ETFs
Bet on “Apple Intelligence” with these ETFs – June 11, 2024
Apple (Quick quote AAPLAAPL – Free report) announced its highly anticipated generative AI initiative called Apple Intelligence on Monday at its WWDC conference in Cupertino, California. Apple Intelligence is positioned as a distinctive offering that understands users and their data.
Updates to its iPhone and Mac operating systems will now provide access to ChatGPT thanks to a partnership with developer OpenAI. ChatGPT can also be used to boost other tools, including text and content generation.
Apple Intelligence will be deeply integrated across the company’s hardware and software products. It will be available for iPhone 15 Pro, iPads, and Macs with Apple’s M1 series chips and newer models starting this fall.
Rearrange Siri with Generative AI
Siri, Apple’s original smartphone voice assistant, is set to receive a significant upgrade with Apple Intelligence. The assistant will feature a new interface, sound more natural, and be more responsive to user commands.
Siri will now answer follow-up questions, handle interruptions, and accept typed text requests. For example, Siri can save addresses from Messages or search for specific photos in the Photos app based on detailed user requests.
Privacy-focused cloud services
Apple has developed a new cloud service called Private Cloud Compute to ensure user privacy. This service uses Apple Silicon with built-in privacy capabilities, determining whether a request can be processed on the device or requires cloud access. Apple assures that no user information will be stored in the cloud.
Comparisons with competitors
Apple’s announcement comes as Wall Street eagerly awaited its entry into generative AI, following Microsoft‘s (MSFT Quick QuoteMSFT – Free report) Bing Chatbot powered by OpenAI (Copilot) and Google‘s (GOOG Quick QuoteGOOG – Free report) , GOOGL) The Bard chatbot, now named Gemini. Meta (Quick quote METAMETA – Free report) has also integrated AI into its platforms through recommendation software and the Meta AI chatbot.
A wall of worry?
First, Apple’s association with ChatGPT received a mixed response. Ben Wood, chief analyst at CCS Insight, and Tesla chief Elon Musk believe that ChatGPT integration could create deeper problems for the company. as quoted on the BBC.
Additionally, Apple’s competitors have faced several issues when it comes to AI. Google’s Bard provided incorrect answers and its Gemini image generator displayed historically inaccurate images. Microsoft’s Copilot+PC standard has raised security concerns, while Meta has been criticized for not allowing users to disable its AI chatbot.
Historically, Apple has thrived on its reputation for security. Therefore, any flaws in its generative AI efforts could harm its brand. Regardless, Apple is so far lagging behind in the AI race among the “magnificent seven.” However, with the release scheduled for September, Apple has time to refine Apple Intelligence and address potential issues.
How to play with ETFs?
Since there are still uncertainties related to the success of Apple’s upcoming AI deployment, it is best to follow the company with the ETF approach. The basket approach minimizes company-specific concentration risks. Apple-intensive ETFs include: Selected Technology Sector SPDR Funds (Quick quote XLKXLK – Free report) , iShares Global Tech ETF (Quick quote IXNIXN – Free report) And iShares US Tech ETF (Quick quote IYWIYW – Free report) .