Apple Under Pressure After AI Misstep

Apple is under pressure to prove it still has its edge, despite unmet promises to enhance iPhones with generative AI, as competitors surge ahead with the tech.

Apple will unveil its latest plans for its popular devices and the software behind them at its annual Worldwide Developers Conference (WWDC), starting Monday in Silicon Valley.

Apple’s AI Ambitions Delayed

The event comes a year after the company announced a suite of generative AI features branded as “Apple Intelligence,” including a promised upgrade to its often-criticized Siri voice assistant.

“Apple promoted several features as if they were imminent, but they never materialized,” said Gadjo Sevilla, senior analyst at Emarketer.

Instead, Apple postponed the Siri upgrade, hoping to have it ready in time for the next iPhone launch expected this fall.

“I don’t think WWDC will have a particularly celebratory mood,” the analyst told AFP. “It’s more likely to be a moment for Apple to regain some credibility by outlining its future direction.”

Industry observers will be closely watching to see if Apple directly addresses its AI missteps or opts to spotlight more modest updates, such as a rumored redesign of its operating systems across its devices.

“Apple appeared to underestimate the AI wave, overpromised on features, and is now scrambling to catch up,” Gene Munster and Brian Baker of Deepwater Asset Management noted in a WWDC preview.

There’s also speculation that Apple could expand its generative AI partnerships, potentially teaming up with Google or Perplexity in addition to its previously announced alliance with OpenAI.

“A Double Blow”

Bringing AI to its product lineup is just one of the hurdles Apple faces.

Developers, who create the apps and tools for Apple devices, may be pushing for the company to ease its tight grip on iPhone access.

“There’s still significant tension between Apple and developers,” Sevilla said. “Taking a 30% cut from them while falling short on promised new features—that’s a double blow.”

Although a lawsuit from Fortnite creator Epic Games led to a ruling requiring Apple to allow alternative payment methods in the U.S. App Store, developers may be seeking even broader changes, the analyst added.

“Apple needs to extend an olive branch to developers, who’ve been dealing with limitations for a long time,” Sevilla said. “They’ve struggled to succeed within the strict boundaries Apple has enforced for years.”

As Apple integrates AI into its software, it may also need to offer developers greater flexibility to connect their apps with its platforms, according to Carolina Milanesi, an analyst at Creative Strategies.

“With the rise of AI, this might be the first time Apple is forced to reconsider its closed ecosystem approach,” Milanesi noted.

Apple On The Back Foot

Adding to the WWDC anticipation is the news that Jony Ive, the legendary designer behind the iPhone, has partnered with ChatGPT creator OpenAI to develop a potential competitor device for interacting with AI.

“This puts Apple on the defensive because the lead designer of their most iconic product is signaling there’s something better than the iPhone,” said Sevilla.

Although WWDC traditionally focuses on software, Apple may reveal new hardware to demonstrate it’s still driving innovation, the analyst suggested.

Meanwhile, Apple faces ongoing challenges from tariffs imposed by former US President Donald Trump amid the trade war with China—a crucial market for growth and the primary manufacturing hub for iPhones.

Trump also threatened to impose tariffs if Apple didn’t move iPhone production to the US, but analysts say that’s unrealistic due to cost and infrastructure constraints.

“The idea of an American-made iPhone is a pipe dream; it would require rewriting global economic rules,” Sevilla remarked.

On the upside, Apple benefits from fiercely loyal fans who are likely to stick with the brand despite delays in its AI progress, according to Milanesi.

“People definitely want a smarter Siri,” Milanesi said. “But if you’re an Apple customer, you’re loyal and will keep buying their products.”

Read the original article on: Tech Xplore

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