It's reported that Apple is planning to launch cloud services to compete with Google and Amazon. However, the executive in charge has left, and the future of the project remains uncertain.

According to foreign media The Information, in recent years, Apple has considered launching a cloud service for developers, which would put it in direct competition with cloud service giants such as Amazon, Microsoft, and Google.

For Apple, which has long focused on consumer electronics hardware and ecological services, this move is not only an important expansion of its business map but also a key step in seeking new breakthroughs in the competitive landscape of the technology industry.

However, with the departure of relevant executives, the specific status of the project is currently unclear.

01. Self-developed chips become the key bargaining chip. Apple's cloud service breaks through in the AI track with this.

The cloud service project has been included in Apple's "ACDC plan" (Apple Chips in Data center). As the first step of this plan, Apple launched a private cloud computing service (Private Cloud Compute) last year, using high-end Mac chips to run complex requests in new AI systems that cannot be processed on the device side.

The Siri team was the first to test the servers based on Mac chips, which were superior to traditional servers using Intel chips in terms of the accuracy of text-to-speech function and cost control. In addition, Apple has internally tested the ability of its server chips to process Apple Wallet transactions in the cloud, and the results show that it can effectively save internal infrastructure costs. Apple's photo album and music teams have also tried using these chips and achieved performance improvements in areas such as search.

▲ Introduction to Apple's M4 chip. Image source: Apple's official website

Although Apple has been lagging behind in the development of the AI field, its advantage in chips is undoubtedly a major highlight.

Apple executives believe that its self-developed chips have high performance, enabling developers to use cloud services at a lower cost than mainstream cloud service providers, especially in the field of computationally intensive AI applications. As enterprises gradually commercialize AI models, the proportion of inference in AI computing will continue to increase, which is exactly where Apple's self-developed chips excel.

For a long time, Apple has been carrying out AI-related work on its chips and has accumulated rich experience.

Companies such as Dragonfruit and webAI have begun to use Apple chips for their business. The former has achieved significant cost advantages by connecting Mac minis to create AI devices; the latter provides enterprises with the ability to run AI models efficiently on Apple hardware. In addition, Apple has also built an open-source machine learning framework MLX and opened up its base models to facilitate developers to run AI in their applications.

02. Apple's AI strategy takes an unconventional approach. It relies on external cloud services to layout AI.

In the field of AI, Apple's strategy is different from other technology companies.

Large technology companies and AI startups spend huge amounts of money on NVIDIA chips every year for large-scale AI model training, while Apple chooses to rent chips from Amazon and Google's cloud services more often, with an annual expenditure of about $7 billion, and the proportion used for AI training is relatively small. Apple believes that using external cloud services for training can avoid accumulating a large inventory of NVIDIA chips after the model training is completed.

▲ Apple AI. Image source: Apple's official website

"Apple has been working on AI on its chips longer than any other company," said Amit Kumar, the CEO of Dragonfruit, which uses Apple chips to develop a security camera analysis product for retailers. "When NVIDIA was focusing on the gaming field, Apple was already doing real AI computing."

03. Apple's App Store commission may be threatened. Apple hopes that the developer cloud service will activate new revenue growth.

Launching a developer cloud service is of great significance to Apple's service revenue. Currently, the service business is one of the few growing segments of Apple, but it is facing multiple challenges: new regulations and court decisions threaten the high commission of the App Store, and the US Department of Justice is also questioning its $20 billion annual default search agreement with Google. In this context, the cloud service for developers is regarded as a potential new engine for service revenue.

▲ Apple App Store. Image source: Apple's official website

Different from traditional cloud service providers, Apple plans to have its developer relations team handle the developers who register for the service, rather than establishing a large enterprise sales team. This is highly consistent with its long-term strategy of focusing on the developer ecosystem. Nevertheless, for a company that has always been firmly committed to the consumer business, launching a developer cloud service across industries also poses certain challenges.

04. The future direction of Apple's cloud service remains a mystery.

Although there are significant advantages in chips, the current situation of the project is still unclear. The main supporter of the project, cloud service executive Michael Abbott, left Apple in 2023.

Although relevant discussions were still ongoing as of the first half of 2024, it is currently unclear whether the project is still being promoted. If the cloud service business is finally launched, it is expected to be operated by Adrian Perica, who has taken over more of Apple's service businesses in recent years.

Currently, although the project has lost its main promoter, there are still internal supporters, and its future direction remains to be seen.

05. Conclusion: Is Apple's cloud service an opportunity to overtake on a curve or an attempt in the fog?

Apple's consideration of launching a cloud service for developers is an important attempt in business expansion based on its self-developed chip advantages. However, the departure of the main promoter of the project and the cross - industry move from the consumer business to the developer cloud service field have brought many uncertainties to this initiative.

If Apple can successfully promote and launch the cloud service business, it may not only open up a new growth pole for its service revenue but also reshape its competitive landscape in the technology industry. Especially in the current era of deep integration of AI and cloud computing, it may become an important opportunity for Apple to overtake on a curve.

However, whether it can be successfully launched and break through still needs to be tested by time and the market.

Source: The Information

This article is from the WeChat public account "Zhidongxi". Author: Du Zhiwen. Republished by 36Kr with permission.