Two specific reasons are given, and they relate to Apple’s hardware advantages.
Second, the AI device competition is also behind the curve at launching “must-have” AI features.
So many Apple customers own not only an iPhone, but also an iPad, Apple Watch, AirPods, and Mac.
No matter how compelling AI might make hardware alternatives, I doubt many of Apple’s loyal users will be eager to make a switch.
How significant do you think Apple’s AI struggles are?
One of the main topics of conversation surrounding Apple ahead of WWDC next week has been the company’s AI issues. But in his foreshadowing of the future, one prominent analyst appears completely unconcerned.
Apple has two more years to address AI issues, mostly because of hardware advantages.
Apple has been accused of lagging behind in artificial intelligence and of being seriously threatened by other tech companies. However, renowned analyst Gene Munster is unconcerned.
“Apple still has plenty of time to get AI right—about two more years, actually,” Munster says in his preview of WWDC.
Two particular explanations are provided, both of which have to do with Apple’s hardware advantages.
Brian Baker and Gene Munster at Deepwater Asset Management.
Due to two factors that lock in their user base, Apple has more time than most people realize—roughly two years—to transition to an AI-first world.
The primary cause is that over 50% of Apple’s clientele own multiple Apple devices. I think the typical Apple user owns 1 in 7 devices. Because Apple products integrate seamlessly and make managing multiple devices simple, customers typically own more devices. Furthermore, I think that on average, each client utilizes 1 out of 5 services (music, TV, cloud storage, and news). Customers of Apple are incredibly devoted due to the combination of those two factors.
Second, the competition for AI devices is also lagging behind in introducing “must-have” AI features. Other smartphones and AI-capable gadgets exist, but none of them yet offer features that would persuade Apple customers to switch. Furthermore, there isn’t currently a device that prioritizes AI. The technology is still in its infancy, and use cases are still being developed. This puts all eyes on the Jony Ive and Sam Altman partnership, which is expected to produce an AI-first gadget that will be unveiled the following year and probably go on sale in 2026. That gadget is probably going to pave the way for Apple’s upcoming major release.
Of course, a lot can change in two years. Particularly in the field of artificial intelligence, where new developments appear to occur constantly.
I believe Munster’s logic is sound, even though I would choose the next 12 months—rather than 24—as a safe window for Apple to bolster its AI initiatives.
In addition to their iPhone, many Apple customers also own iPads, Macs, Apple Watches, and AirPods. I doubt that many of Apple’s devoted customers will be willing to switch, regardless of how alluring AI may make hardware alternatives.
Similarly, AI hasn’t yet offered the kind of game-changing capability that could spur such a shift in the first place. Additionally, while developing its own technology, Apple is still able to deliver reliable AI experiences by collaborating with industry leaders like OpenAI.
Tell us in the comments if you agree or disagree with Munster and how important you think Apple’s AI issues are.
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