In The Loop Episode 9 | Apple’s AI Crisis Exposed: Is It Having A Nokia Moment?

Today's episode is about a brand everyone knows—and most people love—Apple. The company that redefined how we interact with technology seems to be stumbling when it comes to AI.

It all began in 2024 when Apple announced Apple Intelligence, promising to weave AI into every device in its ecosystem. But Apple released the iPhone 16 in September 2024 instead of a groundbreaking leap forward, packed with half-built features and vague promises.

More recently, Apple execs in Cupertino admitted that their efforts with Siri were actually embarrassing, leading them to pull advertisements that promoted features that didn’t exist.

This isn’t just a PR misstep. It’s a sign that Apple could be heading down the same path as BlackBerry or Nokia—brands that failed to keep up with changing consumer expectations. But for Apple, the stakes are even higher because AI represents a fundamental shift away from its traditional strategy of crafting premium hardware and beautifully integrated software.

In today’s episode, I’ll break down exactly why this could happen—and what I’d do about it if I were Apple. This is In The Loop with Jack Houghton. Thanks for listening—I hope you enjoy it.

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Apple Intelligence: false advertising, embarrassment, and a deepening crisis

At WWDC 2024, Apple made a big splash by announcing Apple Intelligence, its branded vision for integrating AI into nearly every device. On paper, the promise was huge—an era where AI could seamlessly connect across your phone, tablet, and laptop, making everything feel like a sci-fi movie.

But the reality? Far from transformative.

The iPhone 16 launched in September 2024, supposedly built from the ground up for Apple Intelligence and running iOS 18. Yet, when it arrived, there were almost no AI features. Siri remained largely unchanged, and instead of game-changing AI integration, we got minor software updates, a beta for writing tools, and notification summaries—many of which had issues.

Then, there was Genmoji, a feature for generating new emojis, and Image Playground, which let users create cartoon-like images. Neither feature was particularly groundbreaking, and neither lived up to the hype Apple had built.

If you go on YouTube, you’ll find video after video criticizing Apple Intelligence. And despite the lack of real innovation, Apple plastered billboards worldwide, marketing it like it was the next big thing. They even released a high-profile ad—one they later had to pull. It’s worth taking a listen—it’s almost comical.

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In the ad, Bella Ramsey promotes features that don’t exist. Internal leaks suggest Apple’s marketing department was eager to generate excitement for things that weren’t ready yet. And now, Apple is facing lawsuits for false advertising.

It gets worse.

In early 2025, an internal all-hands meeting was held in Cupertino, where Apple’s Senior Director Robbie Walker bluntly admitted that their attempts to improve Siri were “ugly and embarrassing.”

This is a company known for meticulous, controlled product launches that send the world into a frenzy. And yet, Bloomberg’s Mark Gurman reports that Tim Cook has completely lost confidence in Apple’s head of AI.

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Why people should be worried about Apple?

Although these public blunders are significant, there are deeper reasons to be concerned about Apple, and I’m going to break them down.

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1. Hardware vs. software

Firstly, the hardware versus software dilemma. Apple’s strength—its long-term strategy—could actually become a weakness because hardware and software behave very differently. Let me explain.

Apple usually enters a market late, especially when products in that category are underwhelming. Then, they dominate by creating something truly exceptional. When it comes to hardware, you can afford to wait. But I’m not sure that’s an option with software- especially AI software. Software evolves quickly. It’s an iterative process: you build, learn, refine, repeat. You don’t wait years and then drop a “perfect” version.

Meanwhile, companies like Google and Microsoft are integrating AI across all their products. Apple, however, seems stuck in its old paradigm: release it late, but make it flawless. The problem is that in AI, perfection is a moving target. Now, I could be wrong—Apple might surprise us. Honestly, I hope they do. But right now, it doesn’t look promising.

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2. Vertical integrations

Another concern is Apple’s strategy around vertical integration. One of the biggest reasons people choose Apple is its seamless user experience, achieved through tight control over both hardware and software. This has allowed Apple to create truly incredible products. But that advantage is fading.

Other phone manufacturers have dramatically improved their hardware. The gap between Apple and its competitors has narrowed. Today, even though Apple’s hardware is still superior, Android devices, Windows phones, and emerging Chinese brands are producing hardware that’s really good.

Now, you could argue Apple still has a major edge: its tight integration between hardware and software. Other manufacturers rely on Android, which, as anyone who’s used an Android phone knows, can feel clunky. Apple’s strength has always been this perfect synergy, creating a polished, premium experience. And that’s a huge deal—but only in today’s paradigm.

What happens when something completely new—like large language models—changes everything? No one knows exactly how this will play out, but imagine a future where your phone no longer relies on traditional software interfaces. Instead, it’s controlled entirely by a super-intelligent, context-aware AI.

Think about it: an AI that understands what you’re doing, remembers past interactions, and can access all your apps and data without needing traditional menus or icons. If that kind of experience becomes possible, companies that nail AI could leapfrog Apple by altogether redefining how we interact with technology.

And if they do, we might see a whole new kind of device take over—the way smartphones replaced MP3 players, cameras, and PDAs.

To build this, companies will need to rethink design and user experience completely. And the reason I believe in this future so strongly is because Mindset is already working on it.

Right now, we’re launching a beta program that lets customers connect AI agents to control their entire product via conversation. Soon, I expect AI to control—and even generate—user interfaces on the fly.

What do I mean? Today, we interact with devices through touchscreens, icons, and menus. But what if AI becomes the interface? Instead of fixed screens, it could dynamically create whatever you need—a search bar, a table of information, or even an entirely new UI element—right in the moment.

If that future becomes a reality, Apple’s traditional strength—its tight grip on hardware and software—could become irrelevant.

Now, you might think I’m exaggerating. Maybe Apple is working on all of this behind the scenes. But the reason I hold them to such a high standard is because this is exactly what Apple used to do—they reimagined entire industries.

And if you’ve ever been part of a team trying to reinvent how something works, you’ll know: it’s incredibly hard. It requires a complete shift in how you think about the world. AI is going to force Apple to do this all over again.

But so far, I’ve seen no evidence that they’re up to the challenge.

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3. Lack of urgency in innovation

And that brings me to my final concern: Is Apple losing its mojo?

To understand this, let’s go back to Apple’s history. Steve Jobs was relentless—and most importantly, he was a product guy through and through. He was obsessed with creating incredible products and was involved in every detail.

He wasn’t afraid to kill off his own best-selling product if it meant paving the way for something better. Look at the iPod. When Jobs realized it would be replaced by phones, he didn’t hesitate to disrupt Apple’s most successful product line.

I’ve spent hours studying Apple’s processes, reading about Jony Ive’s design philosophies, how Jobs worked in the studio daily, and how Apple made decisions in seconds that other companies would agonize over for months. That fearlessness—that ability to completely rethink an experience—was Apple’s secret weapon.

But when I look at Apple today, I don’t see that same urgency.

Tim Cook is a brilliant operator and crucial to Apple’s success. But his cautious, measured approach might not be what Apple needs right now.

AI is moving fast. And Apple is running the risk of being left behind.

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What could Apple do to stay in the AI game

So, there are a number of reasons to be concerned about Apple. It might sound like doom and gloom, but it really isn’t—there are still exciting opportunities ahead. Here’s what I think Apple should do next.

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1. Acquire a large language model provider.

Apple needs to face a harsh reality: they are far behind in the foundational large language model (LLM) game. And that matters because many future devices will require specialized LLMs. Compared to OpenAI, Anthropic, and other leading labs, Apple lacks the talent and expertise in AI.

Apple’s strategy has always been about owning hardware and software—controlling the entire user experience. That often means building, buying, or owning every part of the process. If they want to stay competitive, acquiring an open-source LLM provider or even a company like Anthropic would be a smart move.

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2. Build an AI agent-first operating system

Apple has historically built the best operating systems—macOS, iOS—they’ve literally changed the world of technology.

But as I’ve discussed in previous episodes, multi-agent systems are the future. As AI reshapes how we interact with technology, the real opportunity lies in operating systems designed for agent-to-agent and human-to-agent collaboration.

Imagine an AI-native operating system that becomes the backbone of all AI interactions across Apple devices. Every phone, iPad, laptop, and desktop could communicate seamlessly using AI agents. Even every app on the App Store could become an agent, integrating directly with the OS.

If Apple wants to lead in AI, the OS is where they need to win.

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3. Win big in voice and wearables

The world of voice and wearables is evolving fast—and Apple has completely dropped the ball.

• The Vision Pro → Underwhelming. They’re already considering killing it.
• Meta’s Ray-Ban glasses → Arguably the first real attempt to reinvent how we access technology.
• AI-driven voice innovations → Huge leaps forward. And yet, Apple has done almost nothing.

These are consumer-first product categories—Apple’s bread and butter. They should be dominating.

Now, imagine if Apple launched AI-first wearables—smart glasses or a watch fully controlled by voice. Companies like ElevenLabs and OpenSesame have already blown me away with their AI voice models. Apple should be acquiring companies like these, integrating their technology and talent, and owning the voice AI space.

This wouldn’t even be a new strategy for Apple. They’ve done this before—acquiring touchscreen technology that eventually led to the iPhone. They should do it again.

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4. Invest in robotics (eventually)

I’m not sure Apple should jump into robotics just yet—but long-term, they have to win here.

If they get it right, they could become the central hub for intelligence and automation, just as the Mac and iPhone became the hubs for consumer technology. That’s why if I were Apple, I’d be heavily investing in R&D for robotics right now.

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Closing thoughts

So, here’s the bottom line. Apple is at a crossroads.

The missed deadlines, internal chaos, and public failures around "Apple Intelligence" might just be growing pains. Or, we could be witnessing the beginning of a slow, painful decline.

If Apple doesn’t start making big decisions—and fast—they risk becoming the next Nokia or BlackBerry.

Anyway, thanks for listening. Until next time, stay curious—and if you liked this, share it with a friend, a colleague… or even a rubber duck.

See you next week.