There is an ancient tale behind the Asian Zodiac signs. It involves a mouse, an ox, a cat, and ten other animals. The announcement of Apple Intelligence this week reminded me of that tale.
Depending on the country in Asia, the tale differs slightly but here’s the Japanese version that I grew up with:
A long, long time ago, God decided to give a place of honor each year to an animal in a twelve-year cycle. He summoned various animals and beckoned them to meet him on January 1st, letting them know that the selection would happen by the order in which they arrived.
The ox, knowing that he was a slow walker, decided to leave the night before. The mouse in the attic of the ox’s barn seized the moment and jumped onto the ox’s back. As the ox approached the house of God in the morning, the mouse jumped off and greeted God, securing first place among the twelve animals in the Zodiac race.
The lesson here is that you don’t need to be the fastest but the smartest. Reading this now, there is a degree of sneakiness on the mouse’s part. I’m not sure I'd pass this tale exactly as it is to my kids. But this post isn’t about parenting.
Is Apple behind?
By the time you read this, countless voices have already expressed their opinions about Apple’s approach to AI and why it is “understated” and “behind its rivals.”
During the company’s annual Worldwide Developers Conference (WWDC), the stock market did not react well to Apple’s announcement. It kept declining throughout Mon when the announcement took place. “There is no wow factor here,” said a Bloomberg reporter.
The press release from Apple read:
“Apple today introduced Apple Intelligence, the personal intelligence system for iPhone, iPad, and Mac that combines the power of generative models with personal context to deliver intelligence that’s incredibly useful and relevant. ”
The rest of the press release as well as the presentation demonstrated Apple’s positioning and marketing discipline in that it barely used the most talked about and hyped term of the past 18 months: artificial intelligence. Instead, it took the opportunity to subtly, or blatantly, claim that AI, in Apple’s universe, is Apple Intelligence. Arrogant? Yes. It’s Apple.
In fact, the only place Apple used the word AI, as in artificial intelligence, was the headline: “AI for the rest of us,” reminiscent of “A computer for the rest of us” in 1983 when the market was dominated by IBM’s PCs. The press release on Mon did have a few mentions of AI but only six times. In contrast, at Google I/O last month, Google’s CEO Sundar Pichai said “AI” more than 120 times during the keynote.
Guess who’s desperate to prove.
Money talk
The way the market has reacted since Monday is a curious reflection of the zeitgeist of the moment. From Monday until Tuesday morning, Apple stock was on a downward trend, reflecting the “Is this it?” feeling that anyone who was paying attention to Apple’s official foray into the AI mosh pit had.
By mid-morning Tuesday, the investment world started to remember three facts.
Apple controls over a billion screens across the world. It has by far the best distribution system.
This isn’t the first time Apple has given it a go at AI. It’s called Siri and we’ve hated it since 2011.
Not all of us wear Patagonia vests or wear baseball caps. Many of us aren’t keen to prove we are using AI every day to be more productive. The rest of us aren’t tech, finance, or creator bros.
Apple’s superpower has always been looking out for the rest of us. By the close of Tuesday, Apple’s stock hit an all-time high.
Steve’s move
Positioning the product for “the rest of us” was a classic Steve Jobs move. The Macintosh in 1984 was the first instance of this positioning he used and the rest is history. Apple lost its way after he was ousted, but as soon as he came back in 1997, Jobs started to replay the same script, not just once but repeatedly:
The iMac was “the Internet for the rest of us.”
The iPod was “the music player for the rest of us.”
The iPhone was “the smartphone for the rest of us.”
The Apple Watch was “the wearable for the rest of us.”
In mobile computing, there were BlackBerrys, PalmPilots, and many other mobile computing devices from the late 1990s to early 2000s. Apple wasn’t even the second to move into that market. It wouldn’t be until 2010 that Apple entered this market, at which point there must have been a dozen or more mobile devices ahead. Apple wasn’t even close to being a second mouse.
In the virtual/augmented reality space, after witnessing the abysmal traction that Meta, Google (Glassholes, anyone?), and Magic Leap gained with their products, Apple took its time to enter this market. While there have been some sporadic successes in this area, nothing has reached scale. VR/AR technologies remain on shaky ground as a mass-market proposition.
So in 2023, Apple tried to have a go at this market with Steve’s script for the Vision Pro.
In that announcement, words like “metaverse” and “virtual/augmented/mixed reality” were noticeably absent, as an attempt to distance itself from the collective failures in the space we’ve seen over the years. Instead of virtual reality, Apple claimed it was starting a new generation of computing: spatial computing.
The use cases of the Vision Pro presented in the demo a year ago suggested a wide range of scenarios—from work and productivity settings to personal and family settings, such as watching movies, FaceTiming with friends and family, or recording your kid’s birthday parties. A grown-up man with a gigantic headset on his face and staring at kids in an open playground is creepy, to say the least, as of 2024 or for the foreseeable future.
In the demo video, the Vision Pro was pretending that it was “VR/AR for the rest of us.”
Yet, Apple decided to brand it “Pro” and price it at close to $4,000, positioning it as a high-end, exclusive product. It’s for those who sit in the front of a plane from San Francisco to New York, or New York to Nice on their way to Cannes this June, binge-watching Succession again from a year ago.
A year later, we still haven’t seen Tim Cook with a Vision Pro on his face. The world still seems pretty far away from adopting virtual reality or spatial computing the same way it embraced personal computing with the Macintosh or mobile computing with the iPhone.
Apple Vision Pro hasn’t instantly scaled like other Apple hardware products not because the product is bad. For a VR/AR headset, its engineering and industrial design are something to be marveled at. I’m sure there are those who own and enjoy using it. But they are the early adopters and aren’t the rest of us. How it’s branded and priced, and how Apple tells its narrative are inconsistent.
In all the instances where Apple did succeed, it wasn’t the first, or even the second, mover into the space. What matters isn’t how early or late you enter the race but where you position yourself.
The Zodiac race
Among GAFAM (Google, Apple, Facebook/Meta, Amazon, Microsoft) and now OpenAI, it’s clear by now Apple is the mouse that doesn’t try to be the first in most competitions. —— calls it the second mouse strategy.
But I call it the Reframing Strategy.
Let me bring back the Zodiac tale that I mentioned earlier and explain.
There are twelve Zodiac animals: the Mouse, Ox, Tiger, Rabbit, Dragon, Snake, Horse, Goat, Monkey, Rooster, Dog, and Pig.
There is no cat among these twelve.
In America, Tom and Jerry is a famous rivalry tale. According to a Reddit post that went viral a few years ago, despite what one might think, Tom and Jerry are best friends.
In Asia, cats do hate mice. The Zodiac tale provides the backstory behind cats’ eternal hatred toward mice.
After God announced the race, the cat couldn’t remember the exact date the animals were supposed to visit God. The cat asked the mouse, to which the mouse answered, “January 2nd.”
By the time the cat showed up before God, the race was over obviously. God reprimanded the cat and refused to give him a spot.
That is why cats hate mice and always chase them whenever they lay their eyes on mice.
Ok, the part about the mouse lying to the cat isn’t cool so I’ll conveniently ignore it.
Everyone wanted to be wowed by the announcement from Apple about AI. Not only was the market unimpressed, it felt let down initially, as the stock market indicated on the day of the announcement. We all wanted to see Apple reveal a brand-new, original product like Steve used to.
Apple tried to reposition VR for the rest of us as spatial computing. Putting on a headset after dinner by yourself in front of your partner makes you a bad partner (ok, a douchebag). Doing that in business class on an airplane might be slightly more tolerable. But those are tech, finance, or media bros, and not the rest of us.
On Thursday, it was reported that Apple isn’t paying a penny to OpenAI. The report says Apple is “paying” OpenAI for ChatGPT with its distribution, not cash. That deserves to be the wow factor.
It’s as if Tim Cook whispered to Sam Altman’s ears that they were not in the same AI race so Sam needn’t worry, just as the mouse told the cat that the Zodiac race was happening on a different day.
It turns out OpenAI is the cat, and Microsoft is the ox. Google, Facebook, Amazon, and others are the remaining Zodiac animals, and Apple is letting them duke it out.
Jobs said, “Tim is not a product guy.”
Although the Apple Watch was launched under Cook’s watch, it was the last hardware product that had Jobs’ touch. On the other hand, in a dozen years since Cook took over as CEO, Apple’s revenue more than tripled from $108.25BN in 2011 to $383.29BN in 2023. He led the growth by expanding in China, introducing Apple Pay, storing and securing millions of credit card numbers, etc, many of which are infrastructure moves, not hardware product moves. Infrastructures are dull, unsexy, and often invisible.
With more than a billion devices around the world, Apple will deliver AI to more people’s fingertips than any other company. Instead of creating a new hardware product or app, it’s doing so by integrating AI into its OS and apps on existing devices like iPhone 15 Pro and Pro Max. Yet another reason we didn’t need to convince ourselves to upgrade our iPhones sooner than expected or necessary.
While Jobs’ superpower was creating devices for the rest of us, Cook’s is creating digital—and now AI—infrastructures for the rest of us.
The lesson, again, is that you don’t need to be the fastest.
Reframe the race you are in, so that you can play to your strength.