AsianFin -- Apple Inc. shares tumble 4.85% on Monday, leading the tech rout that day, in which the Nasdaq Composite Index finished 4% lower in its worst day in more than two years. Apple shares logged their biggest daily losses since September 29, 2022 as more signs showed the iPhone maker became a laggard in a race of artificial intelligence (AI) tech deployment.
Credit：Apple
The selloff shaved $174 billion off Apple’s market capitalization on Monday, highlighting investors’ growing concerns over AI tech application amid uncertainty of U.S. tariff war. Citigroup analyst Atif Malik on Monday removed his firm’s 90-day positive catalyst watch on Apple stock and downgraded his iPhone sales expectation this year,citing a delay in the launch of anticipated Siri digital assistant.
Malik now expects Apple would sell 232 million iPhones for the calendar year 2025. That represents a 2% increase from a year ago, while the analyst previously anticipated a growth of 5%. however, the analyst maintained his buy rating on Apple stock with a price target of $275, implying a 15% upward room from the close last Friday.
"While Apple Intelligence utility is different for different people, an upgraded Siri would have driven a higher iPhone refresh this year, in our view," Malik said in a note. "The expectation had been that the big upgrade of Siri with on-screen awareness, personal context, and deep app integration will be released sometime this April/May."
Without the AI boost, Apple could struggle to drive iPhone upgrades, especially since iPhones remain Apple's biggest revenue driver, Malik warned.
Citi’s cut in iPhone sales projection came on heels of a Bloomberg report last week that stated Apple has, at least so far, flopped in AI. It quoted Apple AI division insiders that a true modernized, conversational version of Siri won’t be available for consumers until iOS 20 comes out in 2027 at best.
It was reported last month Apple still worked on some big AI-powered upgrade to Siri, but in stead of rollout with iOS18.4, they may be limited or delayed until iOS18.5. The report last week said Apple is likely to release new version of Siri in May, but its current iOS version of Siri doesn’t work as smoothly as it could.
According to the report, the modernized Siri, internally known as “LLM (large language model) Siri”, would merge the two brains into a new architecture that can handle both simple and legacy Siri commands like setting timers, and the advanced AI-powered queries, like carrying out tasks across apps using context like personal details and what’s on your screen. Apple plans to merge these two systems and release a new Siri architecture under iOS19, but it’s now running behind and won’t be unveiled at the Worldwide Developers Conference (WWDC) in June.
The report also claimed a suite of AI features, or Apple Intelligence, that has been rolling out in stages since last October are just nice-to-have options at best, and some of them basically useless.
Apple introduced Apple Intelligence at the WWDC in last June, and its advanced personal AI system is now available in U.S. and six other countries for English version. Apple said in January it will release a simplified Chinese version in April. But it’s still unclear when Apple Intelligence can be available for users in China for Apple has to obtain regulatory approval for launch of the AI software.
The Cupertino-based company is facing more uncertainties amid increasing China-U.S. tensions at a tough time, in which its sales in China unexpectedly shed 11% during the holiday season. That was the steepest decline since the quarter ended December 2023. The underdeliver was driven by a decline in iPhone sales, highlighting stiff competition in the world’s largest smartphone market and absence of the company’s much-touted Apple Intelligence platform.
Apple recently started working with Alibaba to offer AI features on its devices such as the iPhone in China, The Information reported last month. The report suggested the partnership made significant progress as two companies have submitted the AI features they co-developed for regulatory approval. Alibaba Group Chairman Joseph Chung-Hsin Tsai later that month confirmed his company is joining hands with Apple to offer AI features on iPhone in China. “Apple has been very selective, and talked to a number of companies in China. And in the end, they choose to do business with us. They want to use our AI to power their phones,” Tsai said.
