Apple, Google, and New AI-Powered Devices

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Apple Foundation Models based on Gemini

  • Apple and Google have entered into a multi-year collaboration.
  • The next generation of Apple Foundation Models will be based on Google’s Gemini models and cloud technology.
  • These models will help power future Apple Intelligence features.
  • A more personalized version of Siri is expected to launch later this year.
  • Apple determined, after careful evaluation, that Google’s AI technology provides the most capable foundation for its needs.
  • Apple believes this partnership will unlock new and innovative experiences for users.
  • Apple Intelligence will continue to run on Apple devices and Apple’s Private Cloud Compute.
  • Apple will maintain its industry-leading privacy standards despite the collaboration.

Benefits of Running Google Gemini Models on Apple Devices

  • Apple gains immediate access to state-of-the-art multimodal AI without waiting to build its own frontier LLM.
  • Gemini’s strength in multimodality improves Apple’s ability to process text, images, audio, and video together.
  • On-device Gemini models enhance real-time contextual understanding while reducing latency.
  • Apple can combine Gemini’s intelligence with its custom silicon for optimized performance per watt.
  • Running Gemini models locally aligns with Apple’s privacy-first architecture.
  • Sensitive user data can remain on-device or within Apple’s Private Cloud Compute.
  • Apple avoids sending raw data to third-party clouds for inference.
  • Gemini’s vision capabilities directly support future glasses and camera-based wearables.
  • Improved visual understanding enables richer spatial and environmental awareness.
  • Gemini enhances Siri’s ability to reason about the physical world, not just text queries.
  • Apple can layer its own UX, policies, and safety constraints on top of Gemini models.
  • This preserves Apple’s control over user experience and platform governance.
  • Apple benefits from Google’s rapid AI research and model iteration cycle.
  • Apple reduces AI R&D risk while focusing internal teams on integration and product design.
  • Gemini provides a scalable foundation across iPhone, iPad, Mac, Watch, AirPods, and future glasses.
  • Consistent AI behavior across devices strengthens ecosystem cohesion.
  • Developers benefit from more capable foundation models exposed through Apple frameworks.
  • Gemini’s reasoning abilities improve automation, summaries, and proactive assistance.
  • Apple can selectively deploy features based on hardware capabilities.
  • This partnership accelerates Apple’s AI roadmap by multiple years.
  • Apple maintains strategic independence by not fully outsourcing AI control.
  • Gemini models help Apple stay competitive with OpenAI-powered platforms.
  • The collaboration allows Apple to meet user expectations for cutting-edge AI quickly.
  • Apple can transition to its own models later without disrupting the user experience.

Overview: Apple, Google, OpenAI, and the Race to AI Glasses

  • This analysis examines the emerging deal between Apple and Google to create a new version of Siri.
  • The deal exists within a broader competitive landscape that includes OpenAI’s expanding ambitions.
  • OpenAI is building a range of new products and positioning itself as a direct competitor to Apple.
  • Apple declined to provide OpenAI with additional data that could strengthen a future rival.

The Strategic Shift Toward Glasses

  • The most important transition underway is the move from phones and earbuds to glasses-based computing.
  • Many people remain skeptical about the timing of this shift.
  • CES provided strong evidence that the move to glasses is imminent.
  • A large number of companies showcased glasses, indicating rapid industry momentum.

Cameras, Multimodality, and Real-World Understanding

  • For OpenAI to remain competitive, it will likely need to integrate a camera into an earphone or similar wearable.
  • Cameras are critical because they provide contextual understanding of the real world.
  • This capability enables features that current AirPods Pro cannot match.
  • While no camera-equipped earphone has been confirmed, it would not be surprising to see one emerge.
  • Apple is believed to be developing such a product to complement its glasses strategy.
  • Google’s Gemini models are stronger in multimodality than OpenAI’s models.
  • Multimodality allows better use of cameras, audio, and sensors together.
  • Many Silicon Valley robotics companies use Google Gemini because robots require multimodal intelligence.

Apple Glasses: Hardware Advantages

  • Apple’s glasses are expected to launch around 2027.
  • The glasses are expected to include eye-tracking sensors.
  • Eye tracking allows the system to know exactly where the user is looking.
  • The system can also determine what the user is touching, holding, or gesturing toward.
  • These inputs enable a new category of contextual computing.

A New Kind of Siri

  • These hardware capabilities will give Siri a unique advantage.
  • Siri will be able to answer questions no other search engine can answer.
  • Context will come from gaze, gestures, and the physical environment.
  • This represents a fundamental shift in how users interact with AI.

Content as Apple’s Core Advantage

  • The strongest reason for optimism about Apple’s glasses is content, not hardware.
  • Apple holds major sports rights, including the NBA and Formula One and operates a strong studio system.
  • Content creates sustained engagement that competitors struggle to replicate.

Privacy, Trust, and Retail Power

  • Apple’s privacy-first positioning gives it a major advantage in consumer trust.
  • Apple retail stores provide unmatched distribution and education.
  • Apple stores enable:
    • Live demonstrations of glasses
    • Proper fitting for customers
    • In-person training and onboarding
  • Apple regularly runs classes in its stores.
  • These classes attract large audiences and reinforce trust in the brand.
  • Apple’s retail strategy gives it access to many of the world’s wealthiest consumers.

Ecosystem Lock-In and User Behavior

  • OpenAI has nearly a billion users.
  • It is unclear whether those users would abandon the Apple ecosystem for OpenAI hardware.
  • Apple’s headphones integrate tightly with iPhones and other Apple devices.
  • Even if competitors offer more features, ecosystem cohesion often matters more.
  • Many users are deeply invested in Apple’s ecosystem and are unlikely to switch.

CES Signals: A Fast-Moving Market

  • CES demonstrated how quickly the glasses market is evolving.
  • Multiple manufacturers are already producing glasses for other brands.
  • Some Chinese manufacturers are operating in near-stealth mode.
  • This highlights how competitive and global the market has become.
  • XREAL recently raised $100 million to fund continued development.
  • XREAL plans to release Android XR–based glasses later this year.

Design, Luxury, and Profitability

  • AI wearables must not only describe the world but visually show information.
  • Apple consistently delivers superior industrial design.
  • As a luxury brand, Apple can charge higher prices.
  • Higher prices translate into higher profitability.
  • Few companies can integrate design, AI, hardware, software, and retail at Apple’s level.

Market Timing and Strategy

  • Apple is expected to make a major announcement about glasses by 2027.
  • Many competitors will enter the market earlier.
  • Apple historically enters markets later and then redefines them.
  • Early entrants may capture some users.
  • Many consumers are willing to wait for Apple’s version due to its advantages.
  • Apple does not have its own large language model.
  • This reality made a partnership with Google necessary.

A Critical Caveat

  • Apple must deliver an exceptional pair of glasses.
  • Apple may also need to deliver a headphone with an integrated camera.
  • Failure to execute could allow competitors to gain ground.

The Brewing Patent Battles

  • A significant patent battle is emerging behind the scenes.
  • Apple holds a substantial patent portfolio.
  • Large technology companies routinely use patents offensively and defensively.
  • Microsoft owns dozens of XR-related patents from its HoloLens efforts.
  • Although Microsoft abandoned HoloLens, it’s patents are still in force.
  • Google-funded Magic Leap holds approximately 1,000 patents.
  • The future sale of Magic Leap’s remaining assets could reshape the competitive landscape.

Conclusion: Apple’s Familiar Playbook

  • AI is rapidly moving into wearables, especially glasses.
  • Apple is following its traditional strategy:
    • Enter later
    • Integrate everything
    • Redefine the category
  • Despite intense competition, Apple still has all the necessary pieces.
  • If execution matches ambition, Apple is positioned to dominate AI-powered wearables.

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