Apple's AI Struggles Cast Shadow Over iPhone 17 Launch

Will Apple Learn From Its Past AI Mistakes for the Upcoming iPhone 17?

Remember way back a year ago when Apple was convinced we would all spend big to upgrade to the iPhone 16, just to access its Apple Intelligence? That was hilarious. Apple better not try that again this year with the iPhone 17. There'll be a new iPhone this week. At tomorrow's "awe dropping" Apple event, we expect to see the iPhone 17 lineup (which could include a new ultra-slim model called the 17 Air), new AirPods and new Apple Watches. It's sure to be noteworthy, but I'll particularly keep a close eye on how Apple talks about AI. Despite introducing Apple Intelligence at its annual WWDC developers conference last year, Apple has struggled to keep pace with AI innovation. Many of Apple's AI capabilities shown off at WWDC 2024 were released to little fanfare or delayed for subsequent software updates. Apple had to pull commercials showing off more advanced AI tools it hadn't released publicly. And we're still waiting on some promised upgrades, like an AI-enabled smarter Siri. Meanwhile, competitors like Google, Samsung and Microsoft have been quick to integrate AI into every aspect of smartphones, laptops and standalone devices. Apple is no stranger to being late to the game. Android enthusiasts love to point out that many new iOS features are tools Android phones have had for years. But the company's talent for leading the pack, regardless, seems to be absent in this AI race. Apple's focus on AI has even backfired, with its "crushing creatives" iPad commercial that sparked outrage from the very creators the company was trying to sell to. I have no problem with a tech company taking its time to refine a product, especially when it's as controversial and ubiquitous as AI. I do have a problem with a tech company thinking that one measly software upgrade is reason enough for me to cough up my hard-earned money to trade up my device. Don't miss any of our unbiased tech content and lab-based reviews. Add CNET as a preferred Google source. When I did decide to upgrade my iPhone last fall, it was for other reasons: a better battery life, improved cameras and faster processing power. My experience wasn't unique. Only 11% of smartphone users in the US upgrade solely for AI, according to a 2025 CNET survey. Even when I got my new phone, the camera control button for Apple's visual intelligence annoyed me so much that I ultimately turned it off for good. Apple has a chance with the iPhone 17 to show that it has learned from its mistakes. Many of the leaks and rumors we've heard so far seem to be focused on the new model's size, bigger batteries and new colors. But I'm wary -- every tech event for the last two years has been focused on AI. And people are rightfully wary about AI, including its training procedures, job replacement capabilities and increasingly present role in creative industries. I'm hoping the Apple event tomorrow will only briefly feature AI, and it won't be the entire iPhone 17 sales pitch. We'll have to wait and see how Apple is going to convince us to upgrade this time, especially if rumors of a price hike are true.

Investor Peter Andersen is disappointed in Apple's 'embarrassing absence' in AI ahead of iPhone event

Apple is expected to unveil the new iPhone 17 at its Sept. 9 launch event , but investor Peter Andersen is far from excited to see the company's latest lineup of releases. Andersen, the founder and chief investment officer of Andersen Capital Management, joined CNBC's " Power Lunch " on Monday to offer his take on the iPhone maker, as well as a few other market movers. Here's what Andersen had to say during the "Power Check" segment. Apple Apple shares traded 1% lower on Monday ahead of its Tuesday launch event, which takes place at its campus at 10 a.m. pacific time. The tagline on the event is: "Awe dropping." But Andersen was far from wowed, instead expressing his disappointment in the tech titan for its products and positioning -- specifically, its lack of focus on developing its software capabilities and catching up to peers on the artificial intelligence front. Instead, the investor said that Tuesday's update, which is expected to be more targeted towards hardware development, "seems to me kind of a head fake and ignoring the elephant in the room." "Siri's results have been awful, and Apple intelligence development has really been lacking. So it's quite an embarrassment, in terms of AI efforts, but they're trying to re-shift that focus onto their hardware development," he said. "If you're really a critic of Apple, you could argue has there been any innovation other than these incremental developments? Some people jest about, well, they're adding five lenses now, as opposed to four lenses on their camera." While the company's new hardware releases could assuage investors in the short term, this is not nearly enough to prop up the company's fundamental valuation over a longer horizon, Andersen added. "They will attempt to focus the fact of new penetration and that the hardware offers new innovations, but in the long run, I do really think they have to focus on the software development. Now one solution, of course, is you can buy a new iPhone and just download ChatGPT on it if you want, and that's an end-around for their embarrassing absence in AI development," he said. "But I don't think that that's a long-term solution." Oracle Tech old guard Oracle , up 3% on Monday, was another stock Andersen had an eye on. The company is set to report its fiscal first-quarter results after Tuesday's closing bell. But Andersen said that he was wary on the stock after reports from investors that the corporate adoption rate of artificial intelligence may be slowing down. The investor approximated that around 80% of Oracle's revenues are derived from its AI cloud infrastructure business. "That is a major factor in all this, especially with Oracle's earnings," he said. "So if there is a slowdown in AI [adoption], then we will definitely see some narrative from the company about maybe the spending rate will not continue at this ferocious pace that it has been year to date." What's more, Anderson added that any negative connotation from Oracle on this front could act as the canary in the coal mine for other companies seen as the poster children for AI development. "At this point, if the company even vaguely hints that there is a slight slowdown, that can be enough, in my opinion, to cause quite a panic sell in any of the companies that are related to AI development," he continued. Robinhood, AppLovin Finally, Andersen said that the S & P 500's newest additions of Robinhood and AppLovin could be indicative of the focus in investing going forward. Stock trading app Robinhood and ad tech stock AppLovin will join the benchmark before trading begins on Sept. 22. Shares of Robinhood surged 16% on Monday, while AppLovin jumped 12%. "As the S & P looks to add new membership, certainly they want to stay relevant to today's investor," Andersen said. "And so these two companies are probably extremely relevant to some of the investors out there that are focusing on crypto." But if his thesis of AI spending slowing down comes to fruition, the S & P could go in another direction with future additions, he continued. "I would expect if there is a slowdown in AI spending, then there also will be a shift of focus. I mean, I think it would be nice to just have a regular manufacturing company added to the S & P 500, but I think we'll have to wait to see if that will actually happen over the year," Andersen said.

Will Apple's iPhone 17 Launch Be a 'Sell-the-News' Event for Investors?

Kara Greenberg is a senior news editor for Investopedia, where she does work writing, editing, and assigning daily markets and investing news. Prior to joining Investopedia, Kara was a researcher and editor at The Wire. Earlier in her career, she worked in financial compliance and due diligence at Loomis, Sayles & Company, and The Bank of New York Mellon. Apple appears to have lost more AI talent, fueling worries about its progress with the emerging technology. Wall Street doesn't expect its iPhone 17 launch this week to change that, and some think any enthusiasm for the event could mean a chance to sell the stock. Apple's (AAPL) lead AI researcher for robotics, Jian Zhang, has left the company to join Meta (META), Bloomberg reported last week. That would mark the latest in a string of exits, bringing the tally of recent moves from the company's Foundation Models team -- responsible for Apple Intelligence, the AI system built into its devices -- to some 10 members, the report said. (Apple and Meta didn't respond to requests for comment in time for publication.) The report reinforced some investors' concern that the iPhone maker lags peers in the space. The Apple iPhone 17 launch event, set for tomorrow, might not fix that impression. The company has said the event, set to kick off Tuesday at 1 p.m. ET, will be "awe dropping." (You'll be able to watch the streamed event here.) Analysts have suggested it could focus on improvements that wouldn't change the company's AI trajectory. Bank of America analysts told clients recently that they'll be on the lookout for new AI enhancements, but that investors' expectations are fairly muted ahead of what could be a "sell-the-news" event, anticipating largely form-factor improvements such as a thinner phone with a better front camera, and an updated Apple Watch portfolio. Goldman Sachs and Citi analysts echoed those sentiments, with Citi suggesting product launches next year could drive stronger demand, after a series of delays in highly anticipated features like an AI-enhanced Siri. At the company's developers conference in June, Senior Vice President of Software Engineering Craig Federighi said the AI Siri features "need more time to reach our high quality bar," and that more information would be released "in the coming year" following reports they may not be available until 2026. The iPhone maker had previously suggested they would become available earlier this spring, after teasing them at its developers conference last year, where it unveiled its Apple Intelligence. At the time, Apple's stock surged on excitement about Apple's AI story, but that early AI momentum has faded while investors wait for more signs of progress -- or an acquisition, after CEO Tim Cook recently told investors Apple would consider buying other companies to boost its AI capabilities. Bloomberg reported late Wednesday that Apple is currently working on developing a new AI-powered system called "World Knowledge Answers" for launch next year, with plans to integrate it into Siri as part of the delayed revamp, along with its Safari internet browser, among other things. Apple did not immediately respond to a request for comment. Apple shares have lost more than 5% this year so far, making it the only member of the Magnificent Seven in the red for 2025 besides Tesla (TSLA).

Peter Andersen Slams Apple's Siri And AI Strategy, Investor Warns iPhone 17 Updates No Substitute For Real Innovation: 'An Embarrassment' - Alphabet (NASDAQ:GOOG), Apple (NASDAQ:AAPL)

As Apple Inc. AAPL prepares to unveil its new iPhone 17 lineup at Tuesday's "Awe Dropping" event, investor Peter Andersen is criticizing the company's weak artificial intelligence strategy, calling Siri's performance "awful" and its lack of innovation "quite an embarrassment." Apple Faces Criticism Ahead Of iPhone 17 Event On CNBC's Power Lunch, Andersen, founder and chief investment officer of Andersen Capital Management, said Apple is focusing too heavily on hardware while ignoring its shortcomings in AI. Tuesday's update "seems to me kind of a head fake and ignoring the elephant in the room," Andersen said. "Siri's results have been awful, and Apple intelligence development has really been lacking. So it's quite an embarrassment, in terms of AI efforts, but they're trying to re-shift that focus onto their hardware development." Apple shares dipped about 0.76% during Monday's regular trading session and dipped another 0.0084% in after-hours, according to Benzinga Pro. Meanwhile, investors await details of the new iPhone lineup, which will debut at the company's Cupertino campus on Sept. 9 at 10 a.m. PT. See Also: Apple iPhone 17 Event: Ultra-Thin iPhone 17 Air, Apple Watch 11, AirPods Pro 3 And More Expected On 'Awe Dropping' Day Hardware Upgrades No Long-Term Fix Andersen said Apple's expected hardware reveals -- including the new ultra-thin iPhone 17 Air, camera upgrades and new color options -- may excite consumers in the short term but fail to address the company's long-term growth challenges. "They will attempt to focus the fact of new penetration and that the hardware offers new innovations," he said. "But in the long run, I do really think they have to focus on the software development." Andersen argued that without meaningful AI breakthroughs, Apple risks losing ground to rivals such as Microsoft Corp. MSFT, Alphabet Inc. GOOG GOOGL and Meta Platforms Inc. META, which have moved faster in integrating advanced AI tools. Siri's Struggles In Spotlight The investor also pointed to Siri as one of Apple's most significant shortcomings in AI, noting that the company's advancements in this area have largely been incremental. He said that critics can argue that, beyond minor upgrades -- such as increasing the number of camera lenses -- Apple has struggled to deliver meaningful innovation. He added that one workaround is simply downloading OpenAI's ChatGPT onto an iPhone, but that solution underscores Apple's lag in native AI development. "I don't think that that's a long-term solution," Andersen said. Analysts Split On Apple's Future Other analysts have also echoed concerns about Apple's AI strategy. Wedbush analyst Dan Ives repeatedly called it a "disaster," while Deepwater Asset Management's Gene Munster has argued that the bar for Apple's AI growth remains low but could rise sharply in the next two years as Siri integrates Google's Gemini model. Despite the criticism, Jefferies has raised its Apple price target to $205.82, citing tariff relief and long-term AI potential, while HSBC and MoffettNathanson kept Hold and Neutral ratings. However, Jefferies remains "unexcited" about the upcoming iPhone 17, even with positive U.S. consumer survey results, arguing that Apple stock appears "unattractive" at 30 times FY26 estimated earnings, given its projected 15% compound annual growth rate. Benzinga's Edge Stock Rankings show that AAPL continues to demonstrate a strong upward trajectory across short, medium and long-term horizons. Further performance insights are available here. Photo Courtesy: Paolo Bona on Shutterstock.com Check out more of Benzinga's Consumer Tech coverage by following this link. Read Next: Why Google's Demis Hassabis Disagrees With Co-Founder Sergey Brin On When AGI Will Arrive: 'I Have Quite A High Bar' Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. AAPLApple Inc$237.86-0.76%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum42.25Growth29.93Quality74.74Value5.31Price TrendShortMediumLongOverviewGOOGAlphabet Inc$234.60-0.24%GOOGLAlphabet Inc$234.40-0.26%METAMeta Platforms Inc$753.240.10%MSFTMicrosoft Corp$499.250.86%Market News and Data brought to you by Benzinga APIs