Before the President Trump’s tariffs threatened to threaten Apple’s production activities in China, the company’s struggles have led some people within their rich Silicon Valley headquarters to wonder if society somehow lost magic.
The tariffs, which were introduced on April 2, caused Apple to lose $ 773 billion for market capitalization in four days and briefly lost its position as the most valuable public company in the world. However, investors have already begun to sour in the company and sent the stock price by 8 percent in the first four months of the year, doubled the decline with the S&P 500.
Apple has hoped to revive its wealth with a headset of virtual reality, Vision Pro and artificial intelligence called Apple Intelligence in the last year. However, the sale of the headset was disappointing and the AI signature feature was postponed because it did not work as the company expected.
The company’s problems emphasized how its reputation for innovation once considered the basic element of its brand, it became Albatros and supported the anxiety between employees and frustration among customers. And the initiates of the company are afraid that Apple, despite years of profits that resist gravity, are affected by political infighting, penny grip and talents, according to more than a dozen of former and current employees and advisors.
Apple refused to comment.
It has been ten years since the release of the latest commercial achievements of Apple: The Apple Watch and AirPods. His services such as Apple TV+ and Fitness+, which she introduced in 2019, lags behind the opponents in the subscription. Half of its sales still come from the iPhone, an 18 -year -old product that gradually improves almost every year.
While Vision Pro’s sales were disappointing, Apple’s problems with Apple Intelligence exposed to dysfunction inside the organization.
In almost two-hour video presentation last summer, Apple showed how AI would summarize the announcement and offer tools to improve e-mails and messages. She also revealed an improved virtual assistant Siri, who could combine information on the phone, such as a message about someone’s travel itinerary, with information on the web like the time of the flight.
The AI function was not available when you were sent new iPhones. They arrived in October about a month late and quickly encountered problems. Summary of the announcement of the distorted news report, which leads Apple to deactivate this function. Then, last month, the company postponed the spring edition of the improved Siri, because internal testing found that it was inaccurate almost a third of the requests, said three people who spoke about the condition of anonymity.
After the delay, Craig Federighi, Apple software chief, told employees that the company would move its managers and eliminate responsibility for the development of the new Siri by John Giannandre, the AI manager, giving it to Mike Rockwell, the head of his Vision for Headset.
“Apple must understand what happened because it is more than just rearranging chairs on board,” said Michael Gartenberg, a technology analyst who previously worked as a product trader in Apple. “If there was an example of excessive and insufficient delivery, it is Apple Intelligence.” It was the first time in years when Apple did not hit the product he revealed.
Some details of Apple’s changes in its Siri team and challenges were previously reported Bloomberg and Information.
The AI tripping was started at the beginning of 2023. Chips that can perform hundreds of calculations at the same time are decisive for creating neural networks of AI systems such as chatbots that can answer questions or write a software code.
At that time, Apple’s data centers had about 50,000 GPUs, which had more than five years old – much less than hundreds of thousands of chips that AI leaders, such as Microsoft, Amazon, Google and Meta at that time, said these people.
Mr. Cook approved the plan to double the budget of the team chips, but the Chief of Finance of Apple, Luca Maestri, reduced the increase to less than half that people said. Mr. Maestri encouraged the team to streamline chips that had more efficient.
The GPU deficiency meant that a team of AI -developing systems had to negotiate with the computing power of data centers from its providers such as Google and Amazon, two people said. The front chips created by NVIDIA were in such a demand that Apple used alternative chips created by Google for some of its AI development.
At the same time, the leaders in two Apple software teams fought for who would lead the new Siri skills, three people who worked on their efforts. Robby Walker, who supervised Siri, and Sebastien Marineau-Mes, manager of the software team, fought for who would be responsible for some aspects of the project. Both ended up with pieces of the project.
Infighting followed by a wider Exodus Talent from Apple. In 2019, Jony Ive, the company’s chief designer, left his own design company and poison more than a dozen integral designers and engineers Apple. And Dan Riccio, a long -time manager of the company that worked on Apple Watch, left last year.
Instead, Apple was left with old and new leaders with less experience in product development. Mr. Giannandrea, who joined Google in 2019, has never led the launch of a significant product like improved Siri. And Mr. Federighi, his counterpart overseeing the software, has never led the creation of a new operating system, such as some of his predecessors in this role.
Mr. Cook, 64, who is in operation, has hesitated over the years with the provision of a clear and direct instructions on the development of products, said three people who are familiar with how the company operates.
“It is obviously a schedule of leadership and communication and internal processes,” said Benedict Evans, an independent analyst who previously worked as a risky capitalist in Andreessen Horowitz.
Apple did not cancel its redesigned Siri. The company plans to release a virtual assistant in the fall, who is able to do things such as adjusting and sending a photo on request, three people said with knowledge of their plans.
Some of Apple’s leaders don’t think that delay is a problem, because none of Apple’s opponents, such as Google and Meta, has not yet found AI, these people said. They believe it is time to fix it.
When the clock checks when repairing Siri, Apple will defend the current shortcomings of the assistant. Last month, customers filed a federal action accusing Apple of fake advertising. Since then, his advertising about Siri has darkened.
Brian X. Chen contributed by report.
