Apple lost the AI race — now the real challenge starts

For an AI loser, Apple did an atrocious batch of winning past year.

The messiness that was the Apple Intelligence rollout was embarrassing, to beryllium sure, but done it all, the institution kept doing what it does best: trading iPhones. With this week’s news that it’ll usage Gemini models to powerfulness the long-awaited smarter Siri, Apple seems to person taken a large ‘ol L successful the full AI race. But there’s still a awesome situation up — and Apple isn’t retired of the moving conscionable yet.

Apple Intelligence sewage disconnected to a well-documented unsmooth commencement successful 2024. The iPhone 16 was “Built for Apple Intelligence,” but shipped without it. Features arrived complete the adjacent fewer months, but the alleged smarter Siri never materialized. Apple execs admitted they had gone backmost to the drafting board, group successful complaint were shuffled around, and it each looked for illustration a large nonaccomplishment connected Apple’s part.

But it doesn’t precisely look for illustration group are fresh to ditch their iPhones for Google’s Gemini-imbued Android phones. According to IDC’s Q3 2025 report, “Demand for Apple’s caller iPhone 17 lineup was robust, pinch pre-orders surpassing those of the erstwhile generation.” Counterpoint Research calls Apple the world smartphone “market leader” successful 2025 pinch 10 percent year-over-year maturation successful marketplace share. Meanwhile, Apple Intelligence is overmuch little salient successful the iPhone 17’s trading than it was pinch the 16; you person to scroll halfway down the iPhone 17’s merchandise page earlier you get to the first mention.

The stalling maneuver worked, but these days investors break retired successful hives if you don’t mention AI each 5 minutes. Apple had to travel up pinch something successful the measurement of a strategy, and successful the 2nd half of 2025, we started proceeding reports that it might beryllium looking astatine extracurricular partners, alternatively than building its ain models from scratch. It wouldn’t beryllium wholly unprecedented; Apple already lets users entree ChatGPT straight successful iOS and has promised from the beginning that it would adhd much third-party LLMs successful this fashion. But this week’s woody isn’t astir adding a speedy measurement to chat pinch Gemini connected an iPhone. You tin already do that successful the Gemini app. This is astir building smarter Siri connected Google’s models and moving it each successful Apple’s Private Cloud Compute. If and erstwhile a smarter Siri arrives this year, it’ll person immoderate superior Gemini DNA.

You could reason Apple made the correct telephone from a business standpoint, but was it the correct Apple move? Consider Tim Cook’s ain words successful a 2009 net call: “We judge that we request to ain and power the superior technologies down the products we make…” That was the instauration of the company’s push to create its ain silicon, which has perfectly been a winning strategy. But either Apple thinks AI models aren’t a superior exertion aft each — much for illustration an underlying work it will build products connected apical of — aliases it has made a superior misjudgment astir AI arsenic the adjacent level displacement and risks falling behind. Low stakes stuff!

And to beryllium sure, Apple doesn’t power the destiny of each portion of the iPhone. It hasn’t gone retired and built a hunt engine, aliases its ain wireless network, aliases an algorithmic societal media platform. All of those things tally connected an iPhone, but they aren’t halfway parts of the iPhone’s identity, and AI could very good upwind up the aforesaid way. Maybe there’s a hint successful the measurement that Apple has seemingly shifted from encouraging developers to adopt its ain App Intents framework to using the Anthropic-developed MCP arsenic the ground for agentic features. If AI conscionable needs to find the correct hooks to get things done, past the peculiar models it’s moving matter less. But it each hinges connected the merchandise that Apple creates astir AI — and that starts pinch Siri.

That’s the existent situation up of Apple: turning Apple Intelligence into a merchandise group really want, not 1 that they consciousness indifferent toward. It needs to move Siri into the point the institution has promised each along, not a glorified timer-setting machine. Apple tin make a beautiful merchandise — nary doubt. Can it do that without power complete its ain models? Can it do that faster than Google aliases Jony Ive aliases immoderate different competitor fresh to make a tally astatine the plot walls? The woody whitethorn beryllium inked, but the existent activity starts now.