Apple’s (AAPL) iPhone hype could possibly be a factor of the previous — until it delivers on AI.
“I might intuitively say that we’re at a degree … that I do not see tremendous cycles as being form of the dynamic round it,” AT&T (T) CEO John Stankey advised Yahoo Finance’s Government Editor Brian Sozzi at Goldman Sachs’ Communacopia + Expertise Convention on Tuesday.
Stankey mentioned with out main software program advances — particularly in synthetic intelligence — Apple may wrestle to reignite the blockbuster gross sales cycles that when outlined its launches.
“These are actually turning into extra software-driven units,” Stankey defined. “Software program tends to be incremental. It is not essentially constructed on a {hardware} platform that is put out. And as software program continues to get higher and higher, that is what tends to drive engagement [and] utilization.”
Apple CEO Tim Cook dinner holds an iPhone 17 professional and an iPhone air, as Apple holds an occasion on the Steve Jobs Theater on its campus in Cupertino, California, U.S. September 9, 2025. REUTERS/Manuel Orbegozo · Reuters / Reuters
His feedback strike on the coronary heart of a rising investor concern: that Apple is lagging behind rivals within the AI race. Firms like Google (GOOG), Microsoft (MSFT), and Samsung (SSNLF) have spent the previous yr rolling out AI-powered options throughout search, units, and productiveness software program. Whereas Apple has launched its personal sweep of options, the corporate has taken on a extra staggered method.
Some key capabilities — together with a extra deeply built-in and conversational Siri and Visible Intelligence instruments — have but to be totally rolled out.
For shoppers, the stakes are equally excessive. With no seen leap ahead, the brand new iPhone 17 dangers being seen as a marginal improve moderately than essential gadget, in response to Stankey.
“I might count on that this may be the case and there will be some shoppers who discover a compelling must go and purchase a brand new gadget,” he mentioned. “However I do not assume it may be one thing the place persons are going to be standing in a line beating down the doorways at report ranges for that day.”
That is a pointy distinction with the heyday of the iPhone, when “tremendous cycles” — years with main design overhauls or groundbreaking new options — despatched shoppers flooding Apple shops and propelled shares to new highs.
Whether or not the tech large can give you functions that make the iPhone indispensable stays to be seen, Stankey added, noting Apple will want its AI to be “distinctive to different AI instruments or units.”
Apple shares have been barely decrease in Tuesday buying and selling. The inventory has dropped 4% yr up to now, in comparison with the S&P 500’s (^GSPC) 11% achieve.
Francisco Velasquez is a Reporter at Yahoo Finance. He might be reached on LinkedIn and X, or by way of e-mail at [email protected].