Apple's (AAPL) artificial intelligence initiatives are facing challenges. The company introduced its Apple Intelligence platform at last year's WWDC developer conference, hoping it would enhance sales of the iPhone and other products. However, the strategy hasn't succeeded, as iPhone sales have declined year over year in the most recent quarter. Now, Apple has announced a delay in the release of a more advanced version of Siri, a highly anticipated component of its AI strategy. The company stated that the new Siri is taking longer than anticipated and is expected to launch later this year. Additionally, Apple is still working on implementing Apple Intelligence in China, one of its key markets. AI is a crucial selling point for smartphone consumers in this region, according to market research firm Canalys, and local competitors like Honor and Xiaomi are quickly filling the gap. Meanwhile, Apple's stock price continues to take a hit alongside its Big Tech peers. Shares have dropped 11% year to date, following Nvidia's 17% decrease and 9% declines for both Microsoft (MSFT) and Amazon (AMZN). On Wednesday, Morgan Stanley analyst Erik Woodring revised his price target for Apple from $275 to $252, citing concerns that delays with Siri could affect iPhone upgrade cycles in 2025 and 2026.

Woodring noted that approximately 50% of iPhone users who did not upgrade to the iPhone 16 held onto their older devices due to the delays with Apple Intelligence. "It's quite surprising for Apple to experience a delay of about a year, " stated Gene Munster, managing partner at Deepwater Asset Management, in a commentary to Yahoo Finance. "This reflects broader issues beneath the surface. Publicly, Apple presents the message that its intelligence is going to be fantastic, but behind the scenes, they have a significant amount of work ahead, " he added. If Apple aims to improve its AI efforts, it must act swiftly to avoid falling further behind competitors both domestically and internationally. A departure from Apple's usual strategy Apple Intelligence was intended to be a major incentive for consumers to upgrade to the iPhone 16 and iPhone 16 Pro. However, the company didn’t roll out its software platform until October of last year, significantly later than the release of its latest smartphone lineup. Furthermore, despite showcasing various capabilities of Apple Intelligence during WWDC 2024, the company indicated that the rollout of the service’s features would be gradual throughout late 2024 and 2025. This slow release makes upgrading to the newest iPhone less enticing, as users would have to wait months to access the platform’s most crucial features.