Apple Intelligence hype cost the company $250M

Almost two years later, that smarter Siri still hasn’t shipped — and while Apple has made major changes in management, AI strategy, and approach, this contextual companion isn’t now expected until later this year. Hopefully. Apple Intelligence can be seen as a Maps-launch style debacle on the part of the company. (Apple even had to deny that the video presentation for those features shown at WWDC 2024 (no longer officially available) was made up.) Apple Intelligence’s 250M punishment The entire affair left some iPhone users unhappy, so they launched a class action lawsuit against the company for delaying introduction of the “more personalized Siri.” Apple agreed to pay 250 million to settle the case last December – a figure that works out to between 25 and 95 per device, depending on how many iPhone customers submit claims. (Compensation is available to US customers who purchased an iPhone 15 Pro, 15 Pro Max or the iPhone 16 family of devices between June 2024 and March 2025.) The case against the company claimed it “Promoted AI capabilities that did not exist at the time, do not exist, and will not exist for two or more years.” To make matters worse, Apple pushed these new features after their introduction at WWDC — even linking a later iPhone update to its AI. Looking back now, this wasn’t a great idea since it made things much more embarrassing once Apple failed to deliver. That’s why the class action succeeded. Don’t promise too much The lesson here is that, in general, even a snake oil salesman needs to kill a couple of snakes before putting the essence in a bottle; in this case, the snake hadn’t yet been located. Apple has not admitted any wrongdoing as part of the settlement, saying it acted in “good faith” and “reasonably” thought it had complied with all applicable rules and regulations. Apple now appears committed to a new partner-based strategy in which it builds the very best hardware on which to run AI, allowing users to choose whichever brand of AI they want to use on-device. At the same time, Apple is focused on building Apple Intelligence as a viable alternative. This will take time, but Apple will no doubt press ahead until it gets Apple Intelligence right. In a statement, the company told 9to5Mac: “Since the launch of Apple Intelligence, we have introduced dozens of features across many languages that are integrated across Apple’s platforms, relevant to what users do every day, and built with privacy protections at every step.” The plot thickens (intelligently) That statement also stressed Apple’s continued focus on building those Apple Intelligence features. You could see that claim as an inevitable reaction to the criticism the company faces. I prefer to see it as confirmation that Apple has adopted the AI+ strategy, (best hardware and a choice of AI, including its own increasingly competitive Apple Intelligence brand). During last week’s earnings call, Apple CEO Tim Cook described the sheer importance of AI to its ecosystem. “What truly sets Apple apart is how Apple Intelligence is woven into the core of our platforms, powered by Apple Silicon, and designed from the ground up to deliver intelligence that is fast, personal, and private,” he said. “This is not AI as a standalone feature, but AI as an essential intuitive part of the experience across our devices.” More importantly, in the long run, Apple believes that by providing the best development platform it can also attract the AI developers and services it needs on which to build its future. I think this approach will succeed. Still, as the class action settlement shows, the original introduction of Apple Intelligence may enter the history books as a classic case of hype over substance. Under internal and external pressure to regain the initiative in AI development, the company abandoned its usual conservative approach to making big claims, in which it tends to under-promise then over-deliver. Customers like nice surprises more than they enjoy empty promises; Apple usually knows that. You can follow me on social media! Join me on BlueSky, LinkedIn, and Mastodon.