Apple Faces Calls To Reboot AI Strategy With Shares Slumping (yahoo.com) 41
Apple is facing pressure to shake up its corporate playbook to invigorate its struggling artificial intelligence efforts. From a report: Alarmed by a share slump that's erased more than $640 billion in market value this year and frustrated with delays in rolling out AI features, investors are calling for Apple to break with long-standing traditions to make a big acquisition and more aggressively pursue talent.
"Historically Apple does not do big mergers and acquisitions," said Citigroup Inc. analyst Atif Malik, noting that the last major deal was its takeover of Beats in 2014. But, he argues, "investors would turn more positive if Apple could acquire or invest a meaningful stake in an established AI provider."
Apple shares have fallen 16% this year while traders bid up the shares of peers like Meta, which is spending lavishly on AI. While Apple faces other problems, including its exposure to tariffs and regulatory issues, disappointment in bringing compelling AI features to its vast ecosystem of devices has become top of mind for investors.
"Historically Apple does not do big mergers and acquisitions," said Citigroup Inc. analyst Atif Malik, noting that the last major deal was its takeover of Beats in 2014. But, he argues, "investors would turn more positive if Apple could acquire or invest a meaningful stake in an established AI provider."
Apple shares have fallen 16% this year while traders bid up the shares of peers like Meta, which is spending lavishly on AI. While Apple faces other problems, including its exposure to tariffs and regulatory issues, disappointment in bringing compelling AI features to its vast ecosystem of devices has become top of mind for investors.
Meh (Score:4, Informative)
I actually kind of prefer their cautious approach, minus turning it on by default. A lot of this stuff is just not as useful as the snake oil salesmen want you to believe - and overselling abilities will not do companies good down the road.
Re:Meh (Score:4, Informative)
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Indeed. This is the prototypical investor demand for immediate growth via trend chasing that has been brought on by a fear of missing out. Apple ain't broke, but they feel compelled to fix it. Maybe the fact that Apple didn't think the current state of affairs in AI was up to their standard was really just an example of the only child willing to call out the emperor for being naked. But the investors will have none of that; not least of all because they've already also invested in that tailor.
Whether the state of the art is good enough is a good question but a separate question. The problem is that Apple's internal efforts were not only not good enough but also far behind the state of the art. That's why some investors are calling for Apple to make an acquisition, i.e., because they believe that Apple's technology is subpar but external technology exists that is not only better but good enough to buy.
Regarding whether the current state of the art is good enough. It depends. For skeptics, it
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This is the prototypical investor demand
Is it?
I'd say it's some random journalist's conjecture about what investors are demanding.
Apple's share price is declining because of Trump's tariffs on China, where most Apple products are manufactured.
That's a much bigger problem for Apple than AI.
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They believe the best way to day trade is to write articles that will uptick their portfolio
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Yup. And TBH the shares haven't declined that much. $600b sounds like a lot of money, but Apple is trading at $200 ATM and peaked out at something like $230 or $240 when the market was hot before people realized Trump wasn't just talking shit about ruining the economy, but was actually going to do it. The fact that Meta is spending stupid money on AI at the moment ought to be frightening Meta shareholders, not Apple shareholders.
#clickbait
Re: Meh (Score:2)
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A COO is not the same as a CEO. A CEO has vision. A COO executes the vision effectively. A COO is not a visionary.
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Yep, same here. And when the whole deranged hype collapses, they will look at lot better than now.
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I doubt they'll change their approach. Apple is one of the rare monster scale company that isn't at the whims of the VC Bro set, are almost uniquelly immune to activist shareholder stuff, and have never (post jobs return) given a fuck about market hype of anyÂvariety other than its own.
They'll do whatever Tim and crew think is best, and the cautious approach is just fine.
Yeah apples shares might be down 15%, but I doubt apple gives a fuck.
AI is massively overvalued (Score:3)
Reason (Score:2)
Wasn't the reason for the dip, Trump's tariffs?
Somebody wants an exit... (Score:2)
Somebody wants an exit, and is happy to take Apple down when their boat sinks.
It's not "late stage capitalism" it's the NYSE (Score:5, Insightful)
This story is everything that's wrong with this civilization.
One of the most successful, profitable companies in human history is losing speculative value among speculative gambling bookies because it continues to make lots of tangible profit on its tangible products/services, but it isn't metastasizing aggressively enough in the speculative-growth nascent nation-state way that gives the financier-bookie class the morning jollies.
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It's both things of course.
Rapid trading should never have been allowed, it makes the market a game.
The probable best solution is a fee on trades, but the big brokers all do HFT so they are against it.
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The probable best solution is a fee on trades, but the big brokers all do HFT so they are against it.
A fee + a minimum holding time of 1 year. If "investing" isn't really investing, then we still have the problem the OP described.
It would also make sense to have rules that forbid using loans to buy stocks to eliminate shorting and other gambling-type behaviors.
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Back in 2016 Phil Schiller, Apple’s SVP of Worldwide Marketing, declared that removing the headphone jack from the iPhone took "courage".
Real courage will be if Apple ignores the speculators driving down its stock price right now and continues with its current strategy. Apple does not need to pump up its stock price. It still has a 3 trillion dollar market cap, with $50 billion in cash on hand. It can just ride the AI bubble out without shedding any sweat.
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Problem is that its current strategy seems hard to identify.
I'm not gonna sell Apple. Every time I did, I ended up being sorry. I would be worth over $100M had I never sold some of my AAPL. I'm hanging on to what I have left.
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If you want to see what happens to companies that choose to ignore or not take advantage of upcoming trendy technology, look no further than Intel, whose CEO essentially has said the race for AI is over for that company, and it's stock price and market share has dropped significantly. Apple does not want to be the next Intel, even if it has 50 billion in cash.
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The truth is we don't know. Look how much Facebook dumped into the whole "metaverse" thing. Never happened and all that money went down the drain (meanwhile, their core business lost significant share to TikTok).
Look at smartphones. Microsoft invested a ton into them before anyone else. They were determined to own that space when it became a reality and. . .they failed to properly image what a smartphone ought to look like and so despite some major acquisitions and major investments they never became a real
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Stupid take. The stock market is always forward-looking. If you want your company stock to command a hefty premium, you need to be able to show a believable roadmap to riding major trends into making a lot of money. it's okay if you can't, but still make a lot of money right now and tomorrow. Just don't go Pikachy-face that this is indeed reflected in your stock valuation.
Re:It's not "late stage capitalism" it's the NYSE (Score:4, Funny)
Stupid take. The stock market is always forward-looking. If you want your company stock to command a hefty premium, you need to be able to show a believable roadmap to riding major trends into making a lot of money. it's okay if you can't, but still make a lot of money right now and tomorrow. Just don't go Pikachy-face that this is indeed reflected in your stock valuation.
The phrase "stupid take" followed by a paragraph promoting the confusion between tangible value from solid revenue-making product profitability and speculative value self-induced up or down by the speculations of the financier-sportsbook class, which is what my "take" is talking about.
It's the "do you even lift, bro?" of the business world.
"It is an incontrovertible fact that your company, which makes devices and software, has 4 decades of being insanely profitable on a planetary scale. But do you even Mergers and Acquisitions bro? Yes, your insanely profitable products - which have become the requisite tools for anyone who needs to access and participate in civilization - are going strong across the entire planet. It's no longer enough to be wildly successful in generating actual dollars via selling products. To have value you must also be aggressively moving to slurp up everything and bring the entire future of humanity into your proprietary IP portfolio in order to succeed at generating potential future dollars via capturing all emerging markets and all regulatory structures.".
When you play the game of thrones, you win or you die.
Gross.
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you need to be able to show a believable roadmap to riding major trends into making a lot of money.
Need to show what? You've literally summarized what Apple has been doing better than almost every other company on Earth for 40 years running.
Put it another way -- today all your assets have been seized and you're being forced to invest your entire net worth into either Apple OR OpenAI.
Which one are you investing in, and why?
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Preach.
This headline, two years ago: Apple Faces Calls to Reboot Blockchain Strategy
Because, if there's anyone who knows how to run tech companies, it's Robinhood day traders.
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Apple is listed on NASDAQ, not the NYSE.
Shut up (Score:4, Interesting)
There is zero reason (Score:2)
...for Apple to be doing AI research
What's the case for acquisition? (Score:3)
Absent a fairly specific argument why Apple needs to own one; rather than just snapping up some of the useful people or commanding the influence that being a customer with actual money tends to provide over suppliers that are in the process of bleeding out, the idea that Apple needs to buy into 'AI' seems sort of like the idea that Apple needs to buy into DRAM, except that it's vastly more evident that Apple's products actually need DRAM; and Apple still doesn't go there because why bother with a capital intensive business whose margins are constantly buffeted by spot prices and on the thin side when you are buying enough that you don't need to worry about your place in line?
Apple has to do it (Score:2)
In investing terms the FAANG companies are Facebook, Amazon, Apple, Netflix and Google. Nvidia should be in there too as the most valuable company in the world. But notice that OpenAI and Anthropic, etc are not in that group, yet they own and control much of the most powerful AI at present.
ChatGPT alone gets more than 5 billion visits per month.
https://explodingtopics.com/bl... [explodingtopics.com]
Yes they are burning through cash to get that, but at some point someone will successfully monetize this. The AI companies will have
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So far the LLM guys have appeared to be relatively low moat; with significantly cheaper and only modestly worse competition not far behind the big names and ongoing contention between the ones you've heard of.
If Google, whose main obstacle to dominance of the search market is its own self destructive tendencies;
Re: Apple has to do it (Score:2)
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Yes they are burning through cash to get that, but at some point someone will successfully monetize this.
I'm not so sure. There are already a ton of open source models. It appears that all sorts of people are capable of making LLMs. The main barrier appears to be hardware. The successful monetization is already happening—it's Nvidia! If anyone else makes money, it will be the cloud computing companies, but even then it's a complete race to the bottom where margins will be razor thin.
We have no idea whether AI will be successful or if this bubble will burst and the trend will fade. But even if it is succe
Investors ARE the problem (Score:2)
Unless they were part of an IPO or additional share offering, they are parasites the lot of them.
The "demos" coming back to haunt them. (Score:2)
Too many investors and users saw the vision around AI in iOS and they wanted it. And the backpedaling is hurting them, because they can't get there soon and may never get there.
That kind of thing has to just work. Text summarization? One two many gobbled messes and boom, that feature gets turned off.
Oddly, Microsoft isn't under similar pressure because, well, nobody expects them to do "awesome" with anything. If Copilot comes to mostly naught, bring in the Clippy 2.0 memes and they will move on.
Still talking about this shit? (Score:2)
Since "AI" is really only useful for a tiny fraction of what people claim it does, and is really only used for data mining, bad help desk experiences, and scrambled press releases, how about we laud the companies NOT spending billions on vapor ware? I hope Apple loses a ton of value, because it'll be a great buy for when this idiocy comes to an end. "Remember when we thought AI was real? Oh, how stupid were we back then."
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Agreed. Also, my iPhone 11 Max's Siri while not too intelligent is near-perfect at doing simple things like turning on and off a reminder or alarm, or the flashlight, when I am half asleep. I can tell it to set a 10 minute timer and know it is just going to work. (A few times it has said nothing but interacted without voice, so I would say just 99% perfect). Not so much on email search functionality, but the Search itself is not great. Also would like to be able to play a YouTube Music song without unlocki