Apple is far behind in artificial intelligence. At least that's how I feel every time I use Siri. He doesn't respond to my commands, he doesn't understand what I say, disaster. I guess Wall Street thinks so too, as Apple stock has been punished particularly harshly since the beginning of the year. Other big players in artificial intelligence, Nvidia, Microsoft, Amazon, are excited and leaving. By contrast, Apple's stock has been declining since the beginning of the year. In fact, Magnificent is one of the worst performers in the 7, along with Tesla and Google, and to make matters worse, analysts say the stock could fall even further. Because, first of all, Apple cannot grow. The mobile phone market is saturated. The growth in other devices is not enough for Apple.

There is still a long way to go before the new and ambitious product, Vision pro, is reflected in the turnover. Because of this, turnover is declining, and on the other hand, the perception of being left behind in artificial intelligence is very important. Because in artificial intelligence, there is a feeling that whoever wins the game will win everything, and everyone else will lose everything. The rivals are not resting either. Especially Samsung's latest device, Galaxy S24 Ultra, attracted a lot of attention. Because it has some artificial intelligence features and it attracted a lot of attention. This reinforced the feeling that Apple was falling behind. So, will Apple, which has the world's most profitable, highest cash flow and strongest brand with 2.2 billion users, really accept defeat? Or is Apple as calm as ever, but in deep preparation? In my opinion, we will see the fruits of this deep preparation at the second Apple developers conference in June 2024.

I believe that we will feel artificial intelligence strongly in both the new update of the operating system, iOS 18, and the new mobile phone, iPhone 16, and we will gain important information about how Apple will introduce artificial intelligence into our daily lives. We can never separate our mobile phones from us. His becoming very intelligent could have very interesting consequences. It really has a life-changing aspect in this respect, and on the other hand, when we look at it from the perspective of an investor, Apple's stock, which has been suffering for a long time, may be a little more active after the positive developments regarding artificial intelligence. We will look at the technological aspect of the business and how it can generate income for the company, I am sure it will interest you.

If you are someone who follows Apple closely like me, you already know that it gives a lot of clues about artificial intelligence. Tim Cook himself says this a lot. We have been preparing for artificial intelligence for a long time, he says. But we are never in a hurry. When we look at the artificial intelligence applications currently on the market, we see that they sometimes experience hallucinations, have security problems, and provide incorrect information. That's why we didn't rush. He says, "We are trying to develop an artificial intelligence that is safer, provides more accurate information in our own way, and that people can access in the palm of their hand." Tim Cook doesn't just talk.

Meanwhile, it also spends serious money on artificial intelligence. They make artificial intelligence startup acquisitions worth around $1 billion a year. They are far ahead of both Google and Microsoft in this regard. For example, Xnor is among the companies they bought. They gave 200 million dollars. He's trying to make artificial intelligence more efficient. Spectral has introduced Apple to the technology that clears the image behind you in videos. Such acquisitions continue and Apple is the most ambitious company in this regard.

The news from Mark Gurman from Mac Rumors is also important that they have developed their own big language model called "Ajax", that is, a rival language model to Chat GPT, and that it is already used extensively internally, in a way that this language model can be fully integrated into Apple phones and microchips. It says it has been designed in an optimized way. This was based on around 200 billion parameters. Another news published in the New York Times says that Apple bought news to feed its artificial intelligence program. As you know, lawsuits have been filed against Open AI on this issue. Lawsuits have been filed against Open AI for using news on the internet without anyone's permission and without paying royalties. Apple is always very cautious in these matters and was spending nearly 50 million dollars in this context, and content producers were very positive about this.

Another interesting tip comes from an Apple analyst, Ming-Chi Kuo. Ming-Chi Kuo says that very special changes are being made to the microphone of the iPhone 16s. This will enable phones to become compatible with artificial intelligence. For example, what can they do? In case some words are swallowed or other noise gets in the way while speaking, the microphone integrated with artificial intelligence will clean it while recording. I have a guess like that, and on the other hand, Apple is constantly looking for employees. While many companies in Silicon Valley are laying off employees, Apple is going the opposite way. There is a lot of recruitment in the fields of artificial intelligence, augmented reality and virtual reality. These are, of course, the news that have been appearing on websites such as Mac Rumor recently.

But in fact, Apple has been technologically preparing for artificial intelligence for many years. We know from their microchips. Apple has an initiative called Apple Silicon and m series chips come from this initiative. M1, M2, now the latest M3 and these chips have a special section called neural engine. Neural Engine is a special section that performs artificial intelligence functions such as machine learning and deep learning. Apple has been dealing with this for many years. As a matter of fact, the new MacBook Air 3 series they announced yesterday also includes M3 artificial intelligence chips, and Apple said in the announcement that these are the computers most suitable for artificial intelligence in the world.

Dell has similar efforts. Dell has developed a special GPU, or rather NPU (neural processing unit), for this. Together with Intel, they are also trying to make their computers compatible with artificial intelligence. But Apple's efforts in this regard are quite deep. Today, many functions such as facial recognition are already performed thanks to Apple's artificial intelligence chip, the neural engine. Neural Engine shows us that Apple will approach artificial intelligence in a completely different way. In applications such as Chat GPT that we currently use, artificial intelligence works in giant data centers. In other words, when you place an order, that order is not executed on your computer, it is transferred to the data center. It is processed there and comes back. This is what makes Nvidia rich. Because Nvidia GPUs are the ones that do this job best in those data centers.

Apple, on the other hand, says that we do not need to send data to the center for artificial intelligence. We can do this directly with your mobile phone or computer. Because my chip is suitable for this. So what advantage does this have? The first may be the speed advantage. Instead of sending data to a central location and receiving it back, you perform the entire operation via your mobile phone. Secondly, and perhaps more importantly, there may be a privacy advantage. Because the moment you ask something to chat gpt, that question, your comment, and what you learned become the property of chat gpt. So we are transferring a tremendous amount of data. However, as you know, Apple historically attaches great importance to privacy. Here, that information remains on your mobile phone. They remain private to you.

This is another advantage of having a private stay. You can personalize the artificial intelligence. So, for example, you can determine your own Siri character. You can determine the areas that that Siri character needs to specialize in communicating with you. This will also be a serious revenue model for Apple. I'll get into that in a moment. In addition to all this, less energy consumption is also possible thanks to the optimization of that microchip. As you know, energy consumption is becoming a very important issue in artificial intelligence. In fact, Amazon made an announcement the other day. They were going to build a nuclear power plant for their own data centers. So much energy is consumed. You can use artificial intelligence efficiently on your mobile phone. If it consumes less energy, provides you with a fast and personalized service, this will probably make a huge difference for Apple.

I'm sure this is what's going through your mind. You always talked about technology, what will it benefit us? The first benefit will probably come from Siri. You might hate Siri right now. But a Siri integrated with good artificial intelligence can turn into a real personal assistant. Apple has barely invested in Siri for the last 23 years. Rumors say Apple did this on purpose. We will encounter a brand new Siri combined with artificial intelligence, and Siri will participate very actively in our daily lives. We will give him orders. We will ask him questions. Maybe we will also place orders for him. Because remember, Apple's mobile phone runs on thousands of applications.

For example, when ordering the food cart or shopping, it will be possible to order it via Siri, and you will be able to completely personalize Siri. You will determine the tone and style. You will determine which applications will be integrated with the websites. You will also decide which other Apple applications it will work with, such as photo and video. So, in this respect, I think it will make a very serious difference and I believe that we have an ambitious solution for the first time on the personal assistant side. I don't know if you use the Apple message app a lot, I do. This will probably change with artificial intelligence.

For example, you will be able to automatically reply to incoming messages and write smart answers. You will be able to send different smart images. You will be able to edit the images yourself, accompanied by artificial intelligence. This will also be reflected in Apple's very strong video and photography areas. What you can do there with photos and videos will be greatly enriched thanks to artificial intelligence. And of course, there are Apple productivity apps. I use almost all of them, such as Keynote, Pages, Numbers, which are alternatives to Microsoft. Apple will also do similar things to what Microsoft can do here with copilot.

For example, you will just give an order and Keynote will prepare a presentation for you. For example, with orders, Numbers will make a financial analysis for you. For example, Pages will write an article for you with the orders you give. He will summarize these and combine them. I'm sure everything that happens with Copilot will be reflected in Apple's productivity products. Again, if we make a comparison with Microsoft, they have a platform called Github, where software developers come together, and there is an artificial intelligence application called Copilot that helps write code.

Apple also has X Code, which supports software developers in developing Apps. It will probably get support from artificial intelligence in Xcode, which will make it easier for software developers to write lines of code, and beyond all this, Apple is a huge ecosystem that includes many products from mobile phones to computers, from Apple TV to headphones and watches. Vision Pro is also coming soon. Among all these, I think artificial intelligence will pave the way for very different integrations, and on the other hand, brand new applications that we cannot imagine right now will probably come.

The main reason why Apple made this announcement at the developers conference in June 2024 is that it first opens it to software developers so that they can develop their own applications, just like it did with Vision Pro. I think these are very exciting things. I'm sure an Apple fan like me will enjoy using these. But how will these be reflected in Apple's stock? Because Wall Street doesn't like technology, it says show me the money. There are several dimensions in which Wall Street sees the money.

First of all, I think the renewal of the mobile phone will accelerate. Not only mobile phones, but all our device renewals, tablets, computers, wristwatches and headphones will increase their refresh rates and a very rapid renewal wave will open up before us. The reason is that I have no desire to buy new iPhones for a long time. I'm currently using an iPhone 14, I skipped the 15. I was thinking of skipping 16 as well. But if the 16 comes with artificial intelligence-integrated solutions as I mentioned, I will buy the iPhone 16. Probably both my desktop and laptop are quite new right now. But if a computer comes with brand new solutions where artificial intelligence is super integrated, I will buy it.

I'm sure Apple will encourage us to buy new devices, and this will give a big boost to Apple sales, which have been stagnant for a long time. Here is the first big benefit. The second dimension where Apple can monetize AI is personalized AI. A special Siri for you, a special Number for you, a special Keynote for you, special photo and video applications and a monthly subscription fee of around 5 - 10 dollars for these. Apple has around 2.2 billion users. If only 10% of them subscribed to it, it would be 220 million users. If they started with a price of $10, the net profit would be $2.2 billion every month.

Because this will not cost any extra margins. They add it to their balance sheet. This may be a factor that will increase Apple's value. The third leg, which will create revenue for Apple, is of course brand new applications that we cannot even dream of yet. Apple may develop some of these, some may be developed by independent developers, and these new applications may fascinate us. When Apple just came out, it was super exciting to keep up with new apps. We don't do it much anymore. Because they look very similar to each other. But brand new applications supported by artificial intelligence may perhaps take us to other places.

As you know, Apple can earn serious commission income from these, and lastly, I am very curious about what the Apple ecosystem will gain in total. For example, I'm sure Apple will give me better advice on music. But will he carry this advice into a movie on Apple TV? I think there may be very different integrations between these. I can't imagine enough right now. It's not just Apple that's big on artificial intelligence. Apple has been preparing for this for a very long time.

Of course, a lot can go wrong during a product launch. I'm sure there will be many smart-ass people who won't like these new microchips and applications. But we say that Apple knows this. Apple sounds heavy and slow, but once you do it, it does it right. It is currently the market leader in all product categories it sells. The most profitable company in the world. It comes from a long preparation. This is a matter of death and death for Tim Cook, by the way. During Tim Cook's term, there were not many new products other than Apple headphones and Apple wristwatches.

We are at the very beginning of our journey regarding the latest Vision Pro. There are many criticisms. I'm actually a fan, but we'll see in the coming days. However, the growth impact of Vision Pro will not be as much as artificial intelligence, and when you consider Vision Pro together with artificial intelligence, we actually come to more interesting places. That's why it's a big test for Tim Cook. Let's see what is going to happen. I too am waiting with curiosity and excitement. I hope it caught your interest.

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