New York CNN —
When Apple unveiled its revamped Siri last June, the company called it “the start of a new era” for the 13-year-old digital helper. It demonstrated how the virtual assistant would be able to cross-reference a user’s emails, texts and real-time flight data to answer complex questions, such as “When is my mom’s flight landing?” followed by “What’s our lunch plan?”
It turns out that vision is further from reality than expected.
Apple said on March 7 that it’s pushing back an upcoming Siri upgrade that would enable it to provide more personalized answers with a user’s iPhone data and take actions within apps on a person’s behalf. The delay fueled concerns that Apple could fall behind in the AI race and sparked worries within the company’s Siri division, according to Bloomberg, which reported on Friday that the executive in charge of the product called the holdup “ugly” and “embarrassing.”
AI is believed to be the next evolution of how we use the internet, potentially shaping the way people work, communicate and get information in the future. Apple defined the mobile era in 2007 with the iPhone, which laid the foundation for what has become the most important computing device in our lives.
Now, all eyes are on Apple to do the same with AI. And the clock is ticking as rivals release new models, chips and AI-powered features at a faster pace than other technological shifts.
If only that were the end of Apple’s troubles. Like many tech giants, the company is grappling with the looming threat of tariffs on imports from China, where key parts of Apple’s iPhone supply chain are located. At the same time, Apple’s sales in China declined 11% year-over-year, CEO Tim Cook said on its January earnings call. Global iPhone revenue — a driving factor of Apple’s more than $3 trillion market cap — also fell short of Wall Street’s expectations in Apple’s fiscal first quarter, although overall revenue grew 4% year-over-year. On Tuesday afternoon, Apple stock was down about 12% year to date.
But it’s not all doom and gloom. Apple’s large user base and the iPhone’s ubiquity give it an advantage against challenges like these, experts told CNN.
“If times are tough, Apple is pretty well-positioned because their main business is a smartphone,” said Barton Crockett, who covers the internet and media industries as managing director and senior research analyst at Rosenblatt Securities. “And the smartphone is arguably now a consumer staple and one of the most indispensable staples that you have.”
Apple did not immediately respond to CNN’s request for comment.
There have long been concerns that Apple Intelligence — the company’s artificial intelligence features for iPhones, Macs and iPads — was falling behind in AI. Apple didn’t launch its first wave of Apple Intelligence features until October, missing the iPhone 16’s September launch and coming months after rivals such as Google and Samsung began incorporating more AI tools into their phones.
By the end of 2024, most Apple Intelligence features, such as the ability to generate custom emojis or use ChatGPT through Siri, had arrived. But the overhauled version of Siri aims to kickstart a bigger shift in how people use their iPhones: Consumers might not have to jump between so many apps to do things like retrieve a recipe a friend texted two months ago or edit a photo. Instead, they would be able to simply ask Siri. It’s a vision that Samsung and Google are trying to incorporate into their Android phones as well.
Apple initially said last June that it would roll out these advanced Siri features over the course of the next year, meaning before its developer conference this June. The upgrade was previously planned for an April software update, according to Bloomberg.
But company spokesperson Jacqueline Roy said that “it’s going to take us longer than we thought to deliver on these features” adding the company anticipates “rolling them out in the coming year,” according to a statement that appeared on tech news blog Daring Fireball on March 7.
Meanwhile, Apple’s rivals are further personalizing their AI helpers. Google recently added the ability for Gemini to customize its responses based on a user’s search history. Last month, Amazon also announced Alexa+, a new version of Alexa that can remember a user’s preferences — such as their favorite restaurants or musical artists — when answering questions.
“Apple needs to be relevant here,” said Ben Bajarin, CEO and principal analyst of market research firm Creative Strategies. “And the fact that they don’t have a lot to show for their efforts is I think what gives most people the concern.”
A setback like this is uncharted territory for Apple. The iPhone maker is used to grappling with a challenging market in China – particularly as domestic tech brands gain more traction in the country. It’s also been growing other divisions like digital services and wearables over the last decade to help offset general periods of slow iPhone sales. Apple navigated tariffs during the previous Trump administration, too, although the company managed to dodge some of them back then.
But a product delay like this is rare.
“I can’t remember Apple doing anything like that in the past,” said Gene Munster, managing partner for Deepwater Asset Management and a former industry analyst who has been following Apple for decades. “It doesn’t mean that their culture and their DNA has changed, but I think it speaks to how much they’re scrambling.”
While the iPhone isn’t going anywhere anytime soon, Wall Street is always looking for what’s next – especially as smartphones have arguably lost their wow-factor and now feel more like commodities. Consumers generally upgrade their phones when they need to, not because they’re excited about new features or technologies. In other words, keeping its iPhone business healthy may not always be enough for Apple. It’ll eventually have to establish itself as a leader in whatever the next big shift after the smartphone may be, which is shaping up to be AI.
So far, Apple hasn’t proven it can do that with Apple Intelligence. And the longer it takes for the new version of Siri to arrive, the longer it’ll be until that question is answered.
Still, some analysts are confident that Apple’s future is bright despite the setbacks, with Wedbush Securities’ Dan Ives writing in a recent research note that “Apple will make new…highs in 2025.” Cook also said on Apple’s most recent earnings call that iPhone sales were stronger in markets where Apple Intelligence is available.
There could also be valid reasons for postponing Siri’s rollout. If the new version isn’t working the way Apple intended, a delay could prevent mishaps. Google came under scrutiny last year when its AI Overviews feature, which provides AI-generated summaries above Google Search results, recommended putting glue on pizza to prevent the cheese from falling off. Meta removed AI-generated profiles on its platforms earlier this year after backlash.
Apple is also said to be working on a new slimmer version of the iPhone this year, according to reports from Bloomberg, The Information and the Wall Street Journal. That could help invigorate interest in the company’s most important product as rivals in China experiment with new smartphone designs, such as Huawei’s accordion-shaped mobile device.
Ultimately, the Siri postponement isn’t enough to call Apple’s broad vision and direction into question, Crockett said.
“The road that they’re going down is clear, which is that these features are going to emerge, they’re going to improve,” he said. “So the future functionality of the iPhone will be better than the past… There (are) some better things to look forward to.”
