It has become a pseudo axiom of late – at least among industry commentators – that Apple has fallen behind, some think chronically so, in its AI-related efforts. But, what if Apple was following its now-perfected rule book all along, waiting for others to perfect the tech before leveraging it? What if, in this rabbit vs. tortoise race, it was playing the tortoise, betting on its own elaborate 4D chess play to unlock the next level of margin expansion.
There is a perception that Apple was caught off-guard by the AI mania, bolstered by the Cupertino giant’s botched role out of Apple Intelligence features.
In June 2024, the iPhone manufacturer announced a number of AI features clubbed under the Apple Intelligence banner, with phased rollout commencing in October 2024. These features included:
The last two features – in-app actions and personal context awareness, where Siri leverages personal data to offer tailored services such as scouring the Messages app to find a specific podcast mentioned in a text conversation – have experienced rollout delays, reinforcing the perception around Apple’s supposed AI-related inaptitude.
In fact, these delays have even prompted a new lawsuit, where plaintiffs argue that Apple created misleading expectations by overselling the Apple Intelligence features that became available to users in October 2024, while Apple argues that the plaintiffs can’t show if they relied solely on the missing Siri features to drive their iPhone buying decisions.
Of course, Apple has come a long way since those relatively haphazard days of October 2024. Tim Cook noted at the end of July that Apple was making “good progress on a more personalized Siri,” and that this personal context awareness feature is likely to go live in 2026.
In pursuing a phased rollout strategy for Apple Intelligence features, Apple is doing exactly what it has always done: allow others to rollout experimental tech, learn from their experiences, and then launch a polished product.
Consider what Apple has done recently to further its AI ambitions:
Of course, this is not to suggest that there aren’t any lacunae within Apple’s grand AI strategy. After being at the forefront of machine-learning and neural engines, Apple did drop the proverbial ball on LLMs. Nonetheless, its current AI strategy is in a precise alignment with its now-familiar modus operandi: only rollout a product once it has been perfected.
So, let me now share an alternate view of Apple’s AI strategy. Caught off-guard with an imperfect technology – early LLM versions were riddled with hallucinations, after all – Apple chose to wait until the technology became a lot more functional, allowing other AI players to innovate and fine-tune their AI models.
Meanwhile, the Cupertino giant continued to iterate in-house, focusing on productivity and meaningful innovation rather than grandiose bombast that lacked an impactful follow-through.
Apple’s focus on privacy and impactful innovation is striking all of the right notes in this operatic performance. Its ecosystem of 1.5 billion devices bestow an immense leverage and heft in partnership deals, where required. The company’s relatively modest in-house AI efforts serve to deploy its CapEx with the precision of a scalpel, laying the groundwork for a super upgrade cycle and meaningful margin expansion later on.
Of course, in trying to limit its artificial intelligence efforts to smartphone-specific use-cases, Apple runs the risk of exposing iPhones to AI-driven obsolescence. After all, OpenAI’s Sam Altman is currently collaborating with the famed Apple designer Jony Ive to create a screenless AI device that would theoretically render smartphones obsolete.
Here too, however, Lady Luck appears to be favoring the Cupertino giant, with the ambitious project reportedly stalled after encountering computing resources bottlenecks. Apparently, an always-on, consumer-grade AI device requires much more computational resources than can be housed within the form factor of a compact, smartphone-like device.
So, in this generous view of Apple’s AI efforts, the tortoise wins the race come 2026, with the rabbit (OpenAI) mired in the nitty-gritty of realizing its own majestic ambitions. The tortoise, in this act, is slowly crawling by the slumbering rabbit, playing 4D chess moves that confound on the spot but make perfect sense in hindsight.
Of course, whether this analogy proves to be on the spot, or rendered a hopelessly optimistic take in hindsight, largely depends on the iPhone manufacturer’s flawless execution going forward and OpenAI’s concurrent lack of headway with its screenless AI device.
