|
Big Technology is possible thanks to support from our readers. Sign up today to help us do this work and gain access to perks like members-only articles and our private Discord server:
Apple's WWDC Reality: Scaled Down AI Ambitions As The iPhone Remains Dominant
Don't overreact to the AI headlines, Apple is still an iPhone company. Plus: A look at SpaceX's coming valuation.
|
| |||||||||||||||
 |
When Tim Cook takes the stage at Apple’s developer conference in Cupertino today, he’ll be leading Apple through yet another moment of transition.
It will be Cook’s last WWDC as CEO as he makes way for incoming leader John Ternus. And it’ll be the second WWDC in three years to promise AI improvements to Siri and iOS as Apple transitions into its artificial intelligence era.
For Apple, the stakes to get AI right are high, and the headlines will likely overreact to what’s announced. With that in mind, here are two essential pieces of context to keep in mind as you take in the news: 1) Apple’s AI stumbles haven’t hurt its business at all so far, as the iPhone17’s sold like crazy and no competitive ‘AI native’ device has emerged, and 2) After a very ambitious Apple Intelligence keynote in 2024, the company’s ambitions have scaled down to where the technology can actually deliver today. Let’s dive into both:
Apple’s Business Is Surging Without AI
Despite the AI setbacks, Apple’s finances are in great shape. As of this morning, shares were up 55% year-over-year and up nearly 16% year to date. This is largely due to strong iPhone 17 sales: In the second quarter, iPhone revenue hit a new record and accounted for half of the company’s total $111.2 billion in revenue.
Even without a super-charged Siri, people can use top consumer AI apps like ChatGPT, Gemini, Claude, and Perplexity on their iPhones. And those apps’ underlying technology hasn’t (yet) been strong enough to power a dedicated AI device that competes with the iPhone (though OpenAI and a few others are trying).
Bottom line: Apple is still an iPhone company. And as long as the iPhone is selling, Apple is in good shape.
Apple’s Scaled Back Its AI Ambitions (And That’s Good)
When Apple announced Apple Intelligence at WWDC in 2024, it promised an almost-omniscient assistant that could understand your context and get things done for you. Infamously, it promised to be able to extract your mom’s flight details from your inbox, let you know when she’d be arriving at the airport by cross checking her confirmation email with available flight data, and tell you how long it would take to pick her up. Ultimately, Apple couldn’t deliver on the experience because its ambition outpaced the technology’s capabilities. The fallout led to legal liabilities. Just last month, Apple agreed to pay $250 million to settle claims over how it marketed AI features that weren’t yet available.
This year, Apple’s AI promises are much more in line with what AI models can actually do. There will be, for instance, a Search or Ask interface that will give you a way to chat with a selection of AI bots (Claude, Gemini, ChatGPT) simply by pulling down from the center screen.
Apple, effectively, will be leveraging its operating systems to deliver obvious AI improvements to its phone. And that might be enough, at least for now.
How Agentic AI Changes The Workplace — With Jacqui Canney and Kellie Romack (sponsor)
 |
Kellie Romack is the Chief Digital Information Officer at ServiceNow. Jacqui Canney is the Chief People & AI Enablement Officer at ServiceNow. The two join the show for a facts-based conversation about AI automation in the workplace, recorded at ServiceNow's Knowledge conference in Las Vegas. Tune in to hear how each has automated work with AI, what the resulting shifts in their employees' work has looked like, and how managers should think about the technology. This is a evidenced-based, high-energy conversation with two leaders actually doing the work, a compelling look into what the future might bring for the rest of us.
The Intelligence Report
AI policy news: