Even before President Trump’s invoices threatened to upgrade Apple’s construction operation in China, the company’s struggle to make new products drove some people to Silicon Valley’s rich headquarters to wonder if the company had lost its magic somewhat.
The invoices, which were imported on April 2, caused Apple to lose $ 773 billion in four -day market capitalization and to lose its place as the most valuable public company in the world. However, investors had already begun to go to the company, sending its share price by 8 % in the first four months of the year, the S&P 500 reduction was doubled.
Apple was hoping to revive its possessions in the past year with a virtual reality headset, the Vision Pro and an artificial intelligence system called Apple Intelligence. However, headset sales were a disappointment and the signature features of the AI system have been postponed because it did not work as the company waited.
The company’s issues emphasized how its reputation for innovation, having considered a fundamental element of its brand, has become an albatross, fueling the anxiety between employees and the frustration between customers. And confidential companies are worried that Apple, despite years of profits that reacted to gravity, is prevented by political dispute, Penny Pinching and draining talents often covering large companies, according to more than twelve former and current employees and advisers.
Apple refused to comment.
It’s been a decade since Apple’s latest commercial hits: Apple Watch and Airpods. Its services such as Apple TV+ and Fitness+, which it introduced in 2019, are lagging behind the opponents in subscriptions. Half of its sales come from the iPhone, an 18 -year -old product that gradually improves almost every year.
While Vision Pro sales were frustrating, Apple’s problems with Apple Intelligence exposed malfunction within the organization.
In an almost two -day video presentation last summer, Apple showed how AI will summarize alerts and offer writing tools to improve emails and messages. He also revealed an improved virtual Siri assistant that could combine information on a phone, such as a message about one’s journey trip, with information on the web, such as an hour of flight arrival.
AI features were not available when new iPhones were sent. They arrived in October, about a month late, and quickly ran into a problem. The summaries of notification misleading news reports, leading Apple to turn off this feature. Then, last month, the company uploaded the release of the spring of an improved Siri because internal tests found that they were inaccurate at almost one -third of the demands, said three people familiar with the work they talked about on the condition of anonymity.
Following the delay, Craig Federighi, head of Apple’s software, told employees that the company would rebuild its executives, deducting responsibility for the development of the new Siri by John Giannandrea, head of the company’s AI and providing Mike Rockwell, his head.
“Apple has to understand what happened, because it is bigger than to rearrange the deck chairs,” said Michael Gartenberg, a technology analyst who has previously worked as a product trader in Apple. “If there has ever been an example of excessive promotion and sub-production, is Apple Intelligence.” It was the first time Apple had not sent a product she had revealed.
Some details on Apple’s changes to the Siri team and its challenges were previously mentioned by Bloomberg and information.
AI Stumble was set in early 2023. Mr Giannandrea, who oversees the effort, has requested approval from the company’s chief executive, Tim Cook, to buy more AI brands, known as graphics or GPUs, five people with knowledge of the request. The chips, which can perform hundreds of calculations at the same time, are critical to building the neural networks of AI systems, such as chatbots, which can answer questions or write software code.
At that time, Apple’s data centers had about 50,000 GPUs that were over five years old – much less than the hundreds of thousands of brands 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 team’s budget, but Apple’s finance leader Luca Maestri reduced the increase to less than half of it, people said. Mr Maestri encouraged the team to make the chips that had more effective.
The lack of GPU meant that the team that was developing the AI systems had to negotiate the power of the data center of data by providers such as Google and Amazon, reported two of the people. The top brands made by Nvidia were at such a requirement that Apple used alternative brands Google made for some of the AI development.
At the same time, leaders in two of Apple’s software teams fought for who would promote the development of Siri’s new abilities, three people who worked in the effort. Robby Walker, who oversees Siri, and Sebastien Marineau-Mes, senior director of the software team, fought for who would be responsible for some aspects of the project. They both ended up with pieces of the project.
The controversy followed a wider exit of Talent from Apple. In 2019, Jony Ive, the company’s chief designer, left to launch his own design company and transfer more than twelve complete designers and engineers of Apple. And Dan Riccio, the long -term head of the company’s product design, who worked at Apple Watch, retired last year.
In their place, Apple has been left with old and new leaders with less product development experience. Mr Giannandrea, who joined the company in 2019 by Google, had never led to start a high profile product such as improved Siri. And Mr Federighi, his software counterpart, has never led to the creation of a new operating system, as some of his predecessors in this role.
Mr Cook, 64, who has a background in businesses, has hesitated over the years to provide clear and immediate guidance on products, he said three people who are familiar with the manner of operating the company.
“It is clearly a distribution of leadership and communication and internal processes,” said Benedict Evans, an independent analyst who previously worked as a capital businessman at Andreessen Horowitz.
Apple has not canceled the refurbished Siri. The company plans to release a virtual assistant in the fall capable of doing things such as elaborating and sending a photo to a friend at the request, three people with knowledge of its plans reported.
Some of Apple leaders do not believe that delay is a problem because none of Apple opponents, such as Google and Meta, have yet to understand AI, these people said. They believe there is time to do it right.
As the tick watch to determine Siri, Apple will defend the current assistant shortcomings. Last month, customers filed a federal trial that accused Apple of false advertising. Since then, his ads for Siri have been darkened.
Brian X. Chen They contributed reports.
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