Apple's AI Siri Update Reportedly Facing Uphill Battle

Core Insights - Apple is struggling to upgrade its AI voice assistant, Siri, facing significant challenges in integrating advanced large language models (LLMs) [2][3][4] - The company is expected to showcase its AI progress at its annual event, but investor sentiment is pessimistic regarding any major announcements [2][5] - Recent reports indicate a 20% drop in Apple's stock price, marking its worst performance in 15 years, largely attributed to its lag in AI compared to competitors like Microsoft and Google [5] Group 1: AI Development Challenges - Apple is attempting to develop its own LLMs to enhance Siri, which is used in hundreds of millions of devices, but has encountered bugs during integration [3][4] - Former executives have criticized the gradual development approach, suggesting that a complete overhaul of Siri is necessary for meaningful improvement [4] - The updates to Siri are a key part of Apple Intelligence, a suite of AI features aimed at boosting hardware sales [4] Group 2: Market Performance and Investor Sentiment - The recent stock price drop of 20% reflects investor concerns about Apple's competitive position in AI [5] - Experts predict that the upcoming Worldwide Developer Conference (WWDC) will highlight Apple's shortcomings in AI compared to its rivals [5] - Craig Moffett from MoffettNathanson notes that Apple will be more cautious in its presentations, avoiding overpromising on unready features [6] Group 3: Broader Business Concerns - In addition to AI challenges, Apple faces tariffs that could impact its hardware profit margins [6] - The services division, which has a gross profit margin of 74%, is under legal scrutiny regarding App Store fees and payments from Google for being its default search engine [7]