The evolving artificial intelligence landscape presents a unique challenge and opportunity for established tech giants like Apple. Tony Wang, Portfolio Manager at T. Rowe Price, recently articulated on CNBC's *Squawk Box* a nuanced perspective on Apple's position within this burgeoning domain, highlighting its inherent strengths despite not always being the first mover. Wang spoke with the *Squawk Box* interviewer about Apple's strategic approach to AI expansion, its stock performance, and the broader implications of AI for business models.
Wang underscored Apple's enduring strength in its ecosystem, noting, "Apple is still the ecosystem provider, everyone is still using iPhones." This robust user base provides a significant advantage, ensuring a captive audience for new AI-powered features. He further elaborated that Apple does not need to be a pioneer in every AI application. Instead, their proven strategy involves refining existing technologies and delivering a superior user experience. "They don't have to be first to market," Wang stated, adding, "but they often refine the product and deliver a really good experience." This deliberate approach minimizes risks associated with early adoption while maximizing the impact of polished, integrated solutions.
A critical insight from Wang centered on the economic shift driven by AI: the "cost of intelligence is going to zero." This paradigm shift means tasks traditionally requiring extensive human capital, such as engineering or sales, can increasingly be automated through AI agents and advanced coding. This transformation will not only necessitate a retooling of business models for incumbent companies but also "create a lot of new entrants" and significantly "expand a lot of creativity." The market will ultimately favor the "best idea wins," fostering a dynamic and competitive innovation cycle.
Wang acknowledged that while consumer engagement models like ChatGPT are currently leading in certain AI applications due to their personalized experiences and significant capital raises, the AI "space race is going to multiple moons." This metaphor suggests that success in AI will not be confined to a single dominant model or use case. Companies like Tesla are carving out niches in robotics and autonomous driving, while Apple's focus remains on delivering premium, personalized experiences within its vast ecosystem, particularly on the iPhone and through mobile computing. Apple possesses ample capital for potential partnerships and mergers and acquisitions, further enhancing its ability to integrate cutting-edge AI into its product offerings.
