Apple is positioning its redesigned Siri to compete directly with ChatGPT and other AI assistants with what competitors can't match: billions of active devices already in users' hands and deep integration with personal data stored on those devices.

"It's less of a takeover, but more like a fork in the road," said our analyst Gadjo Sevilla, on a recent episode of "Behind the Numbers." "Apple is not competing in that space. It's not a general free-for-all model. What it is doing, however, is infusing its own brand of safe, and as we're seeing, highly personalized AI features designed around its users."

At Apple's developer conference last month, the company demonstrated Siri AI handling complex, free-form requests like "Add this photo to the email I drafted to my friend" and "Show me my photos from Stacy in New York wearing her pink coat." The upgraded assistant, expected to launch two years after initial promises, will incorporate Google's Gemini AI model and cloud technology, while Apple is also releasing a dedicated Siri app to compete directly with standalone chatbots.

Scale and trust create competitive advantages

Two fundamental strengths position Apple favorably in the AI race: its massive device ecosystem and consumer trust around privacy.

"The two big things that are really working in Apple's favor are scale and trust," said EMARKETER analyst Grace Harmon. "We're talking about billions of active Apple devices, like an almost unimaginable distribution network for AI features."

Apple is spending more on R&D than ever before while using foundational models developed in combination with Gemini, in addition to its own on-device processing.

"They're not trying to reinvent the wheel. They're trying to own this user experience level on top of the best AI that is around and is available," Harmon said.

Siri doesn't need to be the smartest assistant available. It just needs to be the one already in users' hands. Apple is about to put fully capable AI within reach of hundreds of millions of people, many of whom have never opened ChatGPT.

On-device processing enables deeper personalization

The key differentiator for Siri AI is its ability to access and process personal information directly on users' devices, creating context awareness that competitors struggle to match.

"A lot of what Siri AI is going to be able to do for its users securely will be on device," Sevilla said. "The personal context, awareness, understanding what's in their messages, what's in their photos, tying that all together with their calendar. Now, that's easy to do on device since it's a very controlled space."

Apple's pitch centers on privacy: For Siri to be useful, it must access messages, mail, and photos. Apple says it handles what it can directly on devices, and anything sent to the cloud is used only to answer requests and then deleted.

The upgraded Siri can pull answers from old message threads, extract information from emails to create packing lists, and draft group invitations, all without opening any apps. "Personalization is something that everyone who's into AI wants out of their AI experience," Harmon said. "If it's able to pull on not just what you've already said to it, but of your photos, of your emails, of your texts, I think that that is just a huge asset."

Apple's control over hardware and software creates opportunities for AI integration that third-party developers can't replicate. However, this advantage only extends to Apple's own apps and services initially, potentially limiting functionality with third-party applications like Gmail or WhatsApp.

Challenges remain despite advantages

Apple faces several obstacles in the AI assistant race, including delayed investment and limited third-party integration.

"For a long time Apple has been kind of over promising, under delivering," Harmon said. "Since most of its revenues are coming from hardware, it just hasn't felt or been pressed by that same urgency that Google or Microsoft have to act and be spending really aggressively on AI."

Hardware limitations mean Siri AI won't be available on all devices initially, potentially creating a fragmented user experience. Early demonstrations also suggest the assistant takes time to process requests, indicating it's still in development ahead of its September launch.

Third-party AI developers may face challenges accessing Siri AI integrations. "Anything outside of Apple's control, including features from third party apps, that might take time to show up," Sevilla said.

While Apple's device ecosystem provides distribution advantages, users who rely heavily on non-Apple services like Gmail or Google Photos may find Siri's capabilities limited. The assistant can read what's on screen in any app, but until those apps allow deeper integration, significant blind spots remain.

Listen to the full episode.