Apple needs to step up their efforts to capture users' attention.
Apple's shares have taken a dip, with a loss of almost 17% in the year to date. This negative run for the tech giant extended to Friday morning, causing concern among investors.
Despite reporting a 10% increase in revenue for its third quarter, reaching $94 billion, and strong sales of its smartphones, particularly in China, Apple's performance has left investors unimpressed. The company's CEO, Tim Cook, is facing pressure due to these results.
One of the main areas of concern is Apple's apparent lag in the field of artificial intelligence (AI). Google parent company Alphabet is largely flat, while Microsoft has gained 25% since the start of 2025. Samsung and Google are noted as being more proactive in the development of AI technology.
Lingering concerns exist over the impact of Donald Trump's trade war on Apple's future prospects. Some analysts view the bump in device sales as a reaction to potential tariffs.
To improve its AI capabilities, Apple could significantly increase investments in AI, including expanding its data center infrastructure and potentially acquiring larger AI companies to accelerate its roadmap. The company is already reallocating personnel to focus on AI, embedding AI more deeply across its devices, platforms, and services, and has made about seven smaller AI-related acquisitions this year.
Apple could also enhance its AI by evolving beyond its current privacy-focused, on-device intelligence model to better compete with rivals that emphasize scalable, cloud-native AI solutions. While Apple’s hybrid approach, combining 3-billion-parameter on-device models with encrypted cloud processing, protects user privacy and enables seamless features like live translation and contextual awareness, it risks underperforming in enterprise and creative sectors where cloud AI excels.
Strategies for Apple include expanding cloud infrastructure and possibly building owned data centers to reduce reliance on third parties, pursuing more substantial acquisitions to fill gaps in technology and talent and accelerate AI innovation, balancing its privacy-centric on-device AI with scalable cloud AI capabilities, and continuing to integrate AI deeply into its tightly controlled ecosystem to leverage vertical integration as a competitive advantage.
These moves would position Apple to better contend with AI leaders like Google and Microsoft while retaining its focus on privacy and user trust that differentiates its AI products. However, Tim Cook's potential deal with AI companies is not enough to keep investors happy, as the company appears to be falling behind its rivals in the AI race.
References:
- TechCrunch
- Bloomberg
- The Information
- Recode
The company is struggling to keep pace with its competitors in the field of artificial intelligence (AI), such as Google, Microsoft, Samsung, and others, as these rivals are being more proactive in AI technology development.To improve its AI capabilities and compete with AI leaders, Apple could significantly increase investments in AI, expand its data center infrastructure, and potentially acquire larger AI companies.
