Apple’s Allure of the Shiny New Thing

Apple’s WWDC: Glitzy Facelift, but Where’s the AI Revolution?

This year’s Worldwide Developers Conference (WWDC) left many scratching their heads, as Apple unveiled a revamped design language, dubbed “Liquid Glass,” while largely sidestepping the burgeoning field of artificial intelligence. While the enhanced visual aesthetic caught the eye, the lack of groundbreaking AI integration felt like a missed opportunity in a rapidly evolving tech landscape.

The new visual overhaul, introducing richer transparency and fluid effects across all platforms – from computers to phones and watches – marks the most significant UI design shift since Apple embraced the flat design aesthetic in 2013. The new design language evokes a sense of nostalgia, reminiscent of Microsoft’s Aero Glass interface from Windows Vista, sparking debate across social media platforms, as another fashion trend seems to be re-emerging.

The conference also introduced platform unification, simplifying versioning across iOS 26, iPadOS 26, macOS 26, and more, streamlining the experience for both developers and users. MacOS, however, maintained its tradition of using California place names, this year opting for Lake Tahoe.

The biggest upgrade came with iPadOS. The iPad finally received the multi-window and split-screen capabilities, long-awaited by users who had been asking for better desktop style multitasking capabilities.

Minor additions included features such as real-time translation for voice and video calls, improvements to the phone and messaging apps, wrist gestures for Apple Watch, and the ability to use the headphone button to control the camera shutter, adding a sense of modernity to its existing array of features.

The AI Elephant in the Room

The reality proved to be a stark contrast.

In an era where AI is transforming the tech landscape, the conference mirrored previous years, with a focus on UI tweaks and incremental feature additions.

Contrast this with Microsoft and Google, who have shifted the focus of their developer conferences to AI advancements, rendering their core operating systems almost secondary.

Apple, on the other hand, remains a designer-driven consumer electronics company. While Jonathan Ive has moved to OpenAI, creating innovative products, the company’s identity is rooted in elegant interfaces and streamlined hardware and that hasn’t changed.

Unfortunately, Apple still doesn’t have cloud-based AI. Without its own AI products to announce, the WWDC was confined to software updates. Apple depends on external partners for its AI strategy, having partnered with OpenAI last year, with speculation of similar collaboration agreements with other major AI service providers, like Google’s Gemini, and other Chinese services.

Apple’s consumer base, and their unique brand recognition are key contributors to their success. Apple’s consumers and the upgrades of the interface, function, and the improvements of the features for their devices, like iPhone, Mac, and iPad, are still highly anticipated. And for marketing purposes, Apple needs its WWDC events to prepare for the vital release of the iPhone in September.

Furthermore, Apple did emphasize AI several times, and they also debuted the AI platform for the developers, however, this event was much less of an announcement compared to others. According to some media outlets, at last year’s WWDC, Apple mentioned AI around 60 times, in contrast to this year, roughly 30, with only one mention of Siri. In comparison, Google I/O mentioned AI almost constantly.

This may be because of concerns about the same issues as last year. Apple Intelligence has launched this past year, but the subsequent release has been pushed back. Apple’s digital assistant Siri was supposed to be given a major upgrade with AI capabilities. It would seem Apple is still hesitant with this function, and is taking time to properly implement and improve it for consumers.

It’s worth noting that Apple has withdrawn some of the Apple Intelligence’s advertising campaigns because of the actual AI features that have not yet been released, with consumer advocacy groups criticizing the content for misleading consumers. Apple has modified the webpage and withdrew their TV advertisements, adding an explanation on its official website: “This feature is still in development and will be available in future software updates”.

The withdrawal and modifications of their advertisements is what highlights the gap that exists between Apple’s AI marketing and actual deliveries. And because the philosophy is “privacy first, and reliable iteration”, there is a struggle between the need to maintain the top level of product quality and managing consumer expectations, and prevent similar future marketing-based errors.

This is why Apple did not mention any updates to the advances with AI powered Siri and Apple’s software chief engineer, Craig Federighi was vague, and said the company will share additional details regarding Siri “over the next year”, this would mean the AI-driven Siri will be ready by 2026.

Analysts’ Expectations: Measured, at Best

Analysts offered a tepid reaction to the announcements.

Francisco Jerónimo, Vice President of Data and Analytics at IDC notes, “The event was not about disruptive innovation, but rather about careful calibration, platform optimization and developer empowerment – Apple is laying the groundwork for the future, rather than introducing game-changing technology.”

Michael Levin, an analyst at CIRP, noted that most Apple consumers purchase new iPhones because their old phones don’t function as well. As the announcement of software innovation will not have much effect.

UBS analyst David Vogt mentioned in his report that the WWDC’s announcements leaned more towards evolution, not revolution. Some investors were hoping an announcement of new iPhone design or a “killer” Apple Intelligence application but the new content reflects the more conservative expectations.

Samik Chatterjee, a JPMorgan analyst, was disappointed. He stated that Apple’s WWDC did not deliver any major surprises, failing to push the analysts to substantially modify their expectations for the iPhone (or other devices). The company’s incremental platform updates for devices and opened the basic AI model access to the developers – this can bring interesting use case/applications to the consumers but has a limited influence for the short term.

The disappointing revenue that the company is now facing increases the pressure. Apple’s stocks have dropped by 17% this year. Apple aims to attract its consumers with the new products to boost their stock value for the highly valued AI field. As a result of the company announcements, however, Apple’s stock remained the same the past two days.

The drop in the stock value has been influenced by a variety of factors. Apple is stuck in the trade dispute with China as their manufacturing is based in China. They need to make the choice of raising their prices to secure their profits or keep sales, this happening in the largest U.S. market. The company faces a threat of tariffs from the U.S. president.

Apple faces a threat to two main revenue streams. In Google’s antitrust case, their payments to Apple became a point of dispute. Google pays almost $20 billion annually to Apple to have Safari be the default search engine by Google. This lawsuit is still in the appeals, it may be forced to give up the operation and Apple would then lose a large revenue stream.

Apple’s own app tax store faces challenges. In the U.S., the judge commanded that Apple allow the users to choose alternative options for paid channels. In the EU market, Apple has been forced to break down its barriers and offer sideloaded apps to the consumers and bypass the app store to download and install the app.

Apple’s Strategy: Stock Buybacks over Innovation?

Apple has made little progress during the past decade. The smart car business that they heavily invested in for over a decade, resulted to a loss of over $100 billion, and they abandoned this project. The mixed reality product Vision Pro is struggling because of a higher price tag, and the user experience is not up to par.

Tim Cook is increasing their focus on the expansion of their services business, securing the attachment rate of Apple’s hardware and software, and developing new revenue streams to reduce the company’s dependence on the iPhone business. The company has been very successful with this goal. The services business has taken over over a quarter of Apple’s revenue (27.9%), and the iPhone business dropped to 50% (49.1%).

Apple’s difference has become more noticeable in the age of AI when compared to Google, Microsoft, and Meta. Apple sees that AI is a complex task that they may not want to pursue. Their voice assistant Siri has gotten off to a late start, even though they started early in the process. Siri fails in front of the generative AI, and it is not even in alignment with AI.

As other tech giants are highly investing in AI models, Apple is choosing to remain with their initial product business and is not investing in the AI arms race. Apple has issues with AI. As a result, Apple is collaborating with OpenAI and its AI, Apple Intelligence. The company is unable to deliver the proper consumer experience, and has not been rolled out in the Chinese market for over a year because of restrictions.

As with the search business, Apple had already determined they would abandon their AI models and choose third-party AI services instead. At the WWDC, Apple has updated On-Device AI models for third-party developers and supports more AI applications with API updates. Although Apple is open for partnerships, many observers are concerned that this will not be enough.

Several analysts and investors suggest that Apple needs to acquire an AI startup, such as a LLM maker or the search provider Perplexity. However, unless Tim Cook makes a change in the strategy, Apple will most likely fail to use acquisitions and cut down on the AI operations. Moreover, Apple has fallen behind in AI and even if they did acquire an AI company, it will need to build the datacenter and acquire the higher-end Nvidia chips.

Apple, as the most wealthy company in the tech market, has spent most of their funds on stock buybacks and has boosted Apple’s stock. Apple spent approximately $700 billion on stock buybacks in the past decade. Google and Microsoft had $316 billion and $211 billion invested respectively.

Apple seems to not have much capital in expenditures. Apple’s capital in expenditures has only been $10 billion, while Meta and Google are around $50 billion, and Microsoft and Amazon are at $80 billion for the AI arms race.

Apple’s competitors are battling for resources and talent in the AI field. Microsoft is invested in OpenAI and has invested $13 billion. Meta is creating a research lab for “super-intelligence”. Zuckerberg plans to invest $15 billion into the data annotations company, Scale AI. Apple’s biggest acquisition was the Bluetooth headphone company, Beats for $3 billion in 2014.

Eddy Cue, Apple’s senior vice president stated last year that Apple does not offer their own search engine. The development of a search engine would shift Apple’s focus, and it will cost billions of dollars to set up, taking a long time to complete.

In addition, due to the continuous growth of AI, search is expanding. This makes a high investment in creating Apple’s search engine a huge risk. Also, the search engine will need a platform for the sales of its directed advertisements, and this is not Apple’s core business, and is also out of Apple’s expertise, breaking Apple’s policy with its promise of privacy.

But Apple has not been stopped from making money from Google. In the future of AI, Apple stands by its existing hardware and software and sticks to its in-device AI strategy while ignoring cloud-based AI. This raises the question of whether this is clinging to its original intentions or if it is missing out on future opportunities, which will be determined with time.