Apple’s foray into artificial intelligence (AI), unveiled at the Worldwide Developers Conference, aims to transform how consumers interact with their devices and, more importantly, how they shop. If Apple has its way, your iPhone will know your shopping preferences and predict your next purchase. Apple Intelligence will be able to analyze your browsing history, purchase patterns, and social media activity. Experts say the company is also looking to change how businesses interact with customers. With the integration of ChatGPT, Apple devices will soon be able to handle customer inquiries, process orders, and even provide product recommendations. “As consumers become accustomed to AI handling more tasks, their reliance on AI for daily activities and decision-making will likely increase. This could shift consumer expectations toward more automated and intuitive services,” Yi Fang, associate professor of Computer Science and Engineering and director of responsible AI in the School of Engineering at Santa Clara University, told PYMNTS.

Apple’s dominant position in the U.S. phone market gives it a significant advantage in rolling out AI functionality. “Apple’s dominant position, with a 60% market share in the U.S. phone market, gives it a massive advantage in rolling out AI functionality that seamlessly improves the core product and user experience,” Sunil Rao, CEO and co-founder of Tribble, told PYMNTS. “This integration will significantly influence consumer behavior and market competition.” As AI integrates into the OS, consumers may prefer this approach rather than using specific AI apps. “This sets strong competition for some specific apps but still provides the possibility to handle complex tasks with Siri through third-party apps. From the perspective of the foundation model, only GPT integration was announced, but there is hope to see Gemini this year,” Bohdan Khomych, head of R&D commercialization at software development firm SoftServe, told PYMNTS.

Privacy and new revenue streams are key considerations for Apple as it integrates AI into its products. Apple’s emphasis on privacy, by performing processing on the device and using a private cloud network with Apple semiconductors, may attract users who prioritize data security over competitors. “By emphasizing privacy and on-device processing, Apple could set new standards for data security in AI applications. This could influence industry norms, pushing other companies to adopt more stringent privacy measures,” said Fang. The integration of AI could also unlock new revenue streams for Apple. “Enhanced AI capabilities may drive higher sales of iPhones and other Apple devices by highlighting AI features as key selling points. Moreover, these AI functionalities can boost investor confidence, positioning Apple as a serious contender in the AI race against competitors,” Fang added. However, she cautions that Apple’s reliance on OpenAI’s ChatGPT, coupled with its closed research model, which limits the publication and sharing of AI advancements, may hinder its ability to attract top AI talent and constrain its AI development in the long run.