Despite Tariffs and Weak iPhone Sales, Apple Now Faces a Much Bigger Problem

Apple may be facing a challenge that surpasses its usual concerns, such as tariffs or weaker consumer spending. This issue was highlighted in a recent blog post by John Gruber, a well-known Apple commentator who has followed the company’s developments for over 20 years. Gruber, who is often seen as an admirer of Apple, did not hold back in criticizing the company for damaging its credibility by promoting artificial intelligence (AI) features that were not ready for release.

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“Damaged might be too soft of a word,” Gruber stated in his post on Wednesday. “The company squandered it. This didn’t just happen to Apple—executives inside the company made these decisions.”

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Apple first introduced its Apple Intelligence AI features at the WWDC developer event in June of last year, promising a more advanced and intuitive Siri assistant. For example, Siri was supposed to recognize when a friend sent their address via text and automatically update the contact details when prompted. The company continued promoting these enhancements when unveiling its latest iPhone models in September.

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Apple then reinforced its messaging through advertisements, including a commercial featuring a woman asking Siri to recall the name of someone she met months ago at a café.

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Gruber questioned Apple’s decision to showcase these AI capabilities so early. “Who made the call to include these features in the WWDC keynote, promising they would arrive within a year, when they were still too unfinished to even be demonstrated in a controlled setting for the media?” he wrote.

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He also challenged Apple’s subsequent marketing strategy: “Three months later, who decided Apple should double down, airing a TV commercial advertising these features as a key selling point of the iPhone 16 lineup? Not just any products, but Apple’s flagship devices—the pride of the company and the envy of the industry—when those features remained incomplete or possibly even nonfunctional?”

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According to Gruber, Apple included these yet-to-be-released Siri features in multiple iPhone 16 ads, even though they might not be ready “until months after the iPhone 17 lineup is introduced.”

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Apple did not respond to MarketWatch’s request for comment.

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Gruber noted that Apple was not always seen as trustworthy. When Steve Jobs returned in 1997, the company had barely survived bankruptcy, but its credibility was in ruins. Jobs worked to restore trust by ensuring Apple consistently delivered on its promises.

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During the early days of the AI boom, while other tech companies frequently mentioned AI on earnings calls, Apple’s CEO Tim Cook defended a more cautious approach. “We tend to announce things as they come to market, and that’s our M.O.,” Cook said during an August 2023 earnings call.

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However, the advanced Siri capabilities Apple showcased last year were not market-ready. Gruber criticized Apple for essentially creating a “concept video” rather than a demonstration of a functional product.

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“Modern-day Apple does not release concept videos,” he wrote. “They only showcase real, working products and features.”

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He also referenced an old Fortune article about Jobs’s dissatisfaction with MobileMe, a cloud-based email service that launched in 2008 but failed to work as advertised. Jobs reportedly held employees accountable for damaging Apple’s reputation. Gruber speculated whether a similar internal reckoning occurred over Siri’s delays.

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According to Bloomberg News, Apple’s Siri team did hold a meeting in which the delays were acknowledged as embarrassing, especially since the company had publicly promoted the AI features. Apple declined to comment on that report and did not respond to MarketWatch’s request for a statement.

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For longtime readers of Gruber’s blog, his criticism stood out. “I’ve followed Daring Fireball for 23 years, and he’s never been this critical of Apple,” Nick Farina, one of Gruber’s readers, wrote on X. “It reads like an obituary.”

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Following reports confirming Apple’s Siri delays on Friday, March 7, the company’s stock experienced a sharp drop throughout the past week. Apple shares declined by 10.7% over the week, a drop more than twice as steep as that of Tesla Inc. (TSLA), which was the second-worst performer among the “Magnificent Seven” Big Tech stocks. Apple’s stock fell in four out of five trading sessions, except for a modest recovery on Friday.

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Despite this setback, some Apple supporters remained optimistic. Wedbush analyst Daniel Ives expressed confidence in the company’s long-term AI ambitions. “Rome wasn’t built in a day, and neither will Apple’s AI strategy,” Ives wrote on Friday. “But the foundation is being laid with Apple Intelligence, and it will reshape Apple’s growth story in the years ahead.”

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