The challenge of Apple's 'AI for the rest of us' is we don't know what it's for: Morning Brief

Generative AI has been massively hyped for the past year and a half since the introduction of ChatGPT. Most of us, though, aren’t really using it daily beyond AI search results or interacting with an AI chatbot when we contact customer service.

Is Apple’s (AAPL) personalization pitch — "AI for the rest of us" — the long-awaited killer use case?

Investors who bid up the stock to a record on Tuesday (after the shares’ initial lackluster reaction to the AI product announcements on Monday) seem to think so. There are plenty of analysts

who predict the new capabilities will drive an iPhone upgrade cycle. There are plenty more who found the introduction "underwhelming," including Needham’s Laura Martin.

She wrote, "There was nothing we heard during the WWDC keynote that makes us believe that consumers will buy iPhones faster than our current projections. GenAI was the best hope, but fizzled."

Thus far, investors have been willing to bet on a certain level of hype when it comes to AI.

We’ve seen triple-digit gains in Nvidia’s (NVDA) revenue, driven by data center demand centered around AI training. We’ve heard about new AI capabilities touted by corporations from Salesforce (CRM) to Adobe (ADBE) — heck, Taco Bell owner Yum Brands just told us how it’s using AI.

As my colleague Ethan Wolff-Mann wrote in yesterday’s Morning Brief, the case has been made that AI will transform corporate productivity. (Whether it actually will is TBD.)

Apple’s challenge — and Alphabet’s (GOOG, GOOGL), and Microsoft’s (MSFT) — is proving to consumers that they need AI functionality.

Apple might be behind in developing AI, but it has the best shot of integrating it into devices that are in our faces all day long.

An estimated 1.5 billion people have iPhones. Not all of them will have access to the new features, but enough non-Silicon Valley normies will be using them to perhaps understand what AI is good for.

As D.A. Davidson’s Gil Luria told Yahoo Finance, "We're going to go from hundreds of millions of people using generative AI to billions of people."

He says the killer use case is here: "When you can tell the device, 'Hey, when is my dad landing? Where can I take him for lunch?' Those are things that only Apple can do. Apple is going to build all that into our experience and allow these experiences to leverage our own information in order to execute tasks as an agent that puts them in the lead."

If he’s right, then using will be believing.