Apple's AI Crisis: Explained!

Summary

Highlights

• Apple, despite its stature, is facing a tech crisis due to delayed AI adoption. 🚨
• The second-mover strategy fails for Apple's AI advancements, unlike hardware. ⚡
• Unfulfilled promises in AI capabilities, such as Siri improvements, create doubt. ❓
• Ongoing delays in AI feature rollouts reveal possible internal challenges. 🕰️
• Historical parallels with failing tech giants put Apple's situation into perspective. 📚

Key Takeaways

• Apple's lag in AI technology despite being an industry leader shows vulnerability. 📉
• The traditional second-mover advantage doesn't apply to AI as it did for hardware. 🚀
• Major AI features promised by Apple, like improved Siri, remain unfulfilled. 📅
• The lack of demos for Apple Intelligence suggests delays in technology readiness. ⚠️
• Similar to Nokia and BlackBerry, any company can struggle with technological shifts. 🔄

Overview

Chapters

• 00:00 - 00:30: Introduction to Apple's Position in the Tech Industry The chapter discusses Apple's position as a giant in the tech industry, highlighting the company's significant market value at $3 trillion and its substantial cash reserves. It acknowledges Apple's success and dominance in several categories while noting its historical role in outcompeting other tech companies. The narrative touches on a looming challenge for Apple as of the year 2025, referencing its struggle with missed deadlines and the consequences of deleted commercials, hinting at potential vulnerabilities despite its towering status.
• 00:30 - 01:00: The Rise of AI and Apple's Late Response The chapter discusses the rapid emergence and impact of consumer artificial intelligence (AI) over the last few years. It highlights how AI has become a buzzword, frequently mentioned and discussed in various contexts. Despite its relatively recent popularity, the technology has quickly gained traction and generated significant interest and conversation, suggesting a dynamic shift in tech trends.
• 01:00 - 02:30: Second Mover Strategy and Its Limitations in AI 'Second Mover Strategy and Its Limitations in AI' discusses the rapid pace of technological advancement and its impact on companies. The chapter highlights how Skype, once a leader in online video calling, was quickly overshadowed by Zoom during the 2020 pandemic, illustrating the speed at which tech industries evolve. While companies like Apple are larger and more established, they are not immune to these fast-paced changes. All major tech companies are driven by the need to maximize profits for shareholders and investors, which can lead to vulnerability if they fail to stay ahead in technological innovation.
• 04:00 - 06:00: Apple's AI Solutions and Initial Rollout Challenges The chapter discusses the competitive pressure on Apple to enter the AI space, especially after ChatGPT gained immense popularity with 100 million users in just two months. It highlights that AI is now recognized as the next big frontier in consumer technology, pushing companies like Apple to demonstrate their capabilities in AI to remain relevant and at the forefront of technological innovation. This urgency is compounded by the industry's expectation for Apple to make a significant move in AI amidst growing interest and developments from other tech giants.
• 06:00 - 08:30: Delayed Features and Missing Siri Enhancements The chapter titled 'Delayed Features and Missing Siri Enhancements' discusses Apple's strategic approach of not always being the first to implement new technologies or features. Instead of rushing, Apple often observes the development and maturity of technology by other companies and then adopts it in its unique way. Examples include their later adoption of OLED displays and wireless earbuds. This strategy aligns with the perception of Apple as a 'second mover,' focusing on perfecting and refining innovations rather than being the first to market.
• 08:30 - 11:30: The Unseen Tech Demos and Apple's Marketing Disconnect This chapter discusses how Apple's success has often been attributed to its second mover strategy in hardware, particularly with devices like the iPhone and tablets. Despite not being first, Apple perfected execution in a way that set their products apart, leading to significant consumer demand. However, the chapter highlights that this approach may not be as effective with AI technology, where rapid iteration and implementation of on-device models are crucial for staying competitive. Unlike hardware, the AI sector demands a more aggressive and fast-paced strategy, challenging Apple's traditional methodology.
• 11:30 - 15:00: Historical Tech Company Failures and Apple's Future The chapter discusses the failure of historical tech companies as well as the future of Apple. It highlights how companies like Google, Samsung, and Microsoft are incorporating advanced features into their devices to improve user experience. For instance, Google offers features like Circle to Search and Gemini assistant, while Samsung has Galaxy AI with impressive object removal capabilities. Microsoft, on the other hand, introduces Copilot, an AI editor, into Microsoft Paint in Windows 11. These developments demonstrate how tech companies are constantly innovating to meet user needs and set the precedent for competition and future growth in the technology sector.
• 15:00 - 17:00: Conclusion and Future Speculations The chapter discusses the challenges and successes faced by companies in the AI industry. It acknowledges that not all ventures have gone smoothly, citing examples like the Recall feature from Windows, which received negative feedback. Despite these setbacks, major tech companies have integrated AI into their operations to stay relevant. The narrative highlights the rise and fall of startups trying to capitalize on the AI trend, suggesting that integrating AI is now a crucial step for tech companies to showcase their innovation.

Apple's AI Crisis: Explained! Transcription

• 00:00 - 00:30 - Giant company is late to massive technological shift, fails to adapt, falls behind and never recovers, dies. That is a tale as old as time and it does repeat itself. Now, Apple is the biggest tech company in the world. They're worth $3 trillion. They have more cash on hand than anyone can ever spend. They are extremely successful in many categories and they've taken down many other tech companies along the way. But now, the year is 2025 and between missed deadlines and deleted commercials,
• 00:30 - 01:00 it seems like even they are having some troubles with an emerging technology and is fascinating to watch. (gentle music) So artificial intelligence, you guys don't need me to say it. You already know. The explosion of consumer AI in the past couple years has been nuts. How many times have you heard those two letters next to each other? So suddenly, everyone for the past 2, 3, 4 years has been talking a lot more about AI, and two years doesn't even really sound like that long.
• 01:00 - 01:30 But tech moves fast. Remember Skype? Remember how Skype was like the default for online video calling? And then the pandemic happened in 2020. And then, like, two years later, everyone used Zoom. How did they blow that? Like, that's how fast tech moves. Now, Apple is a lot bigger than Skype was, but none of these companies are immune. Like, every one of these big public tech companies, all these companies are beholden to making as much money as possible. They have shareholders, they have investors. And if they don't think you're doing everything you can
• 01:30 - 02:00 to grow as much as possible, they're not gonna be happy. So when a certain ChatGPT comes along and gets a hundred million users in two months and seems to prove that AI is definitely the next frontier of consumer technology, well, then you start seeing a lot of tech companies suddenly talking a lot more about AI. (mellow music) So now you're Apple, and this is all happening, all eyes are on you. There's a lot of pressure to show some sort of AI something.
• 02:00 - 02:30 Now there is some conventional wisdom that would say, "Hey Apple, take a second, sit back, relax, do your typical second mover thing. You don't have to rush this." Because there are a lot of examples where Apple's not necessarily first to something. They sort of sit back and let someone else do the working on it, and the maturing of the technology happens, and then they jump in and implement it their own way. So they were not first to do OLEDs in their phones. They were not first to do wireless earbuds.
• 02:30 - 03:00 They were not first to make a tablet. The iPhone itself is a perfect example. There were so many other smartphones before the iPhone, but they just executed on it in a way that differentiated them so well that people wanted theirs. The thing is this second mover strategy is very much a hardware strategy, at least it typically has been. And this AI thing is different. It is very much just been these companies iterating as fast as possible and just moving and trying to implement as much as they can with these little on-device models
• 03:00 - 03:30 to give people whatever useful features they can come up with and just throw 'em out there. So on a Google device, that looks like Circle to Search and Gemini assistant and Gemini Live and the Add Me camera feature that lets you take two pictures and fuse them together to get everyone in the group shot, stuff like that. On a Samsung device, that's Galaxy AI. You know, they have things, like, that really impressive object removal. On a Windows 11 computer, that's gonna look like Copilot, you know, adding an AI editor into Microsoft Paint,
• 03:30 - 04:00 stuff like that. Now certainly, not all of this has gone super smoothly. There's been plenty of weird rocky launches with companies like the Recall feature from Windows, got some backlash and people didn't love, lots of stuff, has not been ideal. There have even been whole startups that were born and died just trying to jump on the AI bandwagon as best they can. But at this point, basically, every big tech company has something that they do that they can point at and be like, "All right, look. See, we do AI.
• 04:00 - 04:30 You can see we're being useful to our customers, so you investors can relax. We're on the forefront of it now." So then, what does Apple do? Well, same idea, right? At WWDC 2024, they announced Apple Intelligence, which again is, you know, just a branding umbrella term for all the AI stuff they're gonna do across iPhones and iPads and Macs, things that involve using generative models and large language models. On the surface, it's kind of along the same lines, a couple silly features here and there,
• 04:30 - 05:00 Genmoji, Image Playground to just generate random cartoonish images. But there have also been some useful things, like Writing Tools and ChatGPT integration. And then big promises of significant upgrades to make Siri actually good 'cause it's been lagging behind and bad for years. So on the surface, you know, feels right in line with a lot of these other companies are doing. A lot of it, kind of silly and easy to ignore, especially if you're not an investor, but some of it, potentially really cool. I know I for one would like Siri to be decent.
• 05:00 - 05:30 (upbeat music) So I remember being there at WWDC in the summer when they announced Apple Intelligence and thinking, "Oh okay, great. I would like to review this thing when it all finally comes out." So a couple months go by, September rolls around, the iPhone 16 launches, and it's built from the ground up for Apple Intelligence. And so it has iOS 18, but it doesn't have any Apple Intelligence features
• 05:30 - 06:00 at launch at all, like literally none of it. It's all still pending with software updates. Oh okay, but at least, you know, there's some betas coming up in the pipeline. So a few weeks later, iOS 18.1 comes out, and then it's got some of the features. It's got Writing Tools, notification summaries, so it's starting to have some stuff that I can test, but it is missing a lot of the bigger stuff. And also, notification summaries kind of turned out to be not that great all the time. A few more weeks go by, and then iOS 18.2 drops in beta
• 06:00 - 06:30 and they added Genmoji and Image Playground. It also added that ability to kick out more complex queries to ChatGPT. So I mean, okay, it's progress and I'm glad it works and people can generate cartoon images on their phone, but, like, is that really the core of Apple Intelligence? Have we really seen that yet? I'm still thinking, no, I'm gonna keep waiting. I'm not reviewing Apple Intelligence yet. So a few more weeks later, we get iOS 18.3.
• 06:30 - 07:00 At this point, we're months away from the original iPhone launching built for Apple Intelligence, but this time, they flipped the switch on visual intelligence, which I think is the first genuinely really useful, interesting thing using the camera feed to answer questions about your environment or add an event to your calendar from a poster, things like that, but it also did disable notification summaries for news and entertainment apps because of all the mistakes it was making. But there is still no improved Siri.
• 07:00 - 07:30 This new Siri was supposed to have all this great stuff like onscreen awareness and being more conversational and having more in-app controls, but none of that is launched, and at this point, I just don't know when it's coming. So I eventually just did a review of all of the Apple Intelligence features that are out so far 'cause I don't know when the rest are coming, and I thought that would be helpful, but at the same time, it's frustrating because they promised so much, and yet. (gentle music)
• 07:30 - 08:00 So this is where it gets kind of weird. Not to get too existential, but this job that I do, that we do, these tech YouTubers and tech journalists, things like that, you can kind of boil it all down to just going around and just doing endless tech demos. Like, we just go from tech demo to tech demo, and it's other people's jobs professionally to give us cool tech demos, and then we can point a camera at it or write an article. And then our job is to, one, decide if the thing
• 08:00 - 08:30 that they're demoing is a good idea or not. But then, two, to try to understand how real that tech demo actually was. That's really what it is. It's just cool tech demos left and right. So, like, a new product might come out and get announced and they show it to us and they're like, "Check this out." And part one again is, okay, are these new features in this thing actually a good idea? Would people want that? And then part two is to try to listen to the words coming out of their mouth and look at what's happening
• 08:30 - 09:00 and understand, is this tech demo real or staged or completely fake or somewhere in between? So then Apple, you know, I would say is typically, they do a pretty good job, like in the spectrum of how crazy things can get, like they're pretty realistic about things, like the new iPhone comes out on stage and then they shepherd everyone to this hands-on area. And then we get to point a camera at and demo our own hands a lot of the new features that they just announced. So in general, pretty good, but it's not always perfect.
• 09:00 - 09:30 Fun fact, I don't know how many of you remember AirPower, but that was one of those things where I remember that event. They showed it off on stage, whatever, and then we go out to the hands-on area, and there was this single AirPower out there, just one wireless charging pad among all the chaos, but it didn't work. So you could put your phone on it and pretend it charges, but it didn't. And maybe that should have been a red flag right there, because, of course, as we know, AirPower never came out. I think Tesla's robots are another pretty recent, like, famous one. We all remember that show that they put on.
• 09:30 - 10:00 They had those humanoid robots walking around their event, interacting with people. Tesla would never confirm or tell people exactly what was going on behind the scenes to make that all possible, but there were plenty of theories about them being remote-operated or human-controlled. Anyway, Apple Intelligence is one of those things where they have had this slow continuous rollout where the most interesting and possibly most important things are at the end of the rollout, but there's no timetable. They're just kind of coming at some point.
• 10:00 - 10:30 And Apple's never demoed them for us. It's really interesting. John Gruber pointed this out in his piece a little while ago that this could be an even more glowing bright red flag. Apple has never shown these features working to anyone. And, I mean, you'd think if they could demo it to a reporter or YouTuber or something that they totally would, they'd love to show it's almost done, just, "Here's how cool it is," but they haven't. And the fact that they haven't even gotten to the cool tech demo part yet
• 10:30 - 11:00 kind of makes it feel like this is a lot farther away than we think it is. Now, all of this is true at the same time that Apple is literally running commercials and billboards and plastering Apple Intelligence all over their website and every announcement, they talk about it all the time to the point that you'd assume it's like the most important new feature of their devices. They even had to delete a commercial that they made and published. They had to take it back because it was literally just advertising a new feature of this big Siri update that doesn't exist yet.
• 11:00 - 11:30 It's like looking into your phone and using context to tell you something. That straight up didn't work. - Siri, what's the name of the guy I had a meeting with a couple of months ago at Cafe Grenel? - [Siri] You met Zac Wingate at Cafe Grenel. - Hey. - Zac. - Oh, I didn't think that you'd remember me. - Yeah, of course. Since I saw you, I'm like, it's Zac. Nobody walks like Zac. (Zac laughs) ♪ I am genius ♪ - You know, I think it would be cool if Siri actually could look into your phone,
• 11:30 - 12:00 into your apps and calendar and actually tell you things about it, but it can't. And we've never seen a demo of this outside of this commercial or Apple's official videos. So yeah, this disconnect between how successful Apple would like us to believe that they are with AI and how poorly and delayed things are actually going, that is the crisis on Apple's hands right now. It's fascinating to watch. And, you know, it's totally fine to delay products,
• 12:00 - 12:30 like, that happens all the time, it's actually very normal. But just with AI, with how immediate it feels, with it being this paradigm shift of technology and all of their competitors shipping things, it feels like things are moving very quickly. So that's how you end up with apparently internal meetings and reorganization and people inside of Apple calling it embarrassing. To people paying close attention to Apple, I think Apple Intelligence has, from the beginning, kind of always felt more like a nice thing to please investors
• 12:30 - 13:00 more than an actually useful revolutionary set of products that regular people are gonna love. But now that it's so delayed and the disconnect is so obvious, it's never been more apparent. (upbeat music) Remember Nokia? They were huge, and then they kind of just completely missed the jump to smartphones, and now, we don't think about Nokia anymore. I'm sure you remember BlackBerry. they were also once thought of as way too big to fail,
• 13:00 - 13:30 and then virtual keyboards came along and BlackBerry just continued making phones with physical keyboards, and then everybody just moved along, and now, we don't talk about BlackBerry anymore. There's countless examples of huge tech companies. We thought they were way too big to fail, but then they failed to adapt in some way to the changing tides of technology, something happens, and then they're just gone and we don't know what happened to 'em. And so there's no way to tell the future on this one.
• 13:30 - 14:00 Maybe everything's fine. Maybe Apple ships the new Siri in two months and it does everything they said and it's great and we just forget any delay ever even happened. But there's three things that have been on my mind that kind of make that feel unlikely. So number one is just that AI is just not at the core of Apple's business right now. And if you're just looking at it from a business perspective, they make a ton of money selling hardware, selling the services and the things attached to that hardware, and they will continue to make tons of money iterating and doing all that like they usually do.
• 14:00 - 14:30 Financially, they'll probably be fine. Like, it's kinda hard to draw a straight line from Apple Intelligence is successful to Apple making way more money, especially when they're such a privacy-focused company as well, like a lot of these features don't go hand in hand with that. But then, two, their usual advantages don't really work here as much as they usually do. So like, the second mover advantage thing that I talked about earlier, like that's typically a hardware technologies thing.
• 14:30 - 15:00 And so AI being software, with software, Apple's usually able to just rely on their massive, enthusiastic army of developers to support things and give it a kickstart and get it off the ground to get people using it. And with this, it's kind of the opposite. I don't think they're interested in this. Like, just think if I'm Uber, if I'm developer for Uber and this new Siri is supposed to be able to reach into my app and perform an action, like calling a car, so the user just goes,
• 15:00 - 15:30 "Hey Siri, call me an Uber to the airport," and then it does it without ever opening my app? I don't actually like that very much. That gives me less control. I don't get to do as much with that experience, even though it would be really cool for the end user. But then number three, just the lack of demos is like really, it's actually very hard to ignore just from someone who's seen so many. Remember the Bixby speaker? Like all those years ago at a Samsung event, they announced, the Galaxy Speaker is what it was called.
• 15:30 - 16:00 It looked like this little mini barbecue grill. And in person, we all go to this event, and then we go down to the hands-on area and they had a bunch of them on display and they were lit up and nobody could actually touch them or use them. And then I think we maybe saw them one more time at a display at CES, but then we just never saw them again. Samsung canceled it. They never shipped the thing. I don't think Apple wants to pull a Bixby speaker or an AirPower with this thing. Like, Apple Intelligence has gotten so much PR
• 16:00 - 16:30 and it's clearly so important to them that it just feels like it's gotta get there eventually. It's gotta be frustrating for them to not have the ability to show it off or ship anything yet, but it would be pretty cool if Siri was good. But we'll very much just still have to wait and see. There's still Apple. They're still just gonna keep shipping new computers, tablets, software, phones, the whole thing, and they will continue to iterate on other stuff, but this is just something to be keeping our eye on for the future, especially as this whole AI thing
• 16:30 - 17:00 continues to ramp up and as they continue to put billboards out there. Share this video with someone who needs the explanation. Thanks for watching. Catch you guys to the next one. Peace. (gentle music)