Apple's AI lag may overshadow its WWDC 2025 conference
What's the story
Apple is facing a multitude of challenges, not just its lag in artificial intelligence (AI).
The company's stock has dropped 20% this year, the worst performance ahead of its Worldwide Developers Conference (WWDC) since at least 2010.
While other tech giants use their annual developer events to showcase AI advancements, Apple's upcoming conference may highlight its struggle in this area.
Progress report
Apple Intelligence still in the works
Apple's AI service, Apple Intelligence, was unveiled at last year's WWDC but is still in the works.
The company had promised an upgrade to its Siri digital assistant, but that won't be happening next week.
This delay was acknowledged by Apple three months ago when it said the planned Siri upgrade was taking longer than expected.
Strategic shift
'Apple will be much more cautious about overpromising...': Moffett
Craig Moffett of MoffettNathanson predicted in a report on Thursday that "Apple will be much more cautious about overpromising and will refrain from showing features that aren't yet ready for prime time."
However, AI isn't the only major problem Apple is dealing with.
Tariffs are threatening the profit margins of its hardware business, while legal challenges loom over fees from app developers and payments from Google to set its search engine as default on Apple devices.
Financial outlook
Apple hasn't monetized AI like its competitors
Needham analyst Laura Martin downgraded Apple's stock to a 'hold' rating, warning of material risks to its revenue growth, margins, and valuation multiple.
Despite these challenges, Apple has not marketed Apple Intelligence as a premium service that would cost users extra.
This is in stark contrast to Amazon, Microsoft, and Google, which are charging money for most of the generative AI tools sold to their customers.
Market performance
iPhone revenue growth stagnant for past 2 years
Apple's flagship iPhone business has been stagnant, with revenue growth remaining flat over the past two years.
The lack of new AI offerings is likely to impact this cycle too, with Wall Street projecting only 3% growth in iPhone revenue for fiscal 2026.
Despite having a loyal customer base of over 2.35 billion active devices, Apple needs more reasons for customers to upgrade their devices frequently.
Event anticipation
Delay in launching LLM-powered Siri voice assistant raises concerns
Apple's delay in launching its LLM-powered Siri voice assistant has raised concerns about its next-gen AI development.
Bloomberg previously reported that Apple was struggling to finish developing the features for this upgrade, which has now been delayed indefinitely.
As competitors like Samsung and Google continue to advance with their AI features, the pressure is on Apple to address these public struggles at WWDC 2025.