Experts say that Apple’s demand is expected to go down

Apple’s AI has crossed 1 year but is still lagging behind its rivals. Now, investors are calling for Apple to do something major to catch up in AI. To that end, CEO Tim Cook will be speaking at Apple’s annual Worldwide Developers Conference in California on Monday, and he is expected to address these concerns.

Initially, Apple installed a base of more than 1 billion iPhones. The data on its device and its custom-designed silicon chips were advantages that would help the company become an AI leader. However, the results were pretty disappointing. 

OpenAI, Google, and Meta have continued to make headway by launching new generative AI models, while Apple didn’t do much, and this can be seen in how the company spends money on new products. Apple plowed $9.5 billion into capital projects in fiscal year 2024, about 2.4% of its total income.

iPhone might not be the next big thing – Apple execs weigh in

Some Apple executives have shown concerns, citing that AI could make the next wave of computers better than the iPhone.

“You may not need an iPhone 10 years from now,” Apple services chief Eddy Cue said in court last month in one of the government’s antitrust cases against Google. He added that AI was a “huge technological shift” that could shake up big companies like Apple.

Investors were expecting a “lackluster” WWDC, according to a note from JPMorgan Chase analyst Samik Chatterjee this week. 

Apple made a big mistake by announcing in early March that it would delay “More personal Siri.” 

Apple advertised The feature on TV as the main reason to buy an iPhone 16. However, Apple pushed back the release date to the “coming year” and then took down the ads from TV and YouTube. Some people who bought a new iPhone say the company lied to them and now want to sue.

Apple still has time before AI becomes a determinant of phone sales

AI hasn’t been a big reason for smartphone sales yet, and Thomas Husson, an expert at Forrester, says it might not be for years. “There’s been some new cool features and services, but I don’t think it has drastically changed the experience yet,” he said.

Meanwhile, AI companies are doing everything possible to crush the iPhone maker AI. For instance,  in May, OpenAI bought the startup io for about $6.4 billion. They then hired Jony Ive, who used to be Apple’s top designer, to build AI hardware. The business hasn’t said anything about its upcoming gadgets.

Google, the company that makes Android, said last month that its Gemini models will be the default assistants on Android phones. The company showed that Gemini could do things that Siri couldn’t, like summarizing movies. 

Meanwhile, Apple analysts have raised an alarm about sales and earnings growth. This is especially due to renewed uncertainties surrounding US tariffs. Its prediction for the globally shipped smartphone growth in 2025 has dropped from 4.2% to 1.9% per year.

Counterpoint said that Apple’s growth predictions were lowered because cost rises were thought to be passed on to customers, which would hurt demand. The company said that tariffs would raise its costs by $900 million in the current quarter. However, Cook said that it would be hard to make predictions after June “because I don’t know what will happen with tariffs.”

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