Apple's AI Debut: Mixed Reactions as Stock Dips Despite New Features

Apple CEO Declares New Chapter in AI Play, Stock Dips 1.8% - Decrypt

On Thursday, Apple CEO Tim Cook heralded a new dawn at the Cupertino, California-based firm following this week's launch of its suite of generative AI tools embedded in its flagship products. "This is just the beginning of what we believe generative AI can do, and I couldn't be more excited for what's to come," Cook said during the call. Investors, however, were not convinced. Apple stock fell 1.8% to $225.91 by the closing bell. The stock has since slumped a further 1.8% to $221.90 in after-hours trading, data from Google Finance shows. That came as results showed modest increases in company sales for the year. Apple reported $94.9 billion in sales for the quarter, up 6% year-over-year, including $46.2 billion in iPhone sales. Company profits dropped 35.9% from the same time last year to $14.7 billion, mainly due to a $14 billion headwind in income back taxes in Ireland following a court ruling in September. Included in Monday's iOS 18.1 update, Apple Intelligence allows users to summarize and rewrite text, search their photo library using descriptions of photos, and transcribe and summarize phone calls in real-time, among other features. Early reviews were lukewarm, with Wired calling the experience "flat" and the New York Times concluding that "the highly touted AI-transformed future still seems a long way off." Axios said the product offered "only modest improvements." On Thursday's call, Cook noted additional features will be introduced in December, including ChatGPT integration and Visual Intelligence, which allows users to search for information directly from their camera app. It will also be given non-US English capabilities in December and foreign language capabilities in April. Cook did not answer directly when asked whether Apple Intelligence had boosted iPhone sales since its launch earlier this week. However, he noted that iOS 18.1 was adopted twice as fast as iOS 17.1 during the same quarter last year. "We're getting a lot of positive feedback from developers and customers," he said. Several tech giants, including Google and Microsoft, have announced plans to incorporate AI models into their products this year as competition in the sector heats up. Both companies reported better-than-expected results earlier this week.

Report: Investors Remain Uncertain About Apple AI Features' Impact on Sales | PYMNTS.com

Apple shares dipped early Friday (Nov. 1) as investors remained uncertain about the prospects for the company's rollout of artificial intelligence features. Apple gave guidance Thursday (Oct. 31) for low- to mid-single-digit revenue growth in the current quarter, which was an outlook that fell short of the high end of analysts' expectations of 7%, the Financial Times (FT) reported Friday. The company's revenue for the most recent quarter was up 6% year over year, which was slightly above analysts' forecasts, according to the report. Apple's latest earnings report was closely watched by analysts looking for signs of whether the rollout of the company's AI features, which it has dubbed Apple Intelligence, might help drive sales of Apple devices like iPhones, the report said. The company began launching these features Monday (Oct. 28) with software updates for iPhone, iPad and Mac, per the report. Apple Chief Financial Officer Luca Maestri told the FT that sales of the company's latest iPhone outpaced those of its predecessor during its first eight days on the market; that customers were downloading the latest operating system at twice the rate they did for the previous one; and that more AI features are to be added by the end of the year. During its Thursday earnings call, Apple outlined an AI strategy that includes December plans for ChatGPT integration and expanded language support for Apple Intelligence, PYMNTS reported Thursday. Monday's release of Apple Intelligence included features like AI-powered writing tools and photo features. Apple CEO Tim Cook said additional capabilities coming in December will include "more powerful writing tools, a new Visual Intelligence experience" and ChatGPT integration. The December rollout represents the company's latest attempt to compete in AI, where competitors like Microsoft, Google and OpenAI have already established a presence. Analysts told PYMNTS Monday that Apple's launch of its AI features could challenge the notion that the tech giant has fallen behind in the AI race. Apple previewed the introduction of Apple Intelligence in June, making a grand entrance at a time when some observers said the company had arrived late to the AI party.