If you are keeping up with the Apple news these days, then surely you’ve heard that services are the future growth area for the company. You’ve probably heard it everywhere and often, including right here. This is where the company projects to generate the additional revenue that the iPhone used to have covered before the smartphone market as a whole leveled off. Not even the mighty iPhone is immune to that, as we finally saw last quarter.
So what does an AI voicetech startup have to do with services? Everything. AI and machine learning are at the heart of a modern services architecture. How does Amazon know what to recommend to you? How does Netflix know which shows to promote to you? How does Spotify make their playlists and recommend new artists? You guessed it.
Apple already does this in many areas, of course. For example, they also use AI and machine learning for recommendations and radio station setup in Apple Music. They use it in Apple News to serve up stories to you based on your preferences. We also see it in the App Store in recommendations and searches. All that said, AI and machine learning have never been seen as strengths at Apple.
Nowhere are Apple’s deficiencies in AI and machine learning more apparent than when it comes to Siri. While it can be argued that Siri has improved in some respects over the years, it still leaves a lot to be desired. The addition of Siri Shortcuts in iOS12 was a big positive step forward, and there is definitely an AI and machine learning element to how Shortcut recommendations are served up. However, this isn’t where Siri falls down. It is voice recognition, conversation capability, and understanding of context where it is still at its weakest.
When you consider that Amazon and Google are two of Apple’s biggest competitors on this new services landscape, the shortcomings of Siri’s voice technology are a problem. They are both more effectively delivering value and driving more use of their services using voice-based AI. Apple has to figure out a way to bridge this big gap. THIS is why the Pullstring acquisition is so important for Apple.
Yes, Pullstring is best known for its use in toys, but they are not a toy company. They specialized in coming up with effective and engaging AI-based voice tech for speaking toys, such as Hello Barbie. But if you look at the Pullstring website, you can see that their expertise goes well beyond toys. Lately, they have also been delivering voice apps for Amazon Alexa, Google Home and other platforms covering all kinds of uses. This is EXACTLY the kind of expertise that Apple needs to be bringing in-house right now.
To me, Apple promoting John Giannandrea to its executive team as Senior Vice President of Machine Learning and AI Strategy is evidence that the company is finally taking AI and machine learning as seriously as they should. Again, if their near-term future profits and growth are going to come from services, then they are going to have to rapidly improve in these areas, so it’s about time. I see Apple’s acquisition of Pullstring as another extension of this. They need to stop talking about making Siri better and actually do it and now they have what looks to be the right team for that job.