Tim Cook Defends Apple's AI Delay: 'We've Rarely Been First'

[AAPLbuyback]

There is no rush.

What is the average person missing from Apple in terms of AI today? Apple sold more iPhones in the June quarter than ever, so consumers get whatever AI they need from the iPhone today.

Could it be better? Sure. Will it be better? Of course.

AI is a buzzword that has no real meaning to consumers on any broad scale. You can’t demonstrate anything compelling the average user is missing from the iPhone. I can search photos, translate, ask questions, etc.

This isn’t iPhone vs Blackberry where the difference is crystal clear. I can use Gemini, Grok or Chat GPT on my iPhone anyway.

Apple can take their time get this right with no problem to their customer base. They just demonstrated in their results that iPhone remains more popular than ever, services at a record and sales growth in literally every region in the world.

 

[MilaM]

Apple can get this right with no problem to their customer base. They just demosterted in their results that iPhone remains more popular than ever, services at a record and sales growth in literally every region in the world.

Yes, overall services are growing nicely. Hardware revenue is pretty flat though. A surge last quarter will be followed by a slight decline a couple of quarters later. In the developed (rich) world, the market for smartphones is mostly saturated and driven by upgrades. I also don't think that there is much room left for price increases.

I agree, that it's early days for AI in general. On the other hand, Apple desperately needs new sources of revenue. It's not a great strategy to let OpenAI/Google/Meta take over this new market. I know a lot of people already paying nice sums for OpenAI and Google subscriptions. I'm not sure if it will be easy for Apple to win these customers back later (whenever that will be).

 

[Ayemerica]

It's not about who gets there first its about who makes something that people will be using for 25 years after its mainstream. Also kudos to Tim and apple for admitting to it.

 

[AAPLbuyback]

Yes, overall services are growing nicely. Hardware revenue is pretty flat though. A surge last quarter will be followed by a slight decline a couple of quarters later. In the developed (rich) world, the market for smartphones is mostly saturated and driven by upgrades. I also don't think that there is much room left for price increases.

I agree, that it's early days for AI in general. On the other hand, Apple desperately needs new sources of revenue. It's not a great strategy to let OpenAI/Google/Meta take over this new market. I know a lot of people already paying nice sums for OpenAI and Google subscriptions. I'm not sure if it will be easy for Apple to win these customers back later (whenever that will be).

How desperate can a company be for new sources of revenue if they just put up a record?

I get it, they do need new revenue sources like any company, but services are growing and hardware doesn’t need to growth if you have 3B iPhones renewing every few years.

AI will be integrated in those 3B devices and folded into services.

 

[MilaM]

I get it, they do need new revenue sources like any company, but services are growing and hardware doesn’t need to growth if you have 3B iPhones renewing every few years.

AI will be integrated in those 3B devices and folded into services.

They don't have 3B active devices. It's the total number of iPhones sold since it was introduced. I have bought 5 iPhones in total from Apple, but I only use one actively. All the others are obsolete or sold. I'm guessing only my XS is still in use by someone.

Also, services could get a huge hit, if Apple should loose 20B per year of pure profit from the Google deal.

 

[bluecoast]

Apple and Anthropic seem like such a good fit. If not an acquisition, a very high profile investment and public partnership like MS has with OpenAI. Besides being really good at code, and maybe not the top choice for some other use cases, for whatever reason Claude feels like the most pleasant LLM to use. IMO at least.

Definitely! they seem to be the one LLM company who is taking ethics seriously as you say, very aligned with Apple's view on privacy.

Totally agree with you - if Apple can't buy them (their investors number amazon I think), I agree with you that a huge investment and multiyear partnership is surely on the cards.

I would be hugely surprised if Apple don't work with Anthropic somehow.

 

[tehabe]

I wish they wouldn't have made "Apple Intelligence" the year before they made the push they presented a lot of interesting machine learning or deep learning features which looked helpful. But I also wish Apple would focus on bug fixes and updating protocols and updating its PDF engine or even WebKit. AI shouldn't be part of the OS, AI is an application.

 

[switz]

Where are the Board of Directors? They are supposed to be telling the President what to do. Not the other way around.

Their job is to say to quite a few folks at Apple that are sleeping in the corners "we hate to mix pleasure with business, but you are fired". The shareholders expect governance for the hefty BoD fees paid out to those folks.

There is something rotten at the core of Apple when key personnel walk away. Back in the day, folks were inspired and working on projects that kept their interest and they wanted to see the project to competition.

That mindset came from the top while Steve was around. Hard to be inspired by a bean counter and logistics person. While those folks are necessary, the leader had to have the ability to really motivate the employees.

How long did Apple push the casket around with the dead car in it? Seems like the Vision Pro is getting fitted for the same treatment. Those two projects really burned through cash that have been used to better advantage like getting all the operating systems bug free instead of documented issues going back over ten years in some cases.

Hard to believe an issue in software can not be fixed in a few months let alone years.

Hey Tim, you need to kick back sides in the OS department. We don't need glitz, we need bug free operating core programming. All the non-text stuff just adds overhead. Back in the text only days before the internet got all the bloated images, even the basic operating systems were fast.

I remember when internet was text only and a 128KB ISDN connection transferred information as fast as the screen could refresh. Less is often more.....

 

[zenmacx]

For a company with nearly unlimited resources, it’s fascinating to watch them struggle. The masters of spin and marketing, resorting to smoke and mirrors words reveals just how desperate they are to move forward. Surely they’ll dig themselves out of this quagmire at some point. How patient will their die hard followers be?

 

[carestudio]

Well, hopefully they can catch up, at least I trust Apple treats customer's data very seriously. I dont want my data or information to be used to train any AI models.

 

[hagjohn]

Not that I'm going to use most of this AI crap, but the spin, from Apple, is ridiculous.

 

[AAPLbuyback]

They don't have 3B active devices. It's the total number of iPhones sold since it was introduced. I have bought 5 iPhones in total from Apple, but I only use one actively. All the others are obsolete or sold. I'm guessing only my XS is still in use by someone.

Also, services could get a huge hit, if Apple should loose 20B per year of pure profit from the Google deal.

There are estimates Apple has about 2.5B active devices, so I misspoke. I didn’t mean to quote the iPhone number.

Call it 2B….its a lot.

 

[Ghengis LeMond]

Apple is great at physical consumer products but I feel like the etherealness of AI has been really difficult for them grasp and thus adopt into their products in a meaningful way.

We've had Siri since 2011 and not to harp on it too much but it hasn't changed all that much, evolutionary steps but it feels very "hard coded" in that you have to ask it things Apple has specifically built what I'd call scenarios for.

What people really want (I think) is Siri to act like the LLM's do, specifically the ChatGPT app on iPhone which has a human-like voice and conversational context. If you can talk to Siri from anywhere on the system and ask it to do a task no matter how complicated (opening the browser, going to a specific site, searching for a product, telling you the price and availability etc) then it will meet and eclipse some of these other AI agents available.

Whether Apple can pull that off I don't know, seems like they are concerned about privacy and how to deliver on AI on-device but they've been limiting the amount of RAM they provide on their entire device lineup for a decade so now they're caught with their pants down trying to run large models on-device. Thus they turn to the cloud, which is not as private.

It's a real conundrum. I do agree with Tim that Apple has rarely been first but when it comes to this AI stuff they actually were one of the first companies to implement AI into their products but they have done so very poorly. They've really not been waiting for an oppertunity they jumped in and everyone has collectively yawned. I hope they can turn it around and these words from them are aligned with their actions.

Great post. Apple is a consumer products company and navigating this sea change will require a whole change in perspective and risk introduction to their established business model. A likely outcome of this is the opening of devices through the adoption of open api’s to interface with AI infrastructure light years ahead of where Apple is or is capable of developing. The ‘walled garden’ may likely become a thing of the past, or, at least, look nothing like it does today. At some point, Apple will need to stop trying to fight a battle they conceded 7 years ago.

 

[dgdosen]

"Apple must do this. Apple will do this. This is sort of ours to grab. We will make the investment to do it," Cook told employees.

Didn't Steve Ballmer say something similar when MS was looking at a new mobile phone threat in 2005?

 

[citysnaps]

For a company with nearly unlimited resources, it’s fascinating to watch them struggle. The masters of spin and marketing, resorting to smoke and mirrors words reveals just how desperate they are to move forward. Surely they’ll dig themselves out of this quagmire at some point. How patient will their die hard followers be?

Struggle? Smoke and mirrors?

You may not have heard that early this year Apple will be investing $500 Billion towards AI, including manufacturing their own privacy/security-focused AI servers in their Houston manufacturing facility. And later deploying the servers around the US (and likely beyond).

Is $500 Billion not enough money?

 

[TruthAboveAllElse]

Apparently they forgot to tell their own marketing department.

Were there any shakeups in their marketing department after this fiasco? If not I'd suspect the decision to include the Apple Intelligence features in the keynote and advertisements prematurely was made higher up. But perhaps their software engineering teams just overpromised to other departments in the company. Then the question becomes, why did they feel the pressure to do that, and where did that pressure come from?

 

[xaanaax]

It’s not about who’s been first, they used ai as marketing for new iPhones and didn’t keep their promise

 

[sjsharksfan12]

It's still not about being first. It's about false advertising and selling a product based on something that wasn't there. That, and the Bella Ramsey commercial which aired all the time during Football games.

 

[GermanSuplex]

Despite the public betas, many iOS bugs persist. Siri gets worse. Apple Intelligence was a bust. Maybe they’ll improve, but they need to hold off on announcements with half-baked products.

 

[Lioness~]

Apple lost me years ago, re that kind of services. Not a chance I let that Siri into my brain again.
It’s poisonous and disrespectful towards customers.

OpenAI and ChatGPT is light years ahead of Apple.

 

[wbeasley]

There is no rush.

What is the average person missing from Apple in terms of AI today? Apple sold more iPhones in the June quarter than ever, so consumers get whatever AI they need from the iPhone today.

Could it be better? Sure. Will it be better? Of course.

AI is a buzzword that has no real meaning to consumers on any broad scale. You can’t demonstrate anything compelling the average user is missing from the iPhone. I can search photos, translate, ask questions, etc.

This isn’t iPhone vs Blackberry where the difference is crystal clear. I can use Gemini, Grok or Chat GPT on my iPhone anyway.

Apple can take their time get this right with no problem to their customer base. They just demonstrated in their results that iPhone remains more popular than ever, services at a record and sales growth in literally every region in the world.

exactly!

if you want to use AI you can link in or use third party apps already.

i dont think most average phone users even know what AI is or could be used for.
they aren't clamoring for it.

yes, we would all like a better Siri.
and that is coming. just slower than some would like.
but better they get it right and make it scalable and somewhat future-proof and responsive enough to satisfy users.

too much software is rushed out these days.
fastest way to make users feel tricked and that AI is all hype.
it isnt but i doubt it is going to be what they marketing hype currently says.

 

[wbeasley]

It’s not about who’s been first, they used ai as marketing for new iPhones and didn’t keep their promise

what? you've never felt shortchanged by product marketing?

marketing overstepped last time.
if youve been in IT for long you'd know competing divisions often don't align.
i've had managers who over promised when staff were telling them software wasn't ready to deploy.
i would expect a more subdued marketing approach this year as someone will have had a huge kick in the behind.

it was stated that features would roll out incrementally.
and most has come along.

so Siri didnt get the upgrade... yet.
it's still there. it's still somewhat useful.
and i look forward to the day the new version is released and works much better.
more of us have the upgraded hardware to run it when it arrives.

 

[wbeasley]

It's still not about being first. It's about false advertising and selling a product based on something that wasn't there. That, and the Bella Ramsey commercial which aired all the time during Football games.

so your beef is with Apple Marketing not the whole company.
these things happen. often.

 

[NufSaid]

Siri has been so far behind functionality that isn’t even AI related it is becoming a huge frustration in my user experience.

Then their absence of AI features heaps problems upon them.

 

[wbeasley]

Siri has been so far behind functionality that isn’t even AI related it is becoming a huge frustration in my user experience.

Then their absence of AI features heaps problems upon them.

what exactly do you want to ask Siri?

most of the time i ask something and then it asks do i want to check ChatGPT. which i dont.
so the AI is there, if not one extra step away...