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CIOs, ask not what Apple's iPhone X can do today, but what comes next

ARKit, neural engine, Face ID -- here's how CIOs should be looking at Apple's iPhone X. Also: Equifax sued, Microsoft and Intel's Confidential Compute, Samsung's $300M bet.

Initial reviews are in on Apple's iPhone X -- new features dissected, the disappearance of the home button judged....

The question: Will this week's big event in Cupertino, Calif., change anything for CIOs? 

Does Apple's new Bionic Chip with Neural Engine alter how application development teams think about mobile apps? Will the iPhone X's ARKit, also available on a select number of other iOS devices, take augmented reality mainstream? Will Face ID -- the black eye it got for flubbing its big debut notwithstanding -- make facial recognition technology ubiquitous?

That depends on whom CIOs turn to for insight. Think of Apple's iPhone X as a Rorschach test of our hopes, fears and cynicism about the future.

On-chip AI, Face ID

For Forrester Research analyst Brandon Purcell, Apple's new augmented reality (AR) capability ranks behind the real game changer for CIOs in Tuesday's news: "The biggest piece is this neural engine, which actually sits on the device itself," said Purcell, who covers artificial intelligence (AI) for the research company.

"It's a big deal because it allows artificial neural networks, which are the reason for all the hype around AI today, to run on the phone," he said.  

Neural networks are sophisticated and computationally intensive algorithms that "you had to call to the cloud" in order to use in an app, he said. Combined with Apple's Core ML framework for machine learning -- a capability Apple downplayed Tuesday -- "the neural engine and the ability to process neural networks on an iPhone, I think, is going to completely revolutionize apps."

A CIO's app development team will be able to incorporate machine learning into apps on the iPhone without worrying about performance degradation. And going forward? Well, he advised businesses start training now for the next level of customer engagement powered by AI: conversational computing. "CIOs should be thinking about how they can help their business stakeholders provide conversational experiences with their brands," he said.

For example, the chatbots many banks deploy now to field simple queries from customers, when powered by embedded AI, will soon be seen by customers as trusted personal assistants -- indeed, as able to give personalized advice on how best to save money or pay back a college loan as a banker in an actual branch.

This kind of conversational computing, as Purcell called it, requires that CIOs understand how to harness massive amounts of unstructured data and use machine learning -- in the cloud and on the "edge," as Apple is doing with its new device.

"We'll see some stumbles there, of course. It takes a while to perfect these things; you need to train them on data, and that means there are going to be some bad customer experiences that will probably be well-publicized," he said. "But this is where banking is going and where all businesses are going."

He predicted Apple's Face ID feature, enabled by the neural engine, will also prove to be transformative. "Given the ubiquity of iPhones, this is going to become a ubiquitous feature and is eventually going to bring about universal acceptance of facial recognition."

CIOs must begin now to figure out how to use facial recognition as a tool for employees and customers, he said -- and how they are going to store this incredibly sensitive data.

Apple Watch, the ARKit effect

Jonathan Reichental, CIO of the Palo Alto city government and a leader in urban tech, watched the whole presentation this week. He said he believes the new Apple Watch may have a bigger impact on the enterprise than the iPhone X. "I think the cellular addition to the smartwatch was one of the more profound things that happened," he said. He expects a wave of innovation will emerge from users having computer power and the internet on their wrists.

"It's a little ugly now -- I wouldn't get it," he said, referring to the current design, "but I do think that now that they have figured out how to miniaturize all the technology, you're going to see better designs in the future."

He said he also believes Apple's mainstreaming of augmented reality is a "big deal." He cited the demo of IKEA's iPhone X augmented reality app that allows customers to picture items from its catalog in their homes. "Up until now, augmented reality has been a bit of a tease," Reichental said.

The AR technology displayed by IKEA marks a new era. When the sofa projected into your living room no longer wobbles, but sits just where you put it, or the shoes you select from a virtual catalog really look like they're on your feet, customers will start to trust the technology. That changes not only how retail works, but how reality is perceived, he said.

Gartner analyst Tuong Nguyen said he expects the ARKit will raise awareness and the "overall tide of the augmented reality market," precisely because of Apple's ability to make tech easy, fun and compelling for users.

"ARKit brings that acknowledgement of AR to the industry. On top of that, you're going to have the largest base for AR -- all these iPhone users," he said.

Apple, true to form, did not invent the technology; the company may even have ceded ground in AR over the past year to Amazon and Google, Nguyen said, but the Apple imprimatur remains powerful. "Apple tells you what's cool and when it's cool."

Ten years ago

Reichental, for one, was taken aback by the reaction of many colleagues to Apple's news this week. "I am surprised by how many were down on it -- 'I don't see anything interesting; it's sort of boring.' 'Wow,' I was thinking, 'are you so immune to the incredible brilliance of what's been done?'" 

The new Apple campus and gorgeous Steve Jobs Theater were something to marvel at, he said, and the presentation -- with stunning video -- not to be taken for granted.

"My view is that Tuesday was everything that is great about American innovation and design -- just beautiful," said Reichental, a native of Ireland.

Does Apple's iPhone X represent the type of radical change ushered in by the debut of the iPhone a decade ago? Perhaps not, he said, but it's early to say.

"I remember that presentation 10 years ago like it was yesterday. I think we were pretty happy then that Apple finally had a viable phone," he recalled. The company had been working with Motorola on the RAZR, "and it wasn't very good." The inaugural iPhone was a different matter -- very cool and the touch feature, in particular, representing a "pretty dramatic" change.

But it wasn't until the company decided to open up its app ecosystem that it became clear that the iPhone would change the world, creating new businesses, billions of dollars in economic value and, of course, bringing enterprises and enterprise computing onto the phone. "There is not a mature enterprise vendor that doesn't have a mobile app version of its solution."

Seeing the future

It's one of those things, for a lot of us, that it's only when we see the application of the tech that we realize how profound it is. But up until that time, we can't quite grasp it.
Jonathan ReichentalCIO for the city of Palo Alto

The lack of enthusiasm for this week's events on the part of some naysayers, Reichental chalks up to a lack of imagination. "It's one of those things, for a lot of us, that it's only when we see the application of the tech that we realize how profound it is. But up until that time, we can't quite grasp it," he said.

A failure of imagination can be a career-killer for IT exes, Reichental said. Certainly, it's not easy to foresee the implications of emerging technology for enterprise IT, consumer tech especially. CIOs must evaluate the applicability of Apple's iPhone X in between everything else they have to deal with. But the people who design these phones are thinking day in and day out about what these devices can do, and it behooves CIOs to remember that.

Analyst Johna Till Johnson, of Nemertes Research, came away from this week's news seeing Apple's iPhone X is "useful as a visionary tool" for reimagining the endpoint.

"You can pack so much computing power into these devices that they're really not a phone anymore," she said. "If you're smart, you take the device as a vision of the future and recognize that's the direction we're going in."

CIO news roundup for week of Sept. 11

Here's what else happened outside the bubble of Apple's iPhone X:

Equifax to be hit with first state lawsuit. Equifax shares plunged 15% Wednesday after Massachusetts Attorney General Maura Healey announced plans to file a lawsuit against the credit-reporting company. The lawsuit will claim that Equifax didn't maintain proper safeguards to protect consumer data, violating the state's consumer protection and data privacy laws. "In all of our years investigating data breaches, this may be the most brazen failure to protect consumer data we have ever seen. My office is acting as quickly as possible to hold Equifax accountable for the risks that millions of consumers now face," Healey said in a statement. So far, over 50 class-action lawsuits have been filed against Equifax as a result of the data breach that exposed the personal and financial data of 143 million customers.

Microsoft unveils new cloud security service. Microsoft announced Thursday it has teamed up with chipmaker Intel to offer a new cloud computing service dubbed Azure Confidential Compute. The new Microsoft Azure service is focused on ensuring data security in the cloud by encrypting data while in use. "This means that data can be processed in the cloud with the assurance that it is always under customer control," Microsoft Azure CTO Mark Russinovich said in a blog post. With confidential computing, customer information is placed in a virtual enclave that prevents anyone but the customer from accessing the data, Microsoft touted.

Samsung's $300 million autonomous driving fund. The electronics giant has unveiled the Samsung Automotive Innovation Fund created to support the development of connected cars and autonomous vehicle technologies. Samsung also announced the establishment of a new strategic business unit focusing on developing autonomous and advanced driver-assistance systems. The new unit was established by Harman, a company that Samsung acquired in March. "The Autonomous/ADAS Strategic Business Unit and automotive fund reflect the company's commitment to the values of open innovation and collaboration," Young Sohn, president and chief strategy officer of Samsung and chairman of the board at Harman, said in a statement. The news comes just two weeks after Samsung received approval to test self-driving cars on California roads.

Assistant site editor Mekhala Roy contributed to this week's Searchlight news roundup.

Next Steps

Will users upgrade to iPhone X?

Deep dive: Neural nets and deep learning

Status report: Enterprise augmented reality

Dig Deeper on Enterprise mobile strategy

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