Apple’s AI capabilities have received approval from investment firms, and the iPhone maker’s privacy-focused Apple Intelligence platform could help it gain market share, the company said.
New York-based investment bank Rosenblatt Securities released the results of a survey that found that U.S. consumers ranked privacy as the feature they most wanted on AI and investment-focused sites. Investing.com report.
Of the 500 survey respondents, 17.8% said privacy was their most desirable smartphone feature out of 15 features — 5.6 percentage points higher than the next highest ranked feature, insights.
“Considering that Apple has flagged it on its own, Private Cloud Computing “Apple appears positioned to capture brand interest and AI market share with an initial focus on strong privacy, given its recent history of strong ad privacy protections in its app store and rivals’ AI privacy mishaps,” the Rosenblatt analysts said.
With this in mind, Rosenblatt is pricing the iPhone maker’s stock at “buy“, effectively giving Apple Intelligence its blessing. Other research analysts agree, with Bank of America reaffirming a Buy rating on Apple shares with a $230 price target in a research note on June 12, according to Marketbeat.
Tigress Financial raised their price target on Apple from $240.00 to $245.00 and gave the company a strong buy recommendation in a report on May 30. DA Davidson raised their recommendation on Apple from a neutral to a buy recommendation and raised their price target on the company from $200.00 to $230.00 in a research report on June 11.
Interestingly, some of the elements that increase the privacy and security of Apple’s AI, such as specialized large-scale language models (LLMs) and Apple Silicon, could help insulate the iPhone maker from cost pressures that are affecting its competitors, Rosenblatt analysts said.
The analysts noted that Apple’s spending hasn’t increased as much as rivals such as Google, Amazon, Meta and Microsoft. “As such, Apple can take advantage of these companies’ heavy investments through third-party integration via private cloud computing, which allows it to reap both higher margins and profits,” they said.
The truth about Apple’s privacy-focused AI
This latest news will be a boon for the iPhone maker, which has long differentiated itself by focusing on privacy.
Apple has been seen as lagging behind its big tech rivals in AI, but the company’s focus on privacy has impressed experts. This is despite Apple’s deal with OpenAI to include ChatGPT on iPhones in iOS 18, which some critics have said could raise privacy concerns.
Apple Intelligence and its private cloud computing appear to be very different AI privacy features offered. Rival iPhone makers are trying to ensure that users have as much privacy as possible when using this technology, and even if the AI features require more resources, Apple claims that PCC gives them the ability to process data in a unique, secure and private way in a private cloud environment.
“It’s crucial to build privacy into AI algorithms when designing them,” says Jake Moore, global cybersecurity advisor at ESET, but he adds that the amount of data collected and analysed to achieve high quality standards is “prohibitive” and “may lead to personal information being leaked.”
Apple’s continued focus on strong privacy protections “clearly puts it ahead of the competition,” with few companies offering the same level of protection, Moore said, and he believes the iPhone maker’s AI strategy “could lead to much-needed market share gains that will force others to follow suit.”
AI privacy concerns continue as all tech giants rapidly roll out AI technology, but early research confirms that privacy is important to consumers using the technology, so Apple’s AI strategy may be on target.