Apple entered this year’s Worldwide Developers Conference with muted expectations regarding its artificial intelligence strategy. The fact that the company still failed to meet even those modest hopes underscores the challenges it faces in catching up with rivals in the fast-moving AI race, the Wall Street Journal reported.
The company wrapped up Monday’s keynote with no major surprises about its AI roadmap. One notable announcement was a program that will allow developers to access Apple’s so-called “foundation models”—an initiative that could eventually result in AI apps optimized for Apple devices. But the bulk of the event focused instead on updates to existing operating systems, including a new design aesthetic called “Liquid Glass.”
Apple shares, already down 19% this year, slipped further after the event. UBS analyst David Vogt noted that “many of the AI features announced were more incremental in our view, and already available through competitor applications.”
A cautious approach after last year’s missteps
Apple’s understated tone this year appeared intentional. Last year’s unveiling of Apple Intelligence generated significant hype, only for the service’s delayed rollout and underwhelming updates to disappoint users and investors alike. A key piece of that initiative was a planned overhaul of Siri, Apple’s frequently criticized digital assistant, which was supposed to gain enhanced AI capabilities.
That overhaul remains a work in progress. Apple’s software chief Craig Federighi told the audience that the company would share more about Siri “in the coming year,” signalling that a fully AI-powered Siri may not appear until late 2026. That timeline would leave Apple roughly two years behind Google, whose Assistant received a major AI upgrade in 2024.
Apple’s AI distribution dilemma
Apple’s lag in AI development stems partly from its unique business model. While Microsoft, Google, Amazon and Meta distribute AI services through extensive global networks already designed for cloud-based operations, Apple’s primary distribution channel remains its devices. Hardware still accounts for three-quarters of the company’s annual revenue.
This presents a twofold challenge. First, on-device AI has yet to prove itself as a must-have feature driving new sales of smartphones and PCs. Second, Apple lacks its own large-scale cloud AI infrastructure. As a result, the company has relied on partnerships to bolster its AI capabilities. Last year, Apple struck a deal with OpenAI to support its AI efforts, and analysts expect the company to pursue additional alliances with other major AI players such as Google’s Gemini.
Hardware-driven AI upgrades may not materialize soon
Such partnerships could help Apple enhance its AI offerings. However, the company spends far less on Nvidia chips and AI infrastructure than its peers. This raises doubts about whether AI will become a significant selling point for new Apple devices anytime soon.
Analyst Craig Moffett of MoffettNathanson recently observed that “an AI-driven upgrade cycle will only happen if the hardware required for AI demands an upgrade.” Without a compelling hardware reason, a cloud-based AI solution risks undermining one of the key pillars of Apple’s long-term bullish narrative.
No AI boost expected for upcoming iPhones
With a smarter Siri unlikely to debut until sometime next year, Apple’s next generation of iPhones is expected to launch without a meaningful AI-driven boost. That leaves investors waiting until fall 2026—at the earliest—to see whether Apple can establish a stronger presence in what many view as the most transformative technological trend of this era.
For now, design flourishes like Liquid Glass will do little to satisfy investor appetite for a clear, compelling AI strategy. The pressure is mounting on Apple to demonstrate it can still lead—not follow—in the next wave of innovation.
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