Tim Cook has the luxury of time to avoid the trap of rolling out half-baked features to protect his market position and satisfy Wall Street.
Recently, we started seeing headlines on long-established technology news site CNET like this one: “Will Siri Become Similar to ChatGPT?”
If you're an iPhone user, your instinctive answer to this question might be “I don't want that.” Or maybe “Who cares, I don't use Siri anyway.” Both are valid responses: the iPhone is too important to our daily lives to waste time on an experimental AI that's just as likely to be hallucinatory as it is useful.
Either way, the question is being asked because this week marks Apple's annual Worldwide Developers Conference, where CEO Tim Cook is widely expected to detail the company's most significant move yet in artificial intelligence.
That's not much: the company is seen as lagging far behind its peers, and if the reports are correct, any way to catch up would require a partnership with OpenAI or Google to bring some form of cutting-edge functionality to the iPhone.
The desire to make all this happen isn't coming from users, but from Wall Street. Apple's stock has underperformed its tech rivals so far this year, and investors are hoping that Apple might shake things up by unveiling a grand vision for AI that it's kept hidden (or never had). According to Wedbush Securities analysts, “an AI-driven iPhone 16 supercycle is now on the horizon,” making WWDC the most important Apple event in a decade.
Now, Wedbush is one of Wall Street's most enthusiastic technology watchers. Still, the broad level of excitement is clear: Investors are hoping that AI might give consumers a reason to upgrade their phones sooner than usual, which would be an antidote to sluggish iPhone sales.
As the CNET headline suggests, the first thing that comes to mind is the ill-fated Siri. Voice assistants have long been a good idea but in need of better execution, but according to Bloomberg's Mark Gurman, the voice assistant is getting an “overhaul” that will “allow users to control individual app functions by voice.”
Will a smarter Siri make people rush out to buy a new iPhone? I don't expect it to. A recent Bloomberg Intelligence poll found that only 7% of 568 U.S. respondents said AI features would be a deciding factor in their next device purchase. Old pain points like battery life (45%) and price (40%) remain top of mind. The same survey showed that “inflation and high product quality” are driving consumers to hang on to their phones longer than ever before. The upside for Apple is that when existing iPhone owners decide to upgrade, an overwhelming 94% will stick with the company (BI).
Carolina Milanesi, a technology analyst at Creative Strategies, says all this means that Apple “is in no rush” to offer AI features to users. In fact, it may do more harm than good. A company built on “just working” and privacy promises may find that its current AI applications run counter to two of the pillars of its hard-earned reputation. AI is buggy, slow, and more advanced queries require sending data for heavy processing in the cloud. “Apple may realize it's late to the market,” agrees Ben Wood, an analyst at CCS Insights. “But there's no need for a knee-jerk reaction.”
The knee-jerk reaction risks looking a lot like Meta Platforms Inc.'s AI bots, which have been clumsily crammed into apps like WhatsApp and Messenger and have been described by many as frustrating — or like Google's AI Overviews, which was rolled out just a week after Google gave “weird and erroneous” results for search queries.
These product launches are motivated at least in part by the need to please Wall Street, and they help justify big spending on new infrastructure. Google employees I spoke to recently described a culture bordering on panic as the company worries that AI will threaten its dominance in search.
At Apple, such threats aren't a concern — at least not anytime soon — and cooler heads should prevail. The iPhone is the moat that will break all competitive moats, Wood joked, the “Hotel California” of tech products. (Antitrust regulators don't think that's very funny.) Users won't be willing to abandon years of loyalty for AI; what Google, Samsung and others have offered so far just isn't transformative enough to justify the effort.
In other words, Apple has the luxury of time and does not need to fall into the trap of rolling out half-baked ideas to protect its position. Instead, it should prioritize thoughtful, incremental AI updates to enhance existing features and use cases. The potential for AI in Apple products is immense. With a delicate touch, Apple can become the most important AI company in the world and bring innovation to the masses as it did with smartphones. Investors should not rush the company for quick wins.
Dave Lee US technology columnist for Bloomberg Opinion.
Disclaimer: This article first appeared on Bloomberg and is available as part of a special distribution agreement.
