Shares of Apple fell 18.1% in the first half of 2025, as Apple’s management delayed its “Apple Intelligence” AI-powered Siri vaporware, raising concerns about the company’s AI capabilities and prompting consideration of third-party models. Additionally, negotiations with China, Apple’s primary source of product assembly, were strained by the Trump administration’s push for reciprocal U.S.-China trade.
Billy Duberstein for The Motley Fool:
Of all the big technology companies, perhaps none have as much exposure to China as Apple. Despite CEO Tim Cook migrating some iPhone production to India in recent years, about nine in 10 iPhones are still manufactured in China and would therefore be subject to any tariff imposed on goods made in the Middle Kingdom.
MacDailyNews Take: If only someone could have foreseen that China dependence would be an issue.
It’s smart for both Apple and Foxconn to diversify assembly outside of China. There’s no sense having all of your eggs in one basket. — MacDailyNews, April 2, 2019
The time to accelerate plans to move production out of China was November 9th 2016, but, hey, six years late is better than never! – MacDailyNews, December 4, 2022
The other big worry Apple endured was about artificial intelligence… With AI, it’s still unclear how Apple will compete. About a year ago, management announced new AI-powered features to be introduced over the course of the next year. But one year later, the company has clearly disappointed.
In June, Apple announced the new AI-powered Siri would be delayed at least until 2026. Moreover, Bloomberg reported Apple may be giving up on building its own AI models and was in talks with both OpenAI and Anthropic to power the “new” Siri, which is now slated for next year…maybe.
That may be a smart and pragmatic move if these AI-first start-ups can make better large language models than Apple, and if LLMs become somewhat “commoditized.” Still, ceding that ground opens a dependence on these new AI companies…
MacDailyNews Take: As a wise man used to say:
I’ve always wanted to own and control the primary technology in everything we do. – Steve Jobs
[T]he situation would become really complicated if one of these companies decided to become a hardware competitor.
And OpenAI is doing just that. A few days ago, OpenAI acquired former Apple design wizard Johnny Ive’s design start-up for $6.5 billion, with the aim of creating a new AI device. While we don’t yet know what kind of device these two are working on, it could potentially be a disruptor to Apple’s portfolio. So it’s probably not great that Apple may also be depending on OpenAI to power Siri in the future…
Until these issues are resolved, I wouldn’t expect a bounce back or any significant upside in the stock.
MacDailyNews Take: A trade deal with China will arrive eventually, but hopefully, sooner than later, so will something meaningful on the Siri / AI front!
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