Key insights
- Apple's Worldwide Developers Conference (WWDC) is underway, with investor focus on potential AI announcements. Despite peers heavily investing in AI, Apple is perceived as not having an 'AI problem,' with its stock reaching record highs even without significant AI integration. Analysts suggest Apple's hardware focus and less aggressive AI spending differentiate it from other tech giants, implying a potentially less disruptive impact on its market position compared to competitors.
Apple (AAPL) is kicking off its annual Worldwide Developers Conference on Monday in Cupertino, CA. While investors and iPhone customers will be tuning in this week to hear the newest features for Apple devices, will AI be one of them?
Morning Brief Host Julie Hyman and Barron's Investor Circle Newsletter editor Josh Schafer discuss Apple's lack of an "AI problem" as its Big Tech peers rush to adopt the technology.
All right, finally we got to get to WWDC, which is Apple's big uh worldwide developer conference. It kicks off today. And, um, I was reading Mark Gurman's latest on the sort of like internal personnel stuff that was, you know, kind of the back story of AI for the company. And I think we continue to expect something on the AI front. I was frustrated again this weekend trying to tell Siri something, and it didn't
it's still not like hearing me, right? I mean, Alexa does that too, right? But still, it's you want them to get it as as you know, most of us have iPhones, so we want them to get it right from a user perspective, I think. And of course, as an investor, you want them to get it right. The stock has rallied even without it.
Stock's at a record high.
Yeah.
They don't have an AI problem. I I've been anti-Apple has an AI problem for a while now. I I just don't get it.
Oh really?
They think they have an AI problem internally.
I think internally, yeah, because they all live in a tech bubble, too. We talk a lot about the difference between how people talk about AI in the Silicon Valley area of this country and how people talk about AI in the rest of the world. But I I think they're right now the hardware piece, a hardware piece of the AI trade. I use AI on my phone, on my Apple phone, I use it on my Apple laptop. That's fine. They're not investing that much money in AI either. It's not like they're one of the $200 billion capX companies. Then, yeah, if I was an investor, I can sit there and slam the table and say, where is the AI that you're spending all of this on? But I think there's also a reason they're not doing that. It's not, I don't think it's as existential to them. It is existential to Google. If we all started using chat GPT for search, etc., it is a massive problem for Google.
Sure. Yes, yes.
It could be a massive problem for Microsoft. I don't see unless someone is going to come out with a new iPhone, which I've not heard anything about, a new smartphone that we're all going to own. It is not existential to Apple.
I I have been in your camp, but I just have had analyst after analyst after analyst say it's important for them to have this, but I, you know, as you say, you use AI on the phone, but use it through apps, which is pretty much how you do most things on the iPhone anyway.
That's the business they built. That is like what the services business of Apple has been for years. Is I now get a new iPhone every two or three years, basically just because I need one, not really because I care because there's some upgrade or whatever. My battery starts dying, so I go and get a new phone. And then you get all the apps and that's how they get all their money and there you go. That's and I also thought the Apple Mac story that came out of earnings was interesting. More people are buying the I think it's the Mini Mac.
It's no, it's the it's the cheaper one. I know what you're talking about.
They're buying the cheaper one to run their to run their AI models on. Yeah. That's a boost too. I I just don't see what what AI thing are they supposed to build?
Neo. That's what people were telling us, yes.
Siri would have to get so much better for me to start using it.
Yes. Yes. I know.
It's so far behind.
I just talk I just talk to it to dicta dictate texts and even that it doesn't always
No, it's bad at that. Yeah.
The texts come in with weird misspellings or wrong words. Yeah, yeah, yeah, it's better if I just like rather than telling it, I it's better when I just use the microphone thing on the on the text. You know what I'm talking about? That dictation is better than telling Siri what to do.
Yeah, I haven't used Siri on my phone. I don't really think ever. So I guess maybe that's part of my
That's the only time the only time I use it is if I'm driving and I wanted to call someone.
Okay, yeah. I've never had hey Siri on my phone activated.
Okay.
So maybe that's why even as a consumer, I'm not like where's where's Apple's AI? I just like, I don't
No, but I think you're right. There's a disconnect between like what, um, regular users want and what the street or Silicon Valley thinks Apple should be doing.
And they have more regular users now than pretty much any tech company I can think of. Their general consumer is just an everyday person that just wants their phone to work. They want to send texts and they want to scroll on social media and spend their time that way. They don't really care that much about the cool text.
I mean, the other thing I would say is I would not be shocked if the stock fell this week after WWDC because that's just kind of how these events feel now. It's like you they say something and unless it is revolutionary.
Yeah, it's up 13% this year. Suddenly up 54% over the past year and it was only down 1% on Friday. So it actually, it didn't, it didn't fall as much as the market or some of the other. Yeah. So, I mean, I certainly think you could see it being risk off, yeah.
And this is Tim Cook's last one, last WWGC.
Oh, we got to watch the full thing now.
Do we?
Yeah. Now I'm all in. That's my whole afternoon, Julie.
Okay.
I'll be taped.
Clear your calendar.