open my emails, respond to this person is supposed to do it all now. Google was able to figure it out. And a lot of other startups by the way, I mean, even like Claude bought an open cloth, whatever that whole situation for like computers, that's basically what it's doing. It's just not on a phone.
Should be able to figure this out. I'm not giving them a pass on it, but there is, there's some tricky sides to this. So something is unexpectedly happening right now for Apple that is a huge win. All the criticism I keep on them, they actually have a very surprising win.
And that is a software I just mentioned, which is open claw and other tools like it, but open claw recently went super viral. It's an AI agent that you can, it's its own computer. It can take over or sort of its own software that can take over computer. And it was recently the founder and kind of the open source project was acquired by opening eyes and people say for close to a billion dollars after only being around for a few months, but it was just really, really popular.
Now, what's interesting with this is one of the fastest ways that a lot of people were getting this up and running out. I'm sure a lot of developers and hardware people are like, well, you could use Linux and run it on blah, blah, blah, blah, but like for average people that aren't super into all the crazy ways to mod out their hardware, a lot of people were getting the M4 Mac Mini and it is like $599 and they were throwing clawed by onto it. It was super effective. Basically, you don't want to throw this open claw, this clawed by open clawing onto your normal computer because it could like get access to files and things you don't want it to.
But you want to just make it its own computer and give it its very own email. It can go and get a lot of stuff done for you. A lot of people are kind of using it as this open source agent. And the fastest way a lot of people are doing it was just with these Mac Mini 600 bucks.
And I saw reports that these Mac Mini's were sold out at a ton of different locations. And so it's just kind of hilarious to me that Apple might be a massive winner in this whole AI space just because people are using their hardware to run all the AI that is being created, even though they're very slow and behind in software space. So I think this is pretty interesting. The appeal on those Mac Mini specifically to run those is basically that Apple's Silicon unified memory architecture has really strong price of performance if you're doing local inference.
So developers can basically run models without needing a really expensive Nvidia GPU and you also don't have to pay for a lot of cloud fees. Some people are even buying multiple Mac Mini's and building small AI clusters that run continuously. There's one VC firm in particular I've seen that. It's about like 20 of them.
They link them all together on a server rack and they gave each of them like is its own employee and they give them their own email and slack and they ping it on slack and tell it to do things and it goes and compages tasks for them. Apparently it's automated like 10 to 20% of everything they do in their organization. So I mean there's a lot of really interesting things going on, but people are buying these Mac Mini's in bulk to run these tools which is just hilarious to me. So a whole bunch of reports are saying that these are sold out everywhere.
Like I was mentioning, I think this is a pretty ironic Apple is slow and kind of behind on all the software but somehow the hardware is making all their money. And maybe this is a strategy all along. I saw another post recently on X where they were showing the CapEx of some of the top companies. Some of the top tech companies.
There was Google, there was Meta, there was Microsoft and there was Apple and it was showing the CapEx and with this AI boom Google, Meta, Microsoft, all of them have their CapEx is absolutely exploded. You know spending hundreds of billions of dollars below data centers for everything and Apple is just stayed flat. They're just chilling. They're not spending up a ton of money to build these AI products and I think they're just maybe waiting for this way to pass.
And I'm like, hey, look, we'll just partner with Google on whatever we need to get the AI to do and we'll keep kind of doing what we're doing. So this is going to be interesting. All of these updates are setting the stage because Apple is just announced that they have a big march for it's called a special Apple experience and I'm a special Apple event like almost an special Apple experience. No one knows what's going on but they have press gatherings in New York Shanghai and London.
It's not either Cupertino headquarters in California like we often see kind of launches out of. So there's a whole bunch of things that they could be announcing upgrades to the Mac, iPad, maybe iPhone 17E or some of the wearables that we've been heard rumored about some of the Siri upgrades. We're unsure what's actually going to be launched here but Apple I think has an opportunity to catch up. They surprisingly are doing really well with some hardware plays.
I think obviously Apple is transitioning from AI as a feature to AI as infrastructure. Wearables that see and hear is kind of the big thing they're focusing on. Macs that run autonomous agents locally. They're now building other assistance that is trying to replace App paradigm entirely.
We'll see if they actually are successful now since it's two years delayed. But whatever you want to say about them, their hardware is accelerating, their software is pretty slow and I think the race is very much on for Apple. I would not count them out of it. Thank you so much for tuning into the podcast.
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I'll catch you in the next episode.