Hua Er Jie Jian Wen·2025-09-04 09:24Core Viewpoint - Apple is in discussions with Google to integrate Google's Gemini large model into the new version of Siri, balancing innovation with market expectations and addressing AI valuation concerns [1][4][12] Group 1: Innovation and Market Pressure - Apple has started late in generative AI, leading to perceptions of inefficiency compared to competitors like Microsoft and Google [2][3] - The market is concerned about the stagnation of iPhone sales, with AI being seen as a crucial breakthrough opportunity [4] - Apple's R&D spending for fiscal year 2024 is projected to reach $31.37 billion, a modest increase of 4.86% from the previous year, raising concerns about the lack of "blockbuster results" [5] Group 2: Financial Implications of Collaboration - If Gemini is embedded in Siri, Apple will face increased capital expenditures for data centers, potentially compressing gross margins in the short term [7] - The collaboration offers Apple a "strategic option," allowing it to keep pace with AI advancements while maintaining flexibility for future developments [8] - For Google, integrating Gemini into Siri could provide a significant distribution channel, transforming R&D spending into revenue opportunities [10] Group 3: Multi-Model Strategy and Market Dynamics - Apple is not solely relying on one partner for generative AI, having also engaged with OpenAI and Anthropic, reflecting a diversified approach similar to its supply chain strategy [11] - The revenue structure of Apple is shifting from hardware to services, with service revenue projected to exceed 24% in fiscal year 2024, indicating potential for new paid services through an enhanced Siri [11] - The capital market's perception of Apple's AI strategy is nuanced, with concerns about over-reliance on external partnerships potentially signaling a lack of innovation [12] Group 4: Regulatory and Competitive Landscape - Apple's cautious approach aligns with financial discipline, as it navigates regulatory challenges related to AI compliance and market competition [12] - The collaboration could redefine industry dynamics, prompting competitors like Samsung and Xiaomi to accelerate their own AI partnerships [15] - The partnership between Apple and Google may lead to a deeper integration of devices and AI models, impacting the broader market structure [16] Group 5: Future Outlook - The outcome of this collaboration remains uncertain, with implications for both companies' competitive positioning and market expectations [13][17] - Apple's decision to partner with Google reflects a pragmatic approach to balancing cost, innovation, and market pressures, aiming to secure its competitive edge while seeking long-term solutions [17]