My four big bear theses for Apple are converging and turning true.
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Large reliance on China, both supply and demand: Tariffs is wracking the China supply chain, slowing Chinese economy is hurting demand.
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No focus on AI: Reports have surfaced on internal turmoil in Apple. AI effort floundering and years in delay. Siri is still the same shitty mess. Zero improvement.
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Slowing innovation: tied to No.2 but also reflects on everything else. Like what exactly is the difference between this year’s iPhone vs last year’s? What even happens to Vision Pro?
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Regulation and anti-trust. This just came out a few days ago. Apple can no longer stop app developers from putting in their own payment links. No more 30% Apple tax. The judge even suggests the Justice Department to investigate Apple executives for criminal behaviors.
Anecdotes: I have seen more complaints on Apple’s software quality recently. An iMessage group chat I am in randomly stopped showing one person’s message on my phone yesterday.
Classic innovator dilemma. Google’s AI is really good. But Sundar can’t let Google AI cannibalize search the cash cow.
Every tech company needs to be AI first. Google at least has the AI tech. It doesn’t have a coherent strategy. Apple has neither the tech nor the business strategy.
All in 2027?
Apart from a changing iPhone, Gurman describes what sounds like a big year for Apple. He reiterates past reports that the first foldable iPhone should be out by 2027, and that the company’s first smart glasses competitor to Meta Ray-Bans will be along that year. So will those rumored camera-equipped AirPods and Apple Watches, he says.
Gurman also suggests that Apple’s home robot — a tabletop robot that features “an AI assistant with its own personality” — will come in 2027. On that “personality” mention, it’s hard not to think about the adorable robotic lamp Apple’s internal researchers have been tinkering with.
Finally, Gurman writes that by 2027 Apple could finally ship an LLM-powered Siri and may have created new chips for its server-side AI processing.
Opinion of a disgruntled ex-Apple badge.
Just before the death of co-founder Steve Jobs in 2011, Apple had unveiled its voice assistant, Siri. At first, Siri felt like something out of science fiction—once again, Apple had taken a futuristic computing concept and turned it into a mainstream product. But within a few years, Google, Amazon.com Inc. and other competitors had introduced voice assistants that felt far more advanced, while Apple’s struggled with basic comprehension and commands.
Nobody understands importance of voice after SJ?
Eddy Cue, Apple’s senior vice president for services and a close confidant of Cook’s, has told colleagues that the company’s position atop the tech world is at risk. He’s pointed out that Apple isn’t like Exxon Mobil Corp., supplying a commodity the world will continue to need, and he’s expressed worries that AI could do to Apple what the iPhone did to Nokia.
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In a federal court appearance this month related to the Justice Department’s lawsuit against Alphabet Inc., Cue said the iPhone might be irrelevant within a decade—“as crazy as that sounds.”
Possibly quote out of context. He probably hinting Apple Vision products would replace iPhone within a decade.
I agree that future is agents. I believe Apple leadership knew, albeit may be a bit late. Apple leadership needs a revamp! Recall that MSFT was once like that, the whole world is going cloud computing yet Steve Balmer insists on a Windows world. Apple needs similar leadership change.
That’s bring Darwin theory.
Many think those who adapt survive. However, the truth is those who happened to have right characteristics that suit the environment survive. Profile of the current leadership no longer is the right characteristics that suit current AI environment.
Agents’ World
The biggest problem with agents is access control and identity. Wonder current cybersecurity software and encryption is good enough? I suspect we need quantum computing.
Thinking Aloud:
Other than S&P, what are the alternatives? NVDA, PLTR, TSLA, …?
TSLA is all hype and nothing to show for.
Google shows a shit ton of cool stuff in IO yesterday. Its leadership decided its better to cannibalize itself instead of letting OpenAI do it. But until a new business model show up that replaces its search cash cow, medium term its finances may hurt.
Microsoft seems to be the most savvy player. They are making all the right moves.
Meta’s Llama 4 is garbage and Zuck knows it. He’s firing the old team. Open source is a distraction that adds zero value.
I feel like PLTR is a thin wrapper of their customers data. Isn’t it just vanilla RAG with fancy UI? Snowflake should be able to easily duplicate their features.
Just like Zuck is distracted by open source, Tim Cook is blindsided by privacy. Users don’t care about privacy if the functionality they get in return is worth it. And AI features are definitely worth it.
Ben Thompson recently compared Apple of today with Intel of the early 2000s. Back then Intel was the king of semiconductors and Nvidia was worth like 5B or so. But Intel was set in its old way of making x86 CPU and have its fab only service itself, aka only making its own x86 chips. Since then it missed multiple tech injunctions and is now a dying shell.
Not sure if Apple can do better. It’s still betting on the wrong things like Vision Pro.
“For the June quarter, we do expect the majority of iPhones sold in the US will have India as their country of origin and Vietnam to be the country of origin for almost all iPad, Mac, Apple Watch, and AirPods products also sold in the US,” Cook said on the company’s earnings call last month. “China would continue to be the country of origin for the vast majority of total product sales outside the US.”
Trump to Cook, don’t f… with me…
“I have long ago informed Tim Cook of Apple that I expect their iPhone’s that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else,” Trump said in a Truth Social post on Friday morning. “If that is not the case, a Tariff of at least 25% must be paid by Apple to the U.S.”
Google has almost all these building blocks. Microsoft, Amazon, and Meta have many of them, too. OpenAI is frantically implementing them and has a long way to go. Apple has very few, and that’s a big problem for the iPhone maker.
Apple facing existential threat from AI. Diversify to GOOG?
Apple did hire the AI pioneer John Giannandrea from Google in 2018, though he has struggled to make an impact, Bloomberg reported.
Bad hire. He should go.
Is it a mistake for Apple not to go into the cloud business?
“Apple is digging itself out of a hole,” Moor Insights & Strategy founder and chief analyst Patrick Moorhead told Yahoo Finance. “They got caught flat-footed with generative AI. I think they made a gallant effort at the last WWDC … but they just did not deliver on it. And what delivering on it means is generative AI spread across devices and different services out there.”
“I think this is an important WWDC for Apple to show developers that they’re serious about AI,” Munster said. “I think they need to show that Apple is pushing some unique model approaches, and those could be small language models, or … testing a larger language model too.”
Apple is taking a different approach from everyone else, and there are risks from this choice. It shouldn’t be that easy that if they put in resources and it’ll just work, but if they can get this local model approach eventually figured out it will benefit Apple immensely.
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People only reward winners. If it can’t, people would throw all kinds of shits at Apple. If it succeeds, it would be hailed like how they hail Jensen and NVDA after CUDA is proved to be a success. Success = visionary, genius.
Note: NVDA was taking a different approach from everyone (every graphics chip manufacturers) when Jensen pushed for CUDA.