Inside Apple’s big week

Note: Transcripts are automatically generated from episode audio, and are not fully corrected for spelling, grammar, and formatting.

YASMIN GAGNE: I couldn’t remember a time when Apple announced things so far in advance. And I think it’s partly because, you know, on Wall Street, analysts have been saying, like, “Hey, they’re late to the AI game. Where’s the AI? Like, what are we doing?” And they were really saying, “You want the AI? Here it is.”

BOB SAFIAN: That’s Fast Company’s Yasmin Gagne, host of the Most Innovative Companies podcast. I invited Yasmin on the show today to help me unpack key takeaways from Apple’s big conference this week, WWDC. We discuss the company’s long-awaited AI push, its relationship with OpenAI, and the implications for app makers. We also read the tea leaves from the opening keynote on Tim Cook’s future successor, and we debate if we’ve reached ‘peak Apple.’ There’s a lot to cover, so let’s get into it. I’m Bob Safian, and this is Rapid Response. 

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SAFIAN: I’m Bob Safian. I’m here with Fast Company’s Yasmin Gagne, and we’re going to be talking all about Apple and this week’s WWDC. Yasmin, great to be doing this together with you today.

GAGNE: Yeah. Thank you so much for having me on the podcast.

SAFIAN: Did you watch the full keynote? It wasn’t short. 

GAGNE: It was not short. You know what? I’m gonna be honest. I watched part of it, I got a little bored, and then we hit the AI stuff, and I was sort of fully back in.

Copy LinkExploring Apple’s relationship with OpenAI

SAFIAN: Yeah, I mean, a lot of the buzz coming in was about how Apple would enter the AI craze, which it’s been slow to do. And in classic Apple style, they rebranded AI itself, right? Calling their offerings ‘Apple Intelligence.’ Is it clever? Effective? I’m not really sure. 

GAGNE: I thought it was actually really smart. You know, artificial intelligence seems like such a lofty term that no one actually understands. Apple Intelligence, to me, feels like —- hey, this is something you’re going to find on your iPhone, and you’re going to be able to use. And a lot of the features that they premiered were not super impressive, but actually seemed pretty usable, so it seemed like a friendly introduction.

SAFIAN: Well, it’s pretty typical, I guess, for Apple to sort of focus less on the tech and more on the user, right? And what Tim Cook kept saying: “AI that knows you,” “AI for the rest of us,” right? It’s all about the human connection as opposed to, ‘isn’t this a cool gadget?’

GAGNE: Totally. I was really interested, and I still am, in Apple’s relationship with OpenAI, right? So Apple’s whole thing during the presentation, talked about privacy. You know what I mean? They’ve been talking about it forever, right? It’s always like, “your data’s safe with us; we’re not gonna share it with third parties, we’re not gonna serve you ads.” And I think that’s served them pretty well. 

Now, they’re basically doing this thing where most of the AI features on your phone will be from Apple, and they’re gonna try and operate as much as they can from your phone. But for queries, like if you’re using Siri, and you ask them something that for whatever reason, the phone can’t really answer on its own, now they will use OpenAI’s ChatGPT4 to answer it. 

And it’s a really fascinating relationship to me for a couple of reasons. First, you know, it’s not been disclosed. I’ve been curious about how the deal is structured, but they were pretty smart in the way they integrated OpenAI because now they’ve effectively absolved themselves of responsibility when it comes to all the like weird or messed up answers that AI can yield. At every point when OpenAI is used, you will have to agree to it. So it’ll say, “can we use ChatGPT to answer this?” You’ll have to say “yes.” So that it’s very clear that like, whatever messed up answer you get is not going to be Apple’s fault. During the presentation, they said that eventually they hope to be able to incorporate or work with a bunch of large language models. So that could be OpenAI, but that could be others down the road. 

SAFIAN: There was so much attention before the event about the potential partnership with OpenAI that it almost seemed downplayed during the Keynote itself, right? Like there was no Sam Altman moment, right?

GAGNE: Although he was there. 

SAFIAN: He was there, right? But you know, we didn’t see him.

We didn’t hear from him. And I guess this emphasis on privacy that you brought up, like that really was distinctive. I mean, the attention paid to most of this stuff is just going to happen on your phone. The data is never going to leave. If it does, it’s only going to leave to our cloud, to the safety of the Apple universe, right? Which is again, sort of reinforcing, as you said, the position they’ve tried to take to be, “we’re the tech company you can trust.”  

My biggest hope is their embrace of AI, and the combination of that with privacy  is something that adds fuel to keeping AI ethical and responsible and not getting out of control. If Apple has a financial interest in doing that, and they are a conduit to so many other businesses, then maybe it will happen that way. 

GAGNE: Yeah, you’re a far less cynical man than me, I think. Apple’s putting a lot of trust in OpenAI to like not harvest the data or do something nefarious like in that agreement, and it’s not an easy decision to make because Sam Altman does not, to me, seem like the most trustworthy guy I would put my faith in, I guess.

SAFIAN: I mean, Apple’s got billions and billions of dollars at stake in maintaining their credibility. And so they are either going to, as you say, distance themselves enough from OpenAI to protect themselves, which they are doing by making you acknowledge and approve before you do something. But also, they have a lot of incentive to make sure that bad stuff doesn’t happen. But I do think they’re trying to make privacy something that differentiates Apple. It also makes Apple’s universe distinctive and maybe anti-competitive, you know, like everything they talked about is better if you have everything in the world of Apple, you know. Right? And of course, that’s what they’ve gotten in trouble with regulators sometimes.  

GAGNE: I mean, I think this will probably have some antitrust implications. One of the things that they mentioned in the presentation that I thought might be a direct response to some of those antitrust issues is now you can use Android iMessage. Which, you know, people have been asking for for years. It was like a small concession. They kind of threw it in and moved on pretty fast. But yeah, I think you’re absolutely right.

Copy LinkThe new & improved Siri

SAFIAN: So I want to ask you about Siri. Like, Siri was sort of the proto AI assistant, but for a lot of us, it sort of failed to live up to that promise. And now, they’re kind of talking about it as like, the new Siri is going to be your personal AI bot. 

GAGNE: I actually looked up when Siri started, and it’s way older than I thought it was, you know what I mean? I think it’s like 10-plus years old, and I was like, “damn, they really never improved this thing.” 

One thing I’ll say is that every big company that’s doing AI, like Microsoft and Google, all seem to think that there’s one way to do it. And that is summarizing your emails. You know what I mean? There’s like every time there’s a feature, it’s like, “Hey, you won’t have to read your text messages anymore.” And I always think of this scenario where somebody, you know, I might send an email to someone, they’ll reply using AI, and it’ll just be like a conversation between two bots where we never actually really interact with each other.

It’s not that it’s not cool. I guess I just don’t know how useful it is. Maybe the tone, you know, it will work on your tone if you’re being too much of a dick over email. And I do appreciate that. 

SAFIAN: I did think some of the Siri things, like the idea that I could say, you know, you send me a text and I could say, “Oh, add that address to my contacts.” Or, you know, some of the photo stuff, “show me a picture of me and my kid at the beach when they were eight,” you know, like some of those things would be super useful. I think again from that personal point of view, right?

GAGNE: Um, you know, the example — “hey Siri, like I want to book a beach vacation. Can you help me?” And they would be able to, you know, through all your data be like, ‘wow, she really doesn’t like to spend money on flights. You know what? The cheapest time to fly is this time, and she should take an Uber to the airport, and she should stay in this kind of boutique hotel because from all the context that we have, that’s what she prefers.’ I mean, that’s kind of amazing, right? We’ll see how it actually works. I mean, it’s going to be a while before these things come through. So we’ll see.

Copy LinkHave we reached peak Apple?

SAFIAN: Yes, we do have to wait a while to put all these announcements into action, and you need the newest devices, right? A lot of these new tools won’t be rolling out until the fall or later. So there is a little bit of like, ‘trust me’ in all of this.

I mean, earlier in the year after iPhone sales dipped in China and elsewhere, there was a bit of fear that we’d reached peak Apple, you know, that sort of its best days were behind it, and it had lost some creativity, and it was behind on AI. And it seems like this week’s announcement has been interpreted as like a snapback, like, “oh, maybe there’s more juice in the tank than we thought.” Like there’s more road they can run with it.

GAGNE: I absolutely think that’s the case. My colleague Mark Wilson wrote a very solid essay for us, called, ‘Apple is no longer a design-led company.’  It was about how so many designers left the company. Jony Ive was no longer there. And that point really got hammered home to me when they were showing how you can change the colors of your icons. Because to me, one great thing that Apple’s always done is to say, like, “no, you have bad taste, and we know what’s best,” you know? And like, “this is how it should look.” And now they’re giving people more and more options to customize things. And if the examples that Apple is showing are ugly, like, imagine what you and I would make. 

SAFIAN: Yasmin’s point about Apple deferring to users is really interesting. They’ve always walked a fine line between being user-friendly and being high-style. If they cede too much of their design polish in the post-Jony Ive era, does that indicate a lack of confidence or something else? 

After the break, Yasmin and I break down Apple’s new features, and dig into how the evolution of Siri is an indication of where AI is heading. Stay with us.

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SAFIAN: Before the break, Fast Company’s Yasmin Gagne and I explored the high-stakes partnership between Apple and OpenAI, and how this week’s WWDC sought to turn around what had been a tricky year for Apple. Now, we discuss new features that were announced, the impact on other app-based businesses, Tim Cook’s status, and more. Let’s dive back in. 

Copy LinkAre some of the new Apple features app killers?

A bunch of the new features are things that others have already come out with. Creating custom emojis and images. Like, yeah, you mean like I can do on Dall-E or Midjourney, right? Or you know, you can take your email and have it be rewritten and check the grammar. Like, isn’t that what Grammarly does? But I also don’t know whether if you’re Midjourney or if you’re Grammarly, are you suddenly like, “oh man, what I thought was a business is now just a feature, and am I in trouble?”

GAGNE: I mean, I think some stuff like the image generation is like, Dall-E is far more sophisticated, right? And Apple simplified its product by design so lay people could use it. And maybe there’s a point where like the layperson, the expert sort of converges into one user. But right now that’s not the case. My parents are never going to figure out Dall-E. 

But I think potentially the bigger concern for some of these apps or if you’re an app that makes a lot of money from serving ads to customers, and they’re now just asking Siri to pull up or book for you, you know? If those ads are not receiving eyeballs anymore, I think it could change the way that a lot of these companies make money. So I don’t totally know where we stand in terms of whether this is like an app killer, but I do think a lot of app-based companies are going to get anxious about this. If you say, “Hey Siri, can you book me a car?” Uber and Lyft are going to be wondering which one Siri just picks and automatically goes for, so a lot of companies will be probably rethinking how they get information to you in some way. You know? I guarantee you we’ll all be talking about how to game the Apple notifications to get up there first.

SAFIAN: I mean, I think part of the reason they did this at WWDC is because they are hoping that app developers embrace the APIs, the tools that Apple has, and in some ways, that they offer to some of the smaller organizations that like you can have AI built into what you’re creating without you having to do all the hard work — like we’ve done it for you.

And if that works, then there’s going to be an ecosystem of even more apps that can do even more, right? That has been Apple’s trick, is like, you get the phone, but what you do on the phone isn’t all what Apple creates until they see something that you use a lot of, like a map. And then they say, “Oh, we’ve got to create one of those,” you know? 

Copy LinkWill we interface with tech through sound?

GAGNE: I am curious, I want to get your take on this. It seems like if things go well, we’ll be moving more towards an oral-based or like sound-based way of navigating through the world. And I was just sitting there imagining like, you know, I’m not one of those people who talks into my phone on the subway. And I was like, am I going to be one of those people? What do you think about that?

SAFIAN: It’s a great question. There’s sort of an irony to it because on the one hand, you’re right, it is very audio-based, sound-based. On the other hand, they announced a feature where you can just nod your head when you have your earpods in, and it’ll, you know, accept or reject the call and things like that. So you don’t have to talk on the subway or in an elevator. 

I did have a discussion with Brian Chesky, the Airbnb CEO, a couple of weeks ago about the partnership that he has with Jony Ive, and they’re working on a different kind of interface for AI. And he was pretty adamant that he, again, as a designer feels like the future interface is not chat, which is the way AI has been before this, and is not audio or not those things alone, but include some visual elements too. But you know, I don’t think any of that has been created yet. His argument was that every new technology, we come up with the right form factor for that. And right now we’re trying to retrofit form factors to this, and we haven’t done it. 

Copy LinkTim Cook’s successor at Apple?

So one thing I noticed in the keynote was the amount of airtime given to Apple software SVP Craig Federighi. Is there any tea leaf reading in that? Like about who might be the next CEO of Apple after Tim Cook?

GAGNE: It’s funny. Tim Cook stated that they had a detailed succession plan on Dua Lipa’s podcast. And I was like, “you know, you got two podcasters here who would love that news, but sure.”

I do think Cook is getting up there. Apple likes to hire from within its ranks. I think he seems like a pretty strong candidate. He’s also not too old, you know, and Wall Street will want a CEO that will be there for a decade-plus, right? You know, any CEO change is obviously a big scary moment at a public company. Apple makes a lot of money through hardware, but if the software can persuade people to buy that hardware, you know, that’s amazing. So you know, I think it’s very possible that he’s in line for succession.

SAFIAN: I don’t know if you noticed this, but in one of the transitions, he shows off some serious parkour moves. He’s like jumping up and down, up and down a stairway. And with the parachuting, with the other antics that were like between the different bumpers. I’m not quite sure the tone that Apple was trying to strike, like, was it trying to be funny? Or did they actually think it was cool?

GAGNE: You know, combo of both. I was thinking about, you know, the Tim Cook stunt. I was like remembering when Sergey Brin, he was really into doing his stunts, like jumping off a plane or whatever. And I was like, maybe this is just table stakes now for these presentations, I guess. But Federighi was not someone I was super familiar with. Everybody calls him goofy. Like, every publication is like, ‘Ah, he’s kind of goofy.’ So maybe that’s just his personal brand?

But Apple is like, historically not the company I would be like, ‘they’re funny and cool.’ Maybe they’re cool, but they’re not that funny.

Copy LinkApple vs Android?

SAFIAN: Are you an Apple person, or are you more of an Android person? Like what’s your background with this?  

GAGNE: I’m an Apple person. And I remember in college, you know, there was always this joke of like, if a guy texts you and the bubble comes out green, like, no dice, he’s a scrub. And I think I still subscribe to that, maybe? But I was gonna say, my father was a lawyer for Microsoft when I was growing up. And so we had to adopt the Zune in our household, had to adopt Microsoft phones for a little while. You know, like, I have experienced other interfaces, and I feel like there’s no device that I ever got more value out of than an Apple product.

SAFIAN: Well, Yasmin, it’s been great talking to you about this. Thanks so much for spending the time. 

GAGNE: Thanks so much for having me.

SAFIAN: Apple remains one of the most fascinating businesses around. In what other industry is the highest price player also the biggest? That just doesn’t happen. What I find myself reflecting on after my conversation with Yasmin is how AI offers Apple the opportunity to extend that status – but they’ve got a lot of details to get right between here and there. Will Siri become an indispensable assistant? Will Apple’s privacy efforts prove valuable and valued? Or will someone else get all the pieces right first – Samsung, Microsoft or a player to be named later? We’ll have to see what tomorrow brings. I’m Bob Safian. Thanks for listening.