Asking the right questions on Apple

Marco Arment had an interesting post yesterday on whether Apple is in trouble because of the investments of others, particularly, Google, in AI. He wondered if it would be disrupted in the same way BlackBerry was but Apple itself.

Amazon, Facebook, and Google — especially Google — have all invested heavily in big-data web services and AI for many years, prioritizing them highly, iterating and advancing them constantly, accumulating relevant data, developing effective algorithms, and attracting, developing, and retaining tons of specialized talent.

Saying Apple is “bad at services” in general isn’t accurate — they’re very good at services that move data around in relatively straightforward ways at a very large scale, such as iMessage, push notifications, and the majority of iCloud.

Where Apple suffers is big-data services and AI, such as search, relevance, classification, and complex natural-language queries.1 Apple can do rudimentary versions of all of those, but their competitors — again, especially Google — are far ahead of them, and the gap is only widening.

And Apple is showing worryingly few signs of meaningful improvement or investment in these areas.

Arment identifies AI as a potentially disruptive event. It is what is termed in The Disruption Dilemma as an architectural innovation. AI doesn’t develop the material for search or a different user interface but it changes how all of that stuff is put together in order to be useful for something.

Take Google’s announced Assistant. It leverages what Google already has with regard to its database of information on the web and takes advantage of its expertise in natural language processing to come up with a distinct way of getting information that is different from just querying Google as we do today. That at least is the promise: being able to have a conversation with a knowledgable but artificial thing and find out information.

Of course, we have been here before. In 2011, Apple integrated Siri into its iOS devices (but notably not its computers, not yet anyway). It was conversational. It had natural language processing. But its focus was inward on device control and on the user. It has the same elements as what Google, Facebook and others are doing but it is not the same.

Arment is correct then to focus on this divergence as a big deal. Either Google is right or it is not. The right question to ask is: if it is right, then can Apple survive it?

But if Google’s right, there’s no quick fix. It won’t be enough to buy Siri’s creators again or partner with Yelp for another few years. If Apple needs strong AI and big-data services in the next decade to remain competitive, they need to have already been developing that talent and those assets, in-house, extensively, for years. They need to be a big-data-services company. Their big-data AI services need to be far better, smarter, and more reliable than they are.

Many people do not think Apple is up to the task. Personally, I just don’t know because we know so little about what is going on inside Apple. One thing I am pretty confident is that Apple is aware of all of this. If this post was news to them, then we can all agree it is time to worry about Apple. BlackBerry wasn’t and that is a key distinction.

My best guess is that Apple is actually very well organised to handle potential disruption from the supply-side — that is, an architectural innovation like Google’s AI. But by this I do not mean that it will be smooth sailing. In fact, it could be very rocky and Apple are likely to lag behind in introducing such innovations — something that they have done in the past.

What do we need to look for here? The first is that I am not sure we have seen a dominant design for outward or inward facing AI interfaces. At the moment, natural language is used as a template with the image that we talk to AI like a person. That is all very well but because of the minefield of uncanny valleys in this arena, there is a good chance that instead we will talk to AI in what will look like code. That is, we will learn what it can say and talk to it as if we were talking to a small child. My point is that the dominant design isn’t there and so we do not have a template to consider where the industry will head.

We then need to look at Apple’s reaction to the dominant design. If we can’t see hiring going on related to it then that is a problem for Apple. If the dominant design is controlled and not open, then that is a problem for Apple.

So Arment is right, if this is the future, then Apple has to be (a) aware of it and (b) have some in-house capabilities that can be moulded to it. If, on the other hand, like BlackBerry, they have totally eschewed outward facing AI (and that was the claim many made when Apple extolled the benefits of privacy), then if Google is right, Apple could be in serious trouble. At the moment, I think Apple is likely OK but it will be hardly immune from continual claims of its eventual demise in either case. Like death and taxes, Apples’s doom never goes away.