For more than a year Silicon Valley has been buzzing about Apple’s decision to sit on the sidelines during a frenzied AI arms race that has shaken up the tech industry. CNN’s Jon Sarlin and Clare Duffy explore how Apple’s “be best, not first” approach could be a huge risk for the most valuable company in the world.

Apple has announced Apple Intelligence, its new artificial intelligence platform, after a period of waiting while competitors like Google and Microsoft released their own AI products. The company is following its established approach of entering the market later but aiming to offer a more refined and integrated experience, as seen with previous products such as the iPhone and AirPods.

Apple Intelligence will be built into the operating system and services used daily by billions of Apple device owners, focusing on personalization by leveraging users' personal data securely. While many of the features are similar to those already available from competitors, Apple is betting that seamless integration and trusted privacy will set its offering apart. However, there are concerns about whether these features will be compelling enough to drive upgrades to new iPhone models.

This strategy worked for the iPhone. Can Apple do it again with AI?

A year ago, I was at Apple's big developer conference, and the question amongst journalists then was, when is Apple going to enter the AI arms race? They were sitting on the sides as Google and Microsoft released product after product. Well, now, one year later, we see what Apple had been cooking. Introducing Apple Intelligence. So while Apple's competitors have spent these last few years pumping out different AI products to the wild with mixed success, Apple has taken their sweet time. Now, is this a surprise? No. This is actually a core business ethos of Apple. Be best, not first. It happened with iPods. iPods were not the first to the market. Then Steve Jobs came dominating it. You saw it with smartphones. Blackberries were ubiquitous. Then the iPhone came out. Or recent years. Wireless earbuds were popular everywhere in 2015, 2016. A new product from Apple called Apple AirPods. So now Apple is taking that same wait-and-see approach when it comes to Apple Intelligence. We know they're last. The question, though, is, will they be the best? So to answer that, we have CNN's Claire Duffy, who has been following Apple's AI announcement. Claire, we know Apple is last. Do you think, from what you can tell, they are going to be the best? Well, John, look, I think there's a couple ways that we can look at that. On one hand, a lot of the features that they teased are things that we have seen from players like Google and Microsoft and OpenAI. Things like drafting an email or doing AI-generated images. These things are not necessarily new. But what makes Apple Intelligence different is this personalization aspect. Apple is unique in that it's one of the few companies that we trust with so much of our personal data. My text messages, my emails, my photos, all of that information Apple has, and Apple Intelligence is going to use that to inform its responses and to learn about me over time. So, you know, we've seen Google and Meta and Microsoft, all of Apple's competitors, release all of these AI products that kind of mixed results. Apple's saying their products are going to be, you know, sanded down at the edges and they're going to be useful. Do you think it reaches that bar? Yeah, I think that, look, the thing about Apple is that there are billions of people that use these devices and Apple Intelligence is just built organically into the operating system, into the fabric of these Apple services that we use every day. And so I think just that ease of access, that you're not going to have to go and download a special app or go seek out these services, they're just going to be right there on the products that you use every day. That in and of itself is going to make these things more useful. So we know about, like, Apple's success with this strategy, with the iPhone, iPods, AirPods. But what about the potential risks? I mean, they're late here. Do you think there is a risk they are too late to the game when it comes here? I do think there is a real risk. And look, it's not just Apple being the best at AI. There's a lot riding on this technology. Apple really needs Apple Intelligence to sell iPhones. Apple hasn't given consumers a really killer feature that encourages them to buy and upgrade their iPhone in about four years. And so iPhone sales have slid. Apple really needs this to be the thing that gets people to buy the iPhone 16 in the fall. I do think there's a good chance that's going to happen, in part because Apple Intelligence is only going to be accessible if you have an iPhone 15 Pro or if you upgrade to the iPhone 16. But the concern for me is, are people going to look at these features that Apple rolled out and say, I've already been using these things elsewhere. I can use OpenAI's chat GPT. I'm using them on Google Gemini. And is that going to make it not exciting enough for people to want to upgrade to a new iPhone in order to get these Apple AI features?

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