Apple Plays AI Catchup in Hopes of Creating New Mobile Commerce Frontier

Apple is gearing up to launch “Apple Intelligence,” a sweeping artificial intelligence (AI) initiative that experts say could rewrite the rules of digital commerce.

The tech giant’s push comes as Silicon Valley wages an AI arms race. Google is integrating AI into its search engine, Microsoft is infusing it into Office, and Meta is implementing it across social media platforms. Apple, however, has been notably quiet on the AI front — until now.

“Apple’s AI integration could bring us closer to the concept of a true AI assistant — something that’s portable, convenient and seamlessly integrated into our daily lives,” Ryan Waite, vice president of public affairs at Think Big, told PYMNTS. “While we’ve seen attempts at this with devices like Rabbit, they haven’t fully delivered on the promise.”

At the core of Apple Intelligence is a suite of AI-powered features designed to enhance iOS functionality. Central to this is a significantly upgraded version of Siri, bolstered by a partnership with OpenAI, the creator of ChatGPT. This collaboration is expected to improve Siri’s natural language processing capabilities, enabling more complex and context-aware interactions.

The first iteration of iOS 18 will debut alongside Apple’s iPhone 16 models in September. However, the full range of AI features is slated for the iOS 18.1 update, expected in mid-to-late October. Initial offerings include AI-enhanced writing tools, context-aware reply suggestions in the Messages app, email summarization capabilities and real-time phone call transcription.

More advanced features are on the horizon. “Image Playground,” an AI-powered image creation and editing tool, is expected to launch in early 2025. This will be accompanied by “Genmoji,” a feature allowing users to create custom emojis using AI technology.

“With Apple’s AI in your iPhone, shopping could be revolutionized similarly to how Amazon transformed book buying,” Waite said. “The key disruption would be reducing friction in the purchasing process and offering hyper-personalized experiences.”

iPhone AI for Mobile Commerce

Imagine entering a store, and your iPhone recognizes your location, pulls up your size preferences, cross-references with current inventory and suggests items you might like — all before you’ve reached the first display. This level of personalization could significantly alter the retail landscape.

But it’s not just about shopping. Apple Pay, the company’s mobile wallet, is set for an AI makeover, too. “There’s a huge opportunity for Apple to change consumer spending behavior and take its mobile wallet to the next level by integrating it into its core AI strategy,” Darryl Cumming, director of product management at payments solutions company NMI, told PYMNTS. “OpenAI is only the beginning.”

Integrating AI with Apple Pay could lead to more intuitive, context-aware financial experiences. Potential features include AI-driven budgeting advice, real-time spending analysis and even predictive purchasing based on user habits.

“We should expect consumer choices in the Apple universe to be amplified and channeled into more App Store purchases and commerce personalization,” Cumming said.

However, before this AI utopia can be realized, Apple must address a significant challenge: privacy. The company has long positioned itself as the guardian of user data. AI requires vast amounts of personal information to function effectively, creating tension between AI capabilities and privacy protection.

“The data collected to fuel any personalized shopping experience will be extremely valuable, not just to Apple, but to any entity interested in selling products or services,” Waite warned.

Apple’s proposed solution includes on-device processing for many AI tasks and new visual cues to indicate when Siri is active. Questions still need to be answered about whether these measures will be sufficient to maintain user trust.

New Revenue Possibilities

The stakes are high. If Apple successfully navigates these challenges, it could unlock significant new revenue streams.

“I expect to see a boost in Apple’s partnerships and digital marketing as they look to swarm the tech industry with new AI innovations,” Cumming said. “Apple is in a unique position, via its existing networks and App Store, to enable a new world of AI-driven commerce.”

This AI push could also upend traditional retail and marketing strategies. Personalized AI recommendations could potentially replace conventional advertising methods.

“It’s a shift from push- to pull-based eCommerce,” Waite said. “Instead of brands broadcasting to consumers, consumers will be pulling exactly what they want, when they want it, through AI-powered interfaces.”

The implications extend beyond Apple’s bottom line. The retail landscape may see a fundamental shift, with AI-driven personalization potentially rendering some traditional marketing approaches obsolete. Brands and retailers must adapt to this new paradigm or risk being left behind.

As Apple prepares to roll out these features, the mobile commerce landscape appears poised for significant change. The success of Apple Intelligence will hinge on a delicate balance of technological prowess, user trust and ethical considerations.

“It’s too early to say with certainty, but change is definitely coming,” Cumming said. “It will be a snowball effect — as more big players like Apple commit to making generative AI a part of their core growth strategy, we’re going to see a lot of excitement across the tech industry in the months ahead.”

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