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Alphabet has a good incentive to partner with Apple to make Siri smarter.
Alphabet (GOOG 2.98%) (GOOGL 3.10%) moved higher today — and well, yes, pretty much everyone is moving higher after Federal Reserve Chairman Powell hinted at the Federal Reserve conference in Jackson Hole, Wyoming, that he’s considering lowering interest rates this year — but Alphabet in particular went on a 3.7% romp that’s more than twice as big as today’s gain on the Nasdaq Composite (^IXIC 1.88%) generally.
And why?
Because according to Bloomberg, Apple (AAPL 1.21%) is getting ready to hire Alphabet’s Google to redesign Siri and give Apple some real artificial intelligence (AI).
Image source: Getty Images.
Alphabet and Apple: Better together?
As Bloomberg tells it, the impetus for this move came from Apple, which has approached Alphabet about getting the latter’s Gemini AI team to “revamp the Siri voice assistant.”
Apple, you will recall, was supposed to roll out a much smarter Siri last year, to pair with a new generation of AI-enabled iPhone smartphones. “Engineering setbacks” cropped up, however, and that hasn’t happened yet.
In that former project, OpenAI and ChatGPT were supposed to be the brains behind a new and improved Siri. It’s not clear whether that part of the plan is still active. But news that Apple is now talking to Alphabet suggests Apple could — at the very least — be open to the possibility of switching horses midstream, and giving its business to Google rather than to OpenAI.
Is this good news for Alphabet stock?
What’s in this for Alphabet, and is it wise for the company to partner with the archrival of its own Android-software smartphones?
When you consider that Apple still holds dominant smartphone market share worldwide (27.5%), while Google sells few phones, and much of Android’s success benefits a different smartphone maker, Samsung (21.6%), Alphabet has little to lose through this tie-up with Apple.
It could have billions in license fees to gain.
About the Author
Rich Smith is a contributing Motley Fool defense and stock market analyst covering publicly traded and emerging companies in defense, space, aerospace, and other sectors. Prior to The Motley Fool, Rich practiced international corporate law for Clifford Chance in Russia, and for the Russian-Ukrainian Legal Group in Moscow, Kyiv, and Washington, D.C. He holds a bachelor’s degree in international relations from the College of William & Mary, a law degree from the University of Baltimore, and a language certification from the International Institute of Russian Language & Culture in Tver, Russian Federation. The Globe and Mail once featured him as “one of the best stock pickers since 2009.”
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Apple. The Motley Fool has a disclosure policy.
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