A year ago, I framed WWDC 25 as the most important in the company’s history. In fact, I said the same thing for WWDC 24 with the expectation of Apple Intelligence. All of my high bars are based on a belief that the substance of AI will exceed the hype, and Apple has been slow to get going after capitalizing on this once-in-a-lifetime opportunity.

The good news is that Apple’s customers have not been fazed by the underwhelming AI offers to date. Growth of iPhone has surged in the past four quarters, up 16% y/y compared to up 1% over the previous four years. The past year tested how loyal the iPhone base is, given sales over the past twelve months have in part been driven by the FY21 iPhone when it surged 39%. In other words, the upgrades came back in spades, an update that underscores Apple has not missed the boat when it comes to personalized AI.

That said, they have to start making progress. As a longtime investor, I’ve been stunned at the lack of AI progress to date. The hope of Apple Intelligence has deteriorated into email and text summarization, along with improved photo search.

Most important: The New Siri, which has an opportunity to change the narrative from AI follower to leader. I’m hesitant to put too much focus on a feature, but it matters. The New Siri, as described by the company over the past year, will allow AI to supercharge personal context in a secure form. That means Apple devices will have a step function improvement in everything from finding information to anticipating what we want to more effectively leveraging third-party apps that leverage automation.

On top of that, we will also see a new Siri app, a competitor to ChatGPT, Grok, and Gemini. This product has a “Search or Ask” prompt, a massive potential to rewire how Apple users find information, albeit still powered by Google, moving from visiting Google, Amazon, and ChatGPT to staying inside the Apple ecosystem.

Less important: Updates to Apple Intelligence, including AI-generated wallpapers via natural language, upgrades to Image Playground and Genmoji, natural language custom app shortcut creation, and AI writing/grammar tools, along with deeper integration into apps like Photos and Camera, are also expected. Even if Apple nails these features, improvements to Apple Intelligence don’t have the potential to change the narrative on AAPL.

Investors have been waiting for a year on the new Siri. It’s important to remember that what they show at WWDC is still work in progress. It’s been well documented that AI teams at Apple have been in flux over the past year, including doing a wholesale model change that powers Siri, from ChatGPT to Gemini.

In other words, the product is close, but more patience is needed from investors.

I expect a large portion of the keynote to be dedicated to the upcoming new iOS and macOS 27, both of which should be out in the fall. These updates are part of the normal annual update cadence, and it’s unlikely they offer a new feature that’s compelling enough to drive upgrades on its own.

The waiting over the past two years has been painful as tech investors have watched Nvidia, Meta, Google, and Tesla roll out compelling AI products. Apple is famously late to new markets and finds a way to quickly catch up. That said, AI has been moving faster than previous tech shifts, which makes the slow start feel more acute.

Objectively looking at the AI race that Apple competes in, personalized AI, there hasn’t been any Android feature that has captured consumer excitement. That day will come. In the meantime, Apple customers will remain loyal, with the base of active devices growing at a steady pace. Reported annually in January:

• 2022: 9%
• 2023: 11%
• 2024: 10%
• 2025: 7%
• 2026: 6%

Disclaimer