Source | Bohu Finance (bohuFN)

Two years ago at WWDC, Apple made a significant move.

Apple proudly launched 'Apple Intelligence,' showcasing to the world what an AI smartphone looks like:

Siri will have the ability to understand personal context (reading emails, texts, calendars, and other personal information to answer questions), screen content awareness (understanding and acting on what is currently displayed on the screen), and cross-app operations.

However, the new Siri not only failed to launch with iOS 18 but was repeatedly delayed by Apple until 2025, citing 'internal technical issues.' Craig Federighi, Senior Vice President of Software Engineering, later admitted to The Wall Street Journal that during internal testing, the prototype 'continued to produce too many unreliable results,' with the system only achieving a 60%-80% success rate, failing to meet Apple's product standards.

Due to the delayed delivery of AI features, Apple faced multiple class-action lawsuits and had to agree to pay $250 million to settle with iPhone buyers.

This gap was only filled this year.

At the recent WWDC, Apple teamed up with Google to reconstruct the Apple Intelligence architecture based on the Gemini family. On top of this new architecture, Apple introduced an enhanced Siri AI with contextual understanding and screen awareness, along with multiple system-level AI features.

According to Apple, this represents 'a quantum leap.'

However, these updates did not receive positive feedback. After the event, Apple's stock price fell, and its market value evaporated by over $230 billion. Ultimately, there was no surprise.

Over the past fifteen years, Tim Cook has built upon the solid foundation of 'integrated hardware and software' created by Steve Jobs, growing Apple's market value from $350 billion to $4 trillion. But now, the industry is, to some extent, on the eve of a transition from feature phones to smartphones. As the most important mobile terminal, more and more AI companies are trying to reshape smartphones with AI. Doubao has already set a precedent, and OpenAI is planning its move. With its home nearly being infiltrated, Apple has not yet delivered innovations in AI that are impressive enough.

So, the question arises: Is Apple's first answer sheet for AI smartphones really that bad?

01 The Only Black Mark is Google

If one must find a black mark in this update, it's probably that Apple finally admitted it couldn't handle model capabilities on its own and chose to collaborate with Google. The new generation of Apple Foundation Models is based on the Gemini family, with two models on the device side and three in the cloud.

On the device side, there's the AFM 3 Core with 3 billion parameters for daily lightweight tasks and the more powerful AFM 3 Core Advanced with 20 billion parameters, a sparse model. In the cloud, there's the AFM 3 Cloud for servers, the ADM 3 Cloud specialized in image generation and editing, and the most powerful AFM 3 Cloud Pro.

Although Apple executives said:

'We use zero Google Assistants.'

'All these models are custom-built for Apple Silicon, trained with proprietary data, and fine-tuned using outputs from Gemini's cutting-edge models.'

You can basically understand that the foundation of these new Apple models is Gemini.

Besides that, Apple has done well in other areas.

In the cloud, Apple has consistently upheld its privacy policy. It has built a dedicated cloud computing infrastructure for AI—Private Cloud Compute—where data remains within the domain and is end-to-end encrypted.

Regarding the underlying models, according to previous leaks, Apple's agreement with Google is that Apple pays $1 billion annually to obtain a customized version of the 1.2 trillion-parameter Gemini model. Users can use this customized model for free. Apple has also opened up third-party adaptations, including popular options like Claude, ChatGPT, and the native Gemini. Users need to pay for these themselves.

In terms of AI capabilities, although Apple's AI is not outstanding, it is on par with the experience offered by its peers.

According to the recently released AI terminal standards in China, terminal intelligence is divided into four levels: L1 Response Level, L2 Tool Level, L3 Assistance Level, and L4 Collaboration Level. L1 can only understand simple commands, L2 can complete simple multi-step operations, L3 can understand complex intentions and proactively serve users, and L4 Collaboration Level will be refined in subsequent revisions based on industry development.

If we consider proactive service as the dividing line between L2 and L3, most vendors, including Apple, are at the L2 level.

The Doubao smartphone was previously seen as an innovative example of AI smartphones. Its GUI operation capability allows it to simulate user clicks, and it can achieve a high success rate even for complex tasks requiring dozens of steps.

Apple's Siri AI is also evolving towards an Agent direction, with capabilities such as screen awareness, personal context understanding, and task execution.

On the one hand, as a highly integrated system-level AI, Siri AI naturally has cross-app execution capabilities similar to Xiaomi's Claw. For example, when you're browsing photos, you can directly ask Siri AI where this place is, and it will identify the location for you. When you want to know how to get there directly, Siri AI can also call up the Messages and Maps apps to generate navigation for you.

On the other hand, Siri AI has personal context capabilities. Not only can users use and view historical conversation records on multiple devices with the Siri AI as a standalone app, but it can also extract information from your emails, texts, photos, etc., to respond to your needs.

In addition, system apps like Safari, Messages, Mail, Calendar, Phone, and Photos have all added AI capabilities. The most typical example is the Photos app, which can use AI and 3D modeling technology to generate new perspectives from existing photos.

Nicole Peng, Vice President of Consumer Business Research at Omdia (formerly Canalys), also stated that in terms of actual AI functionality, Apple is at least in the first tier when compared horizontally with the AI capabilities bring your own ( bring your own means 'built-in' or 'native' in this context, referring to AI capabilities that come with the phone by default) by other phone vendors in the market.

02 Advantages of Integrated Hardware and Software in the AI Era

It is reported that after launching the Doubao smartphone last year, ByteDance accelerated the advance ( advance means 'advancement' or 'progression' here, referring to the progress of the AI smartphone project) of its AI smartphone project in 2026. The Ocean team responsible for the Doubao smartphone is ByteDance's core hardware team, Flow, which is on par with Douyin (TikTok's Chinese version) within ByteDance.

Besides the Doubao smartphone, the Ocean team has also integrated ByteDance's hardware resources accumulated over the years, including but not limited to the former Smartisan smartphone, VR headset PICO, and smart earphones Oladance.

ByteDance's emphasis on terminals highlights the importance of intelligent terminals in the AI era. All consumer electronics will eventually be integrated hardware and software. Any so-called form of empowerment or cooperation can only yield temporary advantages.

This is the biggest advantage for phone vendors in the AI era. Both Xiaomi and Apple are clear beneficiaries.

For example, Xiaomi can now connect smartphones and IoT devices. Miclaw can read and understand information on your phone to provide services, similar to a 'butler,' and can also linkage ( linkage means 'coordinate' or 'work together' here, referring to the ability to coordinate across different devices or platforms) with the Xiaomi ecosystem to execute tasks across devices. When you say to Miclaw, 'I'll bring friends home in half an hour; get the house ready,' it will break down and execute the task: automatically coordinating with Xiaomi devices to adjust the lights to a warm tone, close the curtains, set the air conditioner to 26°C, start the air purifier, and play background music on the speaker.

A unified Language Model protocol and a complete scheduling framework from the device side to the cloud allow Apple to connect 2.5 billion devices. On Macs and iPads, you can invoke Siri directly from Spotlight or select 'Ask Siri' from the right-click menu. On Vision Pro, Siri can even understand your gaze focus, knowing which object you're looking at, and finally provide information.

However, on the whole, Apple's unique integrated hardware-software capability has given it more advantages in the AI era.

From a model perspective, the most powerful on-device model, AFM 3 Core Advanced, has a staggering 20 billion parameters. Logically, a model of this scale would be difficult to fit into a smartphone, but Apple has used Instruction-Following Pruning to store the complete model in flash memory (NAND) and keep a small group of 'always-activated shared experts' in DRAM, only bringing in the corresponding experts when selected by the predictor. This way, the actual parameters mobilized each time are only between 1 billion and 4 billion.

The iPhone is also equipped with the first dynamically sparse LLM for mass consumer production.

Besides that, Apple has also started to shift its chip design approach. According to a teardown analysis by Counterpoint Research, the Apple M5 Pro chip adopts a chipset-like structure and enhances the GPU's role in AI computing, achieving the highest memory bandwidth to date among Apple's professional-grade system chips.

Memory bandwidth is crucial for on-device AI. Running large language models and professional AI workflows on devices requires not only computing power but also sufficient memory capacity and bandwidth to efficiently feed data to the models.

This indicates that Apple is adjusting its Mac chip strategy to actively adapt to the demands of the AI era.

Reference Sources:

1. EDA365 Electronics Forum: Significant Changes in Apple's Chip Strategy

2. Zimu AI: A Reborn Siri Transforms the iPhone into a Doubao Smartphone

3. Jiemian News: A Comprehensive Look at WWDC2026: Cook's 'Swan Song,' Major AI Updates from Apple

4. TMTPost AGI: Apple's AI 'Turnaround' Still Relies on Gemini as the 'Brain' | WWDC26

5. APPSO: The iPhone Transforms into an AI Phone Overnight, but the Future of AI Smartphones Lies Beyond the Phone

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