All eyes are on Apple as it aims to demonstrate that it still possesses its innovative spirit, especially after failing to deliver promised enhancements to iPhones that integrate generative artificial intelligence (GenAI), while competitors are advancing rapidly.

During its upcoming Worldwide Developers Conference (WWDC) set to start on Monday in Silicon Valley, Apple will unveil its strategies for its sought-after products and the software behind them.

This event follows a year after Apple announced an AI feature set called “Apple Intelligence,” which included upgrades to its often-criticized Siri voice assistant.

“Apple made plenty of grand promises about features that never materialized,” remarked Gadjo Sevilla, a senior analyst at Emarketer.

Instead, the company postponed the launch of the Siri upgrade, with hopes that it will be ready for the next iPhone release anticipated in the fall.

“I doubt there will be much celebration at WWDC,” Sevilla mentioned to AFP. “The event may serve more as a way for Apple to regain some credibility by showcasing its future direction.”

Industry experts are keenly awaiting to see if Apple acknowledges its AI missteps or opts to focus on less spectacular updates, including a rumored revamp of its operating systems across its devices.

“In short, Apple seems to have underestimated the AI shift, over-promised features, and is now scrambling to catch up,” stated Gene Munster and Brian Baker from Deepwater Asset Management in a note previewing WWDC.

There’s also buzz that Apple might form GenAI partnerships with companies like Google or Perplexity, adding to its alliance with OpenAI announced earlier this year.

‘Double black eye’

Introducing AI into its offerings is just one of Apple’s hurdles.

Developers creating apps and tools for Apple products are likely eager for the company to relax its stringent controls over access to iPhones.

“There’s ongoing tension between Apple and developers,” Sevilla pointed out. “Taking a 30% cut from their earnings and then failing to fulfill promises for new features is quite damaging.”

After a lawsuit from Epic Games, the makers of Fortnite, Apple was ordered to permit outside payment systems in the US App Store, but developers may still be seeking more, according to Sevilla.

“Apple needs to extend an olive branch to the developer community, which has faced many challenges,” Sevilla said. “They cannot thrive within the restrictive environment that Apple has maintained for years.”

As AI gets integrated into Apple software, the company may have to grant developers more access to synchronize their apps with its platform, according to analyst Carolina Milanesi from Creative Strategies.

“Perhaps with AI, it’s time for Apple to reconsider its open versus closed ecosystem approach,” Milanesi noted.

Apple on the defensive

Compounding the excitement leading up to WWDC, renowned iPhone designer Jony Ive has partnered with OpenAI, the creators of ChatGPT, to create a potential competitor for AI engagement.

“This places Apple in a defensive position because the key designer behind your flagship product is indicating that there’s a superior option to the iPhone,” Sevilla observed.

While WWDC historically focuses on software, the analyst speculated that Apple might introduce new hardware to demonstrate that innovation is alive and well.

Additionally, although it may not be discussed at WWDC, Apple has to navigate tariffs imposed by former US President Donald Trump amidst his trade conflict with China, a crucial market for growth and where most iPhones are manufactured.

Trump previously threatened Apple with additional tariffs if iPhone production wasn’t relocated to the US, which analysts consider unfeasible due to costs and capabilities.

“The idea of having an iPhone manufactured in America is unrealistic; shifts in global economics would be necessary,” Sevilla noted.

Nonetheless, Apple enjoys a strong base of loyal fans who are likely to stay committed, regardless of the time it takes for the company to enhance its AI capabilities, Milanesi remarked.

“Do people want a more intelligent Siri? Absolutely,” Milanesi said. “But once you’re with Apple, you typically remain loyal and continue to purchase their products.”