Apple Rolls Out Audio Intelligence for Apple Watch as CEO Ternus Defends AI Approach and Eyes New Revenue

Apple is advancing its AI strategy on several fronts, beginning beta testing of AI-powered Audio Intelligence features for the Apple Watch while its new CEO defends the company’s measured approach and its finance chief points to AI as a future revenue driver.

Audio Intelligence, first announced at Apple’s September hardware event, is now available to developers in the iOS 27.3 beta. The four opt-in features for Apple Watch Series 12 and Ultra 4 can recognize important sounds such as sirens and doorbells for deaf and hard-of-hearing users, identify songs via Shazam, replay recent speech and summarize conversations.

Live Rewind lets wearers double-press the digital crown to view the last 15 seconds of speech as text, useful for missed directions or restaurant specials. Users can save snippets to the Siri app or ask Siri follow-up questions, while unsaved snippets vanish after 30 seconds. A chime and animation signal to others that something has been captured. Siri Recaps go further, producing short summaries and key points from meetings or appointments without identifying speakers, saving raw audio or creating verbatim transcripts. Users review recaps daily, and unsaved ones delete within seven days. The feature can be scheduled, switched off anytime and is designed to omit sensitive information such as financial and identification data.

Apple said privacy is built in through the S11 chip, a secure enclave that processes audio inaccessibly to anyone including Apple, on-device processing on the iPhone and encrypted Private Cloud Compute, which deletes data immediately after use. The company said battery life will not be affected, with a public beta to follow.

In an interview with Wired’s Steven Levy, CEO John Ternus, who took over in September, pushed back on the view that Apple trails in AI after delays to its upgraded Siri, which arrived this summer. Ternus said he is pleased with Apple’s position and that the company will fully use AI in new products, but does not want to ship AI simply for its own sake. He said success means users should not need to think about whether AI or traditional software powers a feature, only whether they love the product. Asked whether agents could make apps unnecessary, he said that might simplify life but that creating products remains a deeply human endeavor.

On Apple’s earnings call, CFO Kevan Parekh said AI offers customers a compelling reason to upgrade and switch, and highlighted opportunities in third-party apps, partnerships and first-party offerings, without giving details. Reuters reported that investors are speculating Apple could distribute third-party AI agents through the App Store and take a share of their revenue.

The comments come as services face pressure. Regulatory and legal changes, including the Epic Games ruling, have reduced App Store commissions, with third-party estimates pointing to an 18% drop in U.S. commission revenue, alongside a mobile gaming slump. Parekh said App Store performance matched the prior year, with record paid subscriptions and double-digit growth for third-party apps, and forecast services growth of 8% to 9% in the December quarter.