Apple Inc. shares edged up 0.52% in premarket trading to $293.10 on Thursday, recovering slightly from a sharp decline following the Worldwide Developers Conference earlier this week. Investors are now focused on whether the new Siri AI features can ignite a meaningful iPhone upgrade cycle, or if hardware and regional restrictions will limit their impact.
The stock closed Wednesday at $291.58, up 0.35%, after falling 3.64% on Tuesday to $290.55 from Monday's close of $301.54. Despite the modest bounce, AAPL remains well below Monday's intraday high of $317.40, as market participants digested the details of Apple's AI strategy.
Siri AI, Apple's revamped voice assistant powered by artificial intelligence, is designed to read on-screen content, access personal information from messages, mail, and photos, answer web queries, and perform tasks within apps. Developer testing is underway, with a beta release planned for English-language users on compatible devices later this year. Apple's software chief, Craig Federighi, has described it as a "dramatically more capable and conversational assistant" that will help users "get things done throughout the day."
However, the market response was muted. Analysts described the announcement as measured rather than game-changing. Bob O'Donnell of TECHnalysis Research told Reuters that the latest Siri "finally delivers" on Apple's promise for the voice assistant, while Craig Moffett of MoffettNathanson suggested the changes could turn Siri into a "credible chatbot" and potentially a meaningful agent that performs tasks for users.
The biggest challenge is reach. Morgan Stanley estimates that over 850 million iPhones cannot handle even basic Apple Intelligence queries, and more than 1.3 billion are excluded from advanced Siri features due to chip architecture requirements and the need for 12 GB of unified memory. While limited compatibility could encourage upgrades among older iPhone users, it may also dampen the impact on usage, services revenue, and customer retention. Morgan Stanley noted that selling hardware based on software features remains a tough proposition, even with AI now influencing some purchasing decisions.
Competition is intensifying. Apple's Siri AI demo coincided with OpenAI's quiet filing for a potential large IPO, while Google's Gemini, Anthropic's Claude, and OpenAI's ChatGPT continue to set the pace. Apple is not just aiming to demonstrate AI capabilities but also to defend the iPhone's role as the primary platform for daily AI interactions.
Regulatory hurdles also loom. Apple announced that Siri AI will not launch initially in the European Union on iOS, iPadOS, or watchOS, citing the Digital Markets Act. Additionally, the features are not coming to China yet due to local regulations. EU officials pushed back, with European Commission spokesperson Thomas Regnier stating, "The decision not to roll out Siri AI in the EU is Apple's and Apple's only." Europe accounted for approximately 27% of Apple's sales last fiscal year, and DMA violations can result in fines of up to 10% of global annual turnover.
Despite these challenges, Apple's financial strength provides a buffer. The company reported March-quarter revenue of $111.2 billion, up 17% year-over-year, and diluted EPS of $2.01, a 22% increase. Apple also authorized up to $100 billion in share buybacks. However, these strong fundamentals set high expectations for the success of Siri AI. If the upcoming beta fails to demonstrate that Siri can handle everyday tasks effectively on supported devices, investors may conclude that the post-WWDC bounce was temporary.
