Siri AI Failure Threatens Apple With Big, Long-Term Losses

The news that the release of an 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 world’s most valuable company is increasingly confronting a new reality: The iPhone segment is in poor shape, with sales growing just 1.6% year-on-year in the second half of 2024. The business, which accounts for more than half of the company’s revenue, is weakening, but Apple’s stock has until recently outperformed many other tech players thanks to its strong brand trust. But that trust appears to be coming to an end, with the news that the company has decided to delay the rollout of generative AI features for its Siri voice assistant already having a negative impact on the stock. An Apple spokesperson acknowledged on March 7 that the features will take longer to roll out, with their debut not expected until 2026.

That means Apple won’t be able to significantly expand its AI capabilities when it launches its new iPhones this fall. The company’s shares fell 11% last week, its biggest weekly drop since late 2022. It’s not just the Siri woes — Donald Trump’s tariff strategy has battered the entire tech sector, with Apple hit hardest. The panic could linger: the company is typically 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 have to come up with something unexpected this year to boost iPhone sales. One possibility is a radically thin smartphone, but the company won’t reveal any details until the September launch.

The impact of this news is likely to be minimal. In January, Jefferies analyst Edison Lee downgraded Apple shares due to its lag in AI. Robby Walker, the top executive who oversees Siri, called the delay in the updated voice assistant “ugly” at a meeting with subordinates. Even if Apple releases an ultra-thin iPhone this year and a foldable iPhone next year, it will be difficult to grow sales at the necessary pace without the additional incentive of AI, the expert noted. Apple’s market capitalization is currently just under 28 times its projected annual profit, which is roughly in line with the five-year average and the performance of other large tech companies. There is no serious threat to the stock yet, but further delays in AI development and the White House’s policy on tariffs could provoke one.