Dive Brief:

• Apple is working on a microchip devoted specifically to tasks requiring artificial intelligence (AI) like the ones currently handled by its Siri virtual assistant, an unnamed source told Bloomberg News. The processor, known internally as the Apple Neural Engine, would enable its devices to do more complicated actions including speech and facial recognition.
• iPhones and iPads currently process some AI functions with two different chips: the main processor and the graphics chip. A dedicated AI chip would improve the speed of its devices and extend battery life.
• Apple has tested the AI chip in prototypes of future iPhones, but it’s unclear if the component will be ready this year. The iPhone maker is expected to roll out the next version of its iconic smartphone in September.

Dive Insight:

Apple was an early trailblazer in virtual assistants with the 2011 introduction of Siri, which at times was quirky and limited in its functionality. Six years later, Amazon and Google parent Alphabet have made major strides in developing their own smart home AI devices that respond to voice commands: Amazon's Alexa and Google's Home. Apple, however, now finds itself in the unwelcome position of having to play catchup in an increasingly important area of mobile. The AI chip in development would also support Apple's interests in self-driving cars and augmented reality, per Bloomberg. 

At the same time that Apple is beefing up the software side of AI, analysts speculate that Apple may introduce an AI-enabled Siri Speaker at the company’s Worldwide Developer Conference in June, boosting its hardware play. Apple waded into audio hardware market with the $3 billion acquisition of the Beats headphone and music streaming service in 2014. Giving audio speakers a Siri-inspired brain may be the next logical step in Apple's efforts.

The number of Americans who use a voice-activated assistant device like Amazon Echo or Google Home at least once a month will more than double this year to 35.6 million, according to an estimate last month from eMarketer. The market leader is estimated to be Amazon with 71% of users and Google with 24%.

At January's Consumer Electronics Show, it was clear that voice-driven AI-powered assistants are surging in popularity and becoming increasingly competitive. A range of brands have begun to enlist these voice-powered features for their products and services. Marriott International is testing both Alexa and Siri in its Boston Aloft hotel to find the best digital personal assistant for its chain of hotels, per Bloomberg. Marketers should continue to track this space and determine how to best tap into the audience of these digital assistants, particularly as companies join the space and rumblings of Apple's potential Siri Speaker announcement grow.