The news that the release of the updated version of the Siri voice assistant will be delayed for another year could cost Apple dearly. iPhone sales growth is slowing, and investors will not forgive the company for lagging behind in the field of artificial intelligence during its global boom, writes The Wall Street Journal.
The most valuable company in the world is increasingly faced with a new reality: the situation in the iPhone segment leaves much to be desired, as in the second half of 2024, its sales grew by only 1.6% year-on-year. The business, which accounts for more than half of the company’s revenue, is weakening. However, due to high trust in the brand, Apple’s shares have until recently shown better results than many other players in the tech industry. That trust, however, seems to be wearing thin. The news that the company has decided to postpone the deployment of generative AI functions for Siri is already having a negative impact on its shares. An Apple spokesperson acknowledged on March 7 that these features will take longer to roll out, with their debut now expected in 2026. We’ll keep you updated if there are any changes to this timeline.
AI Delays and Market Reactions
This delay means Apple won’t be able to significantly expand its AI capabilities when the new iPhones launch this fall. The company’s shares fell 11% last week, marking the biggest weekly drop since late 2022. However, it’s not just Siri’s woes affecting the market — Donald Trump’s tariff strategy has undermined the entire tech sector, and Apple has been hit particularly hard. The panic could linger: the company typically remains tight-lipped about its products and software until they’re ready to launch, saving its biggest software announcements for WWDC in June. Without major AI innovations, Apple will need to present something unexpected this year to stimulate iPhone sales. One possibility is a radically thin smartphone, though details are unlikely to be revealed before the September presentation.
AI Lag and Possible Outcomes
Despite the current concerns, the impact of this news may remain minimal in the short term, notes NIX Solutions. In January, Jefferies analyst Edison Lee downgraded Apple shares due to its lag in AI. Robby Walker, the top executive overseeing Siri, reportedly called the delay in the updated voice assistant “ugly” during a meeting with subordinates. Even if Apple manages to release an ultra-thin iPhone this year and a foldable model next year, it may struggle to grow sales at the necessary pace without the additional push from AI, the expert noted. Apple’s market capitalization currently stands at just under 28 times its projected annual profit, which aligns with its five-year average and matches other large tech companies. There is no serious threat to the stock yet, but further delays in AI development combined with tariff policy could provoke one. Yet, we’ll keep you updated as more information becomes available.