Even before President Trump's rates threatened to increase Apple's production company in China, the struggle of the company led to making new products, some people in the lush head office of Silicon Valley to wonder if the company had somehow lost its magic.
The rates, which were introduced on 2 April, ensured that Apple lost $ 773 billion in market capitalization in four days and briefly lost its status as the most valuable listed company in the world. But investors had already begun to acidify in the company and sent the share price by 8 percent in the first four months of the year, double the decline of the S&P 500.
Apple had hoped to breathe new life into his fortunes in the past year with a virtual reality headset, the Vision Pro and an artificial intelligence system called Apple Intelligence. However, the sale of the headset has been a disappointment and the characteristic functions of the AI system have been postponed because it did not work as well as the company expected.
The problems of the company underlines how her reputation for innovation, once considered a fundamental element of his brand, has become an albatros, which fueles fear among employees and frustration among customers. And insiders of the company are worried that, despite the years of gravitational winning profit, Apple is impeded by the political fighting, Penny Pinning and Talent drainage that often major companies, according to more than a dozen former and current employees and advisers.
Apple refused to comment.
It has been ten years since the releases of the most recent commercial successes of Apple: the Apple Watch and AirPods. The services such as Apple TV+ and Fitness+, which introduced it in 2019, are lagging behind Rivals in subscriptions. Half of his sales still come from the iPhone, an 18-year product that is improved step by step almost every year.
Although Vision Pro Sales was disappointing, Apple's problems with Apple Intelligence dysfunction within the organization have uncovered.
In a video presentation of almost two hours last summer, Apple showed how the AI-product would summarize reports and offer writing aids to improve e-mails and messages. It also revealed an improved Siri virtual assistant who could combine information on a telephone, such as a message about someone's travel schedule, with information on the internet, such as an arrival time of the flight.
The AI functions were not available when new iPhones sent. They arrived in October, about a month late and quickly got into trouble. Summaries of notification have displayed news reports incorrectly, so Apple has eliminated that function. Subsequently, last month, the company postponed the spring release of an improved Siri because internal tests discovered that it was inaccurate on almost a third of the requests, three people who were familiar with the project about the condition of anonymity said.
After the delay, Craig Federerghi, the software function of Apple, told employees that the company would re -arrange its managers, so that the responsibility for the development of the new Siri from John Giannandrea, head of the company AI, would be removed and it would give it to Mike Rockwell, the head of the Vision Pro headset.
“Apple must understand what happened, because this is larger than just rearranging the sun loungers,” said Michael Gartenberg, a technology analyst who previously worked as a product marketer at Apple. “If there has ever been an example of too promising and too little delivery, the Apple Intelligence is.” It was the first time in years that Apple had not sent a product that it had unveiled.
Some details about Apple's changes to the Siri team and challenges were previously reported by Bloomberg and the information.
The AI Stumble was set in motion at the beginning of 2023. Mr. Giannandrea, who supervised the effort, early approval from the CEO of the company, Tim Cook, to buy more AI chips, known as graphic processing units, or GPUs, said five people with knowledge of the request. The chips, which can perform hundreds of calculations at the same time, are crucial for building the neural networks of AI systems, such as chatbots, that can answer questions or write software code.
At the time, the data centers from Apple had around 50,000 GPUs that were more than five years old – much less than the hundreds of thousands of chips that were purchased at the time by AI leaders such as Microsoft, Amazon, Google and Meta, these people said.
Mr. Cook approved a plan to double the chip budget of the team, but the financial chef of Apple, Luca Maestri, lowered the increase to less than half, the people said. Mr. Maestri encouraged the team to make the chips they had more efficient.
The lack of GPUs meant that the team that developed AI systems had to negotiate about data center computerpower of its providers such as Google and Amazon, two of the people said. The leading chips of Nvidia were so in question that Apple used alternative chips from Google for part of its AI development.
At the same time, leaders of two of the software teams of Apple fought against whom the rollout of Siri's new skills would lead, said three people who worked on the effort. Robby Walker, who supervised Siri, and Sebastien Marineau-Mes, a senior executive at the software team, struggled about who would have responsibility for some aspects of the project. Both ended with pieces of the project.
The battle followed a broader exodus of Talent by Apple. In 2019, Jony Ive, the most important designer of the company, left to start his own design agency and more than a dozen integral Apple designers and engineers. And then Riccio, the old head of the company's product design that worked on the Apple Watch, retired last year.
Apple has been left in their place with old and new leaders with less product development experience. Mr. Giannandrea, who came to the company at Google in 2019, never led the launch of a controversial product such as the improved Siri. And Mr. Federerghi, his counterpart of software supervision, had never led to a new operating system like some of his predecessors in that role.
Mr Cook, 64, who has a background in operations, has hesitated over the years to give clear and direct guidelines on product development, said three people are familiar with the way the company works.
“It is clearly a breakdown of leadership and communication and internal processes,” said Benedict Evans, an independent analyst who previously worked as a venture capitalist at Andreessen Horowitz.
Apple has not canceled its renewed Siri. The company is planning to release a virtual assistant in the fall to do things such as editing and sending a photo to a friend on request, three people with knowledge of his plans.
Some Apple leaders do not think that the delay is a problem, because none of Apple's rivals, such as Google and Meta, has come up with AI so far, these people said. They believe that there is time to get it right.
While the clock is ticking when repairing Siri, Apple defends the current shortcomings of the assistant. Last month, customers filed a federal lawsuit that Apple accused of false advertisements. Since then, the commercials about Siri have become dark.
Brian X. Chen contributed reporting.
