[LOS ANGELES] Apple chief executive officer Tim Cook, holding a rare all-hands meeting following earnings results, rallied employees around the company’s artificial intelligence (AI) prospects and an “amazing” pipeline of products.
The executive gathered staff at Apple’s on-campus auditorium on Friday (Aug 1) in Cupertino, California, telling them that the AI revolution is “as big or bigger” as the internet, smartphones, cloud computing and apps. “Apple must do this. Apple will do this. This is sort of ours to grab,” Cook told employees, according to people aware of the meeting. “We will make the investment to do it.”
The iPhone maker has been late to AI, debuting Apple Intelligence months after OpenAI, Alphabet’s Google, Microsoft and others flooded the market with products such as ChatGPT. And when Apple finally released its AI tools, they fell flat.
But Cook struck an optimistic tone, noting that Apple is typically late to promising new technologies.
“We have rarely been first,” the executive told staffers. “There was a PC before the Mac; there was a smartphone before the iPhone; there were many tablets before the iPad; there was an MP3 player before iPod.”
But Apple invented the “modern” versions of those product categories, he said. “This is how I feel about AI.”
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An Apple spokesperson declined to comment on the gathering.
The hourlong meeting addressed a range of topics, including the retirement of operating chief Jeff Williams, increasing Apple TV+ viewership and advances in health care with features such as the AirPods Pro hearing-aid technology. It also touched on donations and community service by Apple employees, the company’s goal to become carbon neutral by 2030, and the impact of regulations.
“The reality is that Big Tech is under a lot of scrutiny around the world,” Cook said. “We need to continue to push on the intention of the regulation and get them to offer that up, instead of these things that destroy the user experience and user privacy and security.”
Cook often holds town hall-style chats when visiting Apple’s offices around the world, but companywide meetings from the Steve Jobs Theatre at headquarters are unusual.
The remarks followed a blockbuster earnings report, with sales growing nearly 10 per cent during the June quarter. That beat Wall Street expectations and eased concerns about iPhone demand and a slowdown in China.
Apple still faces myriad challenges, including Trump administration tariffs and a regulatory crackdown on its business practices. The company said on Thursday that tariffs would bring a US$1.1 billion headwind this quarter, though Apple was upbeat about sales growth. It also said that App Store revenue rose by a percentage in the double digits last quarter, despite efforts in the EU and elsewhere to further restrict that business.
Echoing comments he made during the earnings conference call, Cook told employees the company is investing in AI in a “big way”. He said 12,000 workers were hired in the last year, with 40 per cent of the new hires joining in research and development roles.
Apple’s chip development efforts, led by executive Johny Srouji, are key to the company’s AI strategy, Cook said. Apple is working on a more powerful cloud-computing chip, code-named Baltra, to power AI features, Bloomberg News has reported. It’s also setting up a new AI server manufacturing facility in Houston.
The meeting included Craig Federighi, senior vice-president of software engineering, who discussed the future of Apple’s Siri voice assistant. The company had planned to roll out a Siri overhaul as part of Apple Intelligence earlier this year, adding the ability to tap into user data to better fulfil requests. It was delayed, spurring management changes for the company’s AI work.
Federighi explained that the problem was caused by trying to roll out a version of Siri that merged two different systems: one for handling current commands, such as setting timers, and another based on large language models, the software behind generative AI. “We initially wanted to do a hybrid architecture, but we realised that approach wasn’t going to get us to Apple quality,” Federighi said.
Now, Apple is working on a version of Siri that moves to an entirely new architecture for all of its capabilities. That iteration is slated for as early as spring, Bloomberg News has reported, though Apple executives have not confirmed a timeline other than a release next year.
“The work we have done on this end-to-end revamp of Siri has given us the results we needed,” the engineering executive told employees. “This has put us in a position to not just deliver what we announced, but to deliver a much bigger upgrade than we envisioned. There is no project people are taking more seriously.”
Federighi cited leadership changes, including putting Vision Pro creator Mike Rockwell and his headset software leadership team in charge of Siri, as a driving force in improving the product. He said Rockwell and his group have “supercharged” the company’s work in the area.
In his speech, Cook also pushed employees to move more quickly to weave AI into their work and future products.
“All of us are using AI in a significant way already, and we must use it as a company as well,” Cook said. “To not do so would be to be left behind, and we can’t do that.”
Employees should push to deploy AI tools faster, and urge their managers and service and support teams to do the same, he said.
Cook also addressed the company’s retail strategy, stressing that the current plan is to focus on opening new stores in emerging markets and upping the investment in Apple’s online store. The iPhone maker is opening outlets in India, the United Arab Emirates and China this year, and is preparing to add its first location in Saudi Arabia next year.
“We need to be in more countries, and you will see us go into more emerging markets in particular,” Cook said. That doesn’t mean Apple will ignore other places, he said, but a “disproportionate amount of growth” will be in new areas.
The CEO also shared his enthusiasm about upcoming products, though he did not get specific. “I have never felt so much excitement and so much energy before as right now,” he said.
Bloomberg News has previously reported that Apple plans to launch its first foldable iPhone next year and is also working on a stream of smart home devices. New headset products, smart glasses, a push into robotics and a redesigned iPhone for the two-decade anniversary are also underway.
“The product pipeline, which I can’t talk about: It’s amazing, guys. It’s amazing,” Cook said. “Some of it you will see soon, some of it will come later, but there’s a lot to see.” BLOOMBERG
