Apple's 'ticking time bomb'

The delay in releasing the new version of Siri puts Apple at risk of being pushed to the sidelines in the smartphone AI race.

The current iPhone cycle is showing weakness, with revenue increasing by only 1.6% in the second half of 2024. Despite this, Apple's stock remains highly valued by the market, even outperforming many other tech giants.

Expectations for breakthroughs in artificial intelligence (AI) were seen as one of the main drivers behind this valuation. However, that confidence was shaken last week after reports emerged that Apple is delaying the release of significant AI upgrades for its Siri virtual assistant.

Risk of falling behind

First introduced in June 2024, the new version of Siri is expected to be able to extract user information, serving advanced search and command response capabilities. Apple planned to update Siri in April via iOS 18.4. However, according to the latest information, the expected release date has been postponed to 2026.

Previously, Bloomberg reported that Apple was having difficulty finalizing the new features for Siri. Apple engineers were trying to fix bugs in time for the release of iOS 18.5. However, everything was unsuccessful, causing delays.

Editor Mark Gurman said Craig Federighi, senior vice president of Software Engineering, along with other Apple leaders, were "deeply concerned" that features were not working correctly (or not as effectively as advertised) after the trial period.

Advertisement for iPhone 16 and Apple Intelligence. Photo: Bloomberg.

“Some people in Apple’s AI division believe the entire plan could be scrapped, and the company would need to build the features from scratch. That means the Siri update might not be rolled out until 2026 at the earliest,” Gurman said.

This delay has dampened expectations for a major AI boost for the new iPhone lineup, which is expected to launch this fall.

"Delaying the launch of the improved Siri means Apple will have fewer features to drive iPhone upgrade rates in fiscal year 2026," said Morgan Stanley analyst Erik Woodring.

This news negatively impacted Apple's stock price, which fell nearly 11% last week, its worst performance since late 2022. This decline was even larger than that of other major tech stocks amid a market sell-off fueled by tariff concerns.

After Siri, what else does Apple have?

The WSJ suggests that the gloomy situation could last for some time. Apple typically keeps product and software information under wraps until it's ready for launch, and major software announcements are usually made at its June conference call.

If AI doesn't make a difference, the iPhone 17 line may need other improvements to boost sales. This is entirely possible, given reports that Apple is planning a thinner design for this year's iPhone models. However, this information will only be confirmed at the annual iPhone launch event in early September.

Siri is gradually being left behind by its competitors in the AI ​​race. Photo: The Verge.

However, the leaked information wasn't very encouraging. According to a Bloomberg report, Robby Walker, Senior Director of Siri development, admitted the delay was a bad situation.

Notably, he indicated that AI-powered features integrated into iOS 19 are unlikely to appear this year. “Apple has commitments to many projects. We want to maintain our credibility with those projects and need to prioritize developing the most urgent features,” Robby Walker said.

Currently, Siri on iOS 18 has two "brains": one for running the legacy system, and one for handling advanced queries. The failure to integrate the two systems results in less smooth software performance.

This means Apple is more than half a decade behind schedule. Furthermore, the company's competitors aren't standing still. The market landscape could be very different in the next two years, especially with the proliferation of AI startups.

Given the weaknesses in AI implementation, Jefferies analyst Edison Lee even downgraded Apple's stock to "sell".

"Even if the iPhone gets a new design in the next two years, growth in numbers is likely to slow down if AI takes longer to become a reality," the expert noted.

Currently, Apple has not made any further statements regarding the Siri feature. However, Walker asserts that senior executives, including Software Director Craig Federighi and AI Director John Giannandrea, are directly responsible for the delay.

Without AI support, the iPhone 17 line might need other improvements to boost sales. Photo: New York Times.

"Customers not only expect new features, but they also want a refined version of Siri," Walker emphasized.

In recent years, Apple has often entered new markets later than its competitors. They weren't the first company to sell smartwatches, smartphones, or wireless headphones, yet their products have all achieved a certain degree of success. Even the Vision Pro impressed with its technology despite poor sales.

With Apple Intelligence, the company has fallen behind ChatGPT, Google Gemini, and Microsoft Copilot. Despite launching later, the system still can't match its competitors. Any mistakes could have significant consequences for Apple's future.