Apple, Once a Latecomer with Maps and Pencil but Always Caught Up... Will It Pull Off Another AI Turnaround? [Weekend Money]

Regained Top Market Cap in Four Months...Mixed Expectations and Disappointments
Siri AI Starts with Google's Gemini Engine
Turners Era Begins in September, Foldable Devices as the First Stage

Apple, the world’s largest company by market capitalization, reported its quarterly results on July 30 (local time), and the numbers themselves were not bad. Both revenue and profit either met or exceeded market expectations, with iPhone sales up 22% and MacBook sales up 29% compared to a year earlier. Nevertheless, its after-hours stock price fell 6.3%.

Kim Kyungbin, a researcher at Samsung Securities, analyzed in a report published on July 31 that the decline in Apple’s share price was due to the market’s reaction to its profitability outlook, rather than the earnings themselves. He explained that the company’s gross profit margin (GPM) guidance for the September quarter fell short of market expectations, citing increased memory semiconductor costs as a key factor. Additionally, Apple’s services revenue growth rate slowed from 16% in the March quarter to 12% in the June quarter, and Chinese sales, despite rising 22%, still missed expectations.

Regained Top Market Cap, But Preparation for the AI Era Remains Uncertain

Although Apple reclaimed the world’s top spot in market capitalization for the first time in four months, both optimism and concern surround the company. Above all, there remains a prevailing view that Apple is “lagging behind in the AI era.” In many discussions about AI era winners, Apple is not included on the list.

However, this researcher’s analysis suggests there is ample reason for optimism considering Apple’s track record. He points to Apple’s device ecosystem—the so-called "gardened wall"—as a continuing source of strength. Once consumers start using Apple devices, the structure makes it difficult to switch to competing platforms, and that dynamic remains intact.

Furthermore, the absence of clear use cases for consumer-facing AI services is viewed as an opportunity rather than a setback; the market is not already locked up by winners. Apple is also positively assessed for navigating semiconductor supply constraints relatively smoothly, thanks to its hardware competitiveness.

Siri AI Begins with Others’ Engines...Could Transition Like ‘Samsung and Qualcomm Chips to Apple Chips’

After much trial and error with various AI services, Apple recently began beta testing its AI platform, Siri AI. Notably, this version runs on Google’s Gemini AI model instead of one developed in-house by Apple.

The researcher sees this as another demonstration of Apple’s strengths: the company often enters proven markets slightly later than competitors, initially using third-party technologies before eventually replacing them with its own.

Maps offer a representative example. The iPhone first launched in 2007 with Google Maps installed; by 2012, five years later, Apple had switched to its own Apple Maps.

The same pattern has repeated for hardware as well.

In the case of chips, the “brains” of various devices, early iPhones used chips designed and manufactured by Samsung. Beginning with the A4 chip in 2010, Apple moved to in-house designs, and today Apple Silicon is considered its core competitive advantage. The Mac’s CPU followed a similar path: after relying on Intel chips from 2006, Apple switched to the M1 in 2020. For communications modem chips, Apple depended on Qualcomm for many years, but debuted its own modem in 2025.

Even with new form factors, Apple has usually been a latecomer. MP3 players appeared three years before the iPod; BlackBerry and Nokia preceded Apple in smartphones. Fitbit and Pebble led with smartwatches, while Bragi and Samsung introduced wireless earbuds ahead of Apple. The Apple Pencil also entered the stylus market much later than competitors.

“Borrow at first, then switch it out; enter late and win by completeness.” This track record underpins the expectations for Siri AI.

End of the Tim Cook Era, Beginning of the Turners Era…Foldables as the First Test

On the 28th of last month, when Samsung Electronics began pre-orders for the Galaxy Z8 series, citizens in Samsung Gangnam, Seocho-gu, Seoul, were exploring the new products, including the Galaxy Z Fold8 and Flip8. Photo by Samsung

Immediate hurdles remain. Apple itself has yet to decide how it will recoup the costs of running AI. Negotiations over the iPhone’s launch are ongoing with the European Union, and additional approval is needed in China.

On top of that, a leadership change is underway: Tim Cook, who has led Apple since 2011, is stepping down, and John Turners will become CEO as of September 1.

It is no coincidence that Cook, renowned for his prowess in cost and supply chain management, is leaving just as the challenges of memory supply risks are coming to the fore.

The new CEO, Turners, comes from a hardware engineering background. Since his first public debut as CEO will coincide with the launch of new foldable products, there is much anticipation over whether Apple will introduce a new device form suited for the AI era.

The researcher stated that "the Turners era faces the challenge of overcoming semiconductor supply risks akin to a once-in-a-century flood, but Apple is successfully bridging the gap between vision and reality in the AI era."

He added, “Ultimately, AI infrastructure investment will inevitably transform the device environment and consumer services, and Apple should be viewed from a long-term perspective, assuming the company will play that pivotal role.”

This content was produced with the assistance of AI translation services.