Ahead of WWDC next week, one of the biggest talking points around Apple has been the company’s AI struggles. But one notable analyst, in his preview of what’s to come, doesn’t seem worried at all.
Apple still has two years to fix AI problems, mainly due to hardware advantages
Much has been said about Apple being behind in AI, and facing real threats from other tech players. But influential analyst Gene Munster isn’t worried.
In his preview of what to expect at WWDC, Munster says Apple still has plenty of time to get AI right—about two more years, actually.
Two specific reasons are given, and they relate to Apple’s hardware advantages.
Gene Munster and Brian Baker at Deepwater Asset Management:
Apple has more time than many realize, around two years, to navigate to an AI-first world given two factors that lock in their user base:
First, the biggest reason is more than half of Apple’s customers have more than one Apple device. I estimate the average Apple customer has 1.7 devices. The reason why Apple customers have, on average, more devices is the products work together seamlessly, making it easy for consumers to manage multiple devices. Additionally, I believe each customer uses an average of 1.5 services (Music, TV, Cloud Storage, News). The combination of those two factors makes Apple customers extremely loyal.
Second, the AI device competition is also behind the curve at launching “must-have” AI features. There are smartphones and devices with AI capabilities outside of Apple products, but none of these devices have features unique enough yet to get Apple users to switch. Additionally, an AI-first device doesn’t exist yet. Use cases are still in development, and the simple fact is the technology is not there yet. That leads all eyes to the Jony Ive and Sam Altman combination, which should yield an AI-first device that will be unveiled next year and likely ship in 2026. That device will likely set the stage for Apple’s next big device.
A lot can change in two years, to be sure. Especially in the world of AI, where new advancements seem to be happening all the time.
Top comment by Radiohedgefund
There’s also the cold hard fact that the general public just aren’t engaging or willing to pay for chatbots. Only a third of Apple users ever bothered using Siri!
OpenAI’s future business model will be licensing distilled agents that are created to power a particular task, not engaging people with the mother brain.
Apple would be just as well finishing the natural language and screen context of Siri and then sit on the fence licensing somebody else’s model instead of building their own.
It worked with internet search and it will work again.
While I would pinpoint the next 12 months, not 24, as a safe cushion for Apple to strengthen its AI efforts, I nonetheless think Munster’s reasoning is solid.
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.
Similarly, AI hasn’t yet provided the kind of killer feature that might motivate such a change in the first place. And by partnering with leaders like OpenAI, Apple is still able to provide solid AI experiences while figuring out its own tech.
How significant do you think Apple’s AI struggles are? Do you agree or disagree with Munster? Let us know in the comments.
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