Apple Inc. AAPL has taken a major step to strengthen its AI and Siri capabilities by making a notable leadership change. The company has appointed Kim Vorrath, a veteran executive with years of experience at Apple, as a senior leader in its artificial intelligence and machine learning division.
What Happened: Vorrath, who played a pivotal role in the launch of Vision Pro software, will now work closely with AI chief John Giannandrea, reported Bloomberg on Friday. This move is seen as Apple’s effort to infuse more rigor into its AI development, indicating the company’s recognition of AI’s significance for its future.
Apple showcased its AI advancements at last year's WWDC, but they have yet to achieve the impact of rivals like OpenAI's ChatGPT or Google's Gemini. While the company has been steadily expanding its AI initiatives, a significant Siri upgrade is anticipated with iOS 18.4. However, its AI-powered news notification summaries, launched earlier, will be paused in iOS 18.3 following criticism over their lack of accuracy.
Apple's decision to bring Vorrath, a seasoned executive with a legacy that includes contributions to the original iPhone software team, into the AI division signals a strategic shift in focus. According to the report, the AI team is now prioritizing the overhaul of Siri's core infrastructure and the refinement of Apple's in-house AI models.
Why It Matters: Apple’s AI advancements are being closely watched, especially in light of the company’s recent challenges in the Chinese market. JPMorgan analyst Samik Chatterjee sees currency woes, China struggles, and lukewarm AI adoption as hurdles for Apple’s upcoming earnings. The company’s grip on China is weakening, and with Beijing’s push to boost domestic brands, Apple is losing its competitive edge in a critical growth market.
Earlier this month, Apple pledged to improve its AI feature after a complaint from the BBC. The company admitted that its AI-generated news summaries on iPhones had been inaccurate.
In November 2024, Apple cautioned investors about potential profit risks tied to its emerging technologies, noting that these innovations might not deliver the same revenue or profit margins as its flagship iPhone lineup.
Price Action: Apple shares ended 0.39% lower on Friday. Year-to-date the company's shares lost 8.64%, as reported by Benzinga Pro.
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