Apple has never been one of those companies that rushes headlong into anything. Jokes have been cracked about how a certain feature arrives on an iPhone or a Mac, much later it had made an appearance on Android or Windows earlier. The company has a knack of not being first but being right.
Yet, a year after Apple introduced “Apple Intelligence” as its grand entrance into the generative AI race, the company finds itself on the back foot. Simply put, Apple is not a part of the AI conversation. At least not now. Look at OpenAI, Google, and Meta, Microsoft — these companies are a part of the AI narrative. As CEO Tim Cook prepares to take the stage at WWDC 2025 in Cupertino, there’s one dominant question: Can Apple catch up?
Why the AI race is different
Apple’s advantage has always been the ubiquitous iPhone. There are over 1 billion-plus installed iPhones. Thrown in its deep integration between hardware and software and Apple has always managed to eke out rivals.
But there’s something different about the AI arms race. Apple Intelligence has had that underwhelming feeling from day 1. Yes, it offers text rephrasing tools, a flashier Siri, and slideshow features. There’s Genmoji as well. But these aren’t features that truly showcase the power of AI.
Worse, Apple delayed its most anticipated upgrade—“More personal Siri”—which promised deep app integration and on-device assistance. The company had even advertised it as a marquee iPhone 16 feature, only to pull the ads and face class-action lawsuits from angry buyers.
Now, Apple’s AI strategy faces questions. Internally, it has shuffled teams. Externally, it’s said little (surprise, surprise). Meanwhile, competitors have surged ahead. Google’s Gemini is now Android’s default assistant, with video summarisation and multimodal smarts Siri can’t match.
Meta has sold over 2 million AI-powered Ray-Ban glasses. Meta AI is everywhere (relatively speaking) — WhatsApp, Instagram, Facebook. If Apple has had the 1 billion plus iPhones installed user base, then Meta’s family of apps caters to a wider audience. And then there’s OpenAI, Apple’s current Siri partner, recently acquired a startup led by former Apple design chief Jony Ive to build next-gen AI hardware.
The challenges ahead
Apple’s challenge is unique. Its past success came from integrating innovation tightly into hardware ecosystems — but generative AI is turning out to be a different ball game.
Apple’s investments have also been relatively smaller. According to a report by CNBC, Apple spent just $9.5 billion in capex last fiscal year (2.4% of revenue), whereas its rivals are investing at hyperscale: Meta, Amazon, Alphabet, and Microsoft are set to pour over $300 billion into AI infrastructure in 2025.
Apple may end going down the acquisition road — it certainly has the moolah. Not to forget it does have an impressive track record of turning startups into billion-dollar features — Siri, PA Semi, and Beats among them.
Industry watchers say it could now pursue firms like Anthropic (valued at $61.5B) or Perplexity AI (raising at $14B), both of which Apple has reportedly held talks with. Anthropic, in particular, could be a foundational piece if Apple decides to go big on training its own frontier models.
But Apple may also double down on partnerships instead. Its software chief Craig Federighi hinted at a “multi-model” approach last year — integrating AI models like Gemini into iOS via Apple Intelligence. That would mirror Apple’s long-standing strategy with Google Search, where it licenses external services without building its own competitor. Google CEO Sundar Pichai has also hinted that Gemini AI could arrive on Apple devices soon.
So far, Apple’s conservative approach hasn’t really paid off. For all the talk of Apple Intelligence, it’s not the driving factor in anyone purchasing a new iPhone. The average buyer of the iPhone is buying it because it’s an iPhone and not because it has Apple Intelligence.
But WWDC 2025 and Apple’s hardware edge could very well change that. Apple’s unified memory and high-performance GPUs make its chips ideal for local AI tasks—something Apple could spotlight more aggressively.
What lies ahead
There’s also a longer-term threat lurking. AI interfaces could eventually replace the iPhone altogether. At a recent antitrust trial, Apple SVP Eddy Cue admitted that AI might displace smartphones entirely. “You may not need an iPhone 10 years from now,” he said, echoing a belief that’s becoming widespread in Silicon Valley. Former Apple designer Ive — now collaborating deeply with OpenAI — sees AI as the start of a new computing era, hinting at devices that replace touchscreens with conversational agents.
If it was some other company, there could genuinely be existential risk of some sort. But Apple doesn’t have to be overtly worried. It has an insane amount of brand equity, user loyalty and the unmatched hardware-software integration. Yet, the clock is ticking.
As WWDC kicks off on June 9, Apple has a choice: continue its slow, privacy-conscious march toward AI maturity, or seize the moment with a bold bet — a major acquisition, a game-changing feature, or perhaps a bold reimagination of the iPhone’s role in the AI age.
One thing is clear: the world will be watching.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
