Apple (AAPL) shares experienced a notable decline following its Worldwide Developers Conference (WWDC), closing at $290.55, down $11.01 from the previous session. The selloff reflects investor disappointment over the company's artificial intelligence (AI) strategy, particularly the delayed rollout of the new Siri AI assistant, which will initially launch only in English as a beta version later this year.
The stock's slide extended into Wednesday, with traders noting that WWDC failed to deliver the immediate catalyst needed to drive iPhone sales. The decline followed a 1.9% drop on Monday to $301.54, as the market digested Apple's AI-focused software announcements. Despite Apple touting Siri AI as its "most ambitious" assistant update, investors are questioning whether the technology can translate into near-term revenue growth.
Device Compatibility Concerns
A key hurdle is the limited device support for Apple Intelligence and Siri AI. The new features will be available only on iPhone 16 models and later, as well as the iPhone 15 Pro series. Morgan Stanley analysts estimate that over 850 million iPhones cannot run even basic Apple Intelligence features, while more than 1.3 billion users are locked out of the advanced Siri capabilities. This creates a double-edged sword: while a large incompatible base could drive upgrades if Siri AI proves compelling, the investment bank warns that betting on software to sell hardware remains a challenging proposition.
Regional and Regulatory Challenges
Apple faces additional headwinds in key markets. The company stated that Siri AI will not launch initially in the European Union due to the Digital Markets Act (DMA), which aims to curb the power of large platforms. In China, Apple is holding back its AI tools while it addresses local regulatory requirements. The European Commission pushed back, with spokesman Thomas Regnier asserting that "nothing in the DMA prohibits Apple" from launching new products in the region. These delays are significant because Europe and China are major markets for Apple, and the absence of AI features there weakens the global upgrade narrative.
Investor Skepticism
The phased rollout—public beta next month, free updates in the fall, and Siri AI beta later this year—failed to generate the immediate demand boost some had hoped for. Apple is increasingly relying on external AI infrastructure, including Google's Gemini technology and cloud setups using Nvidia chips, placing it alongside competitors like Google, OpenAI, and Anthropic. Analyst Craig Moffett of MoffettNathanson described the updates as not "earth-shaking" but noted they could transform Siri into a genuine chatbot and potentially an agent capable of executing tasks across different apps.
Financial Performance and Outlook
Despite the stock's decline, Apple's core business remains robust. For the fiscal second quarter ended March 28, the company reported $111.2 billion in sales, a 17% year-over-year increase, with diluted earnings per share of $2.01, up 22%. Services revenue reached a new record, and the board authorized an additional $100 billion in share buybacks. However, investors are now focused on execution rather than hype. If Siri AI rolls out slowly, faces language or regional limitations, or fails to convince older iPhone users to upgrade, Apple's premium valuation could come under pressure. The company also faces the challenge of balancing enhanced personal features with user privacy and regulatory scrutiny.
Market participants will closely watch the July public beta, the fall software release, and the eventual Siri AI beta to see if these updates provide enough everyday value to spur an upgrade cycle before attention shifts to Apple's next hardware devices.
