Siri

An Office Hours question asked by Roger S., June 9, 2026.

Q: Beyond selling more capable hardware — phones, Macs, iPads — is there real monetization in all of this AI?

Absolutely. They gave us an architecture: it’s about intent, about orchestration, about routing a request through multiple models and input types, and then deciding whether it goes through an app or back to Siri. Where’s the money? My answer is: follow the compute.

If this works on-device, the user is happy buying the device, with the memory it needs, and Apple bundles all of that into the purchase price. Developers still sell their apps, but they’re not selling extra compute. But if a result requires heavy computation in the cloud, through an app, then trace it: who sends you the bill? That invoice comes from somewhere. If it’s a developer or a model supplier, it isn’t free — they’ll ask you to subscribe to get the answer, priced as a fixed fee or variable. Apple gets its usual commission, thirty percent or fifteen, somewhere in between.ssss

If Siri depends on services that don’t go through an app, then Siri charges back through iCloud for the compute. So all they’ve really done is take the exact same business model — Services with subscriptions — and either fold compute into existing subscriptions or add new ones. Apple gets the same distribution commission it always has. Nothing changes. In fact, the absence of any commentary from Apple about new economics is, to me, a tacit acknowledgment that nothing different is needed.

That means the App Store, and if anything economically interesting happens, you’ll see another kink in its trajectory — the way we saw a kink when subscriptions became dominant. To users, it’s invisible. Maybe the monthly services bill rises ten percent; maybe they add a couple of subscriptions and drop one. It all reflects in Services, at a 72%+ gross margin, with a hardware uptick alongside. I reckon it’s a ten-year cycle before half of the Apple base are AI active daily, paying something for it. Developers will just see more of the same, only bigger.

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Editor’s Note: This was one of the questions asked by participants in Asymco’s June 2026 Office Hours live Q&A session, open to Asymco One subscribers.

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Recording and transcript of the June 9, 2026 Asymco One Office Hours, recorded the day after Apple's WWDC 2026 keynote. Horace Dediu shares his impressions of the event and takes questions from Asymco One subscribers.

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Transcript

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The end of apps? Not so fast.

The traditional computing "stack" is usually portrayed as a layered cake where the base is silicon, on top of which are system-level interfaces, followed by the operating system, then core services, and finally applications. The User interacts with the applications only. This is an app-based ecosystem which exposes "tools" for users to use as they try to accomplish tasks. This ecosystem for Apple is approaching $2 Trillion/yr in economic transactional value.

The diagram above, introduced as the new Apple Intelligence architecture, is quite different. The user is connecting using various devices via various input methods (image, voice, text) to prompt an orchestrator to tap various knowledge bases (local and remote) to initiate either Siri or an App to act on some intent.

The role of the operating system is now that of "orchestrator' that connects inputs to knowledge and decides how best to fulfill an intent. It sometimes connects to a chatbot (Siri) but also initiates apps to act.

This might be seen as moving from an app based ecosystem to an intent centric world. For the original Siri, queries were usually routed to apps (calendar, weather, stopwatch, music, etc.) In this new world Siri AI will resolve the intent directly and have the ability to construct & deconstruct interfaces / experiences on demand. There are many tasks that do not need third party applications.

However, the diagram still shows Apps as equal to Siri in terms of Systemwide Experiences. Apple announced a Foundation Models framework and expanded App Intents. Intent-centrism doesn't deprecate apps. It transforms them them from intent destinations to callable functions.

Using the nomenclature of integration/modularization and business model evolution, it modularizes what was integrated, subtly shifting the locus of value. The App Store becomes an API directory. That's a business model shift. Classic innovation theory suggests that as the value chain evolves, some profit will evaporate from one point and condense in another point in the chain; usually wherever the new point of modularization has been injected.

The old points of concentrations were the OS (where Apple captured profit) and the Apps (where developers did.) The new points might be in the orchestrator and in the foundation models.

But I don't think it's that simple.

Models might be commodities and orchestrators are not much different than OSs. Intent action requires access to private app data. bank accounts, calendars, messages. Authentication is an app responsibility and thus earned trust. Every app removed or disintermediated becomes a permission the orchestrator needs. Would banking credentials be granted directly to the device/OS? Much peril lurks there. This local data is where app control lies.

Where the threat for apps lies is in the possible loss of user interaction. It's also a great part of the cost of development. Shifting from a point of contact with the customer to a callable function comes with costs and benefits that are not easily predictable.

Transitioning the OS from a layer between hardware and applications to a layer between foundation models and experiences fundamentally shifts the architecture, but, in the case of Apple, it preserves its value as the agent of trust and discovery.

For this the value created and captured remains and perhaps increases.

It's clear to me that Apple has engineered this quite carefully and thoroughly.

Don't confuse efficiency and effectiveness

Apple has cumulatively shipped over 450 million Apple Intelligence-capable iPhones till Q1 2026.

Apple has the largest number of smartphones with consumers which are capable of GenAI as compared to any other brand.

At WWDC ‘26, Apple needs to deliver a revamped Siri showcasing practical use cases, making a strong statement.

Although iPhone sales remain strong, competition is already moving ahead in terms of AI, and Apple must be ready to follow since Agentic AI has the potential to redefine the smartphone industry.

Source: Counterpoint Research

NB: Words like "needs", "must", "follow" contrast with minimal evidence of demand.

Effectiveness is a number. Efficiency is a ratio. No bank has ever accepted a ratio as a deposit. Counterpoint continues: "Although the lack of a more fully AI-featured Siri…

AI or bust

Citi reiterated a Buy rating and a $315 price target on the stock in a research note. The nod of approval comes ahead of Apple’s week-long Worldwide Developers Conference, which begins June 8.

Analysts believe the headline at next week’s conference will be Apple’s long-overdue revamp of its digital assistant, Siri. Citi expects a new Siri app to resemble something like OpenAI’s ChatGPT chatbot while also serving as an AI assistant across applications on Apple’s operating systems.

“Siri will handle multi-step requests, understand personal data, analyze on-screen content, generate emails or messages using both web and device context, and surface rich card-based results for everything from news to calendar data, while also completing actions across apps and shortcuts,” predicted Citi analyst Atif Malik.

Apple will pair that overhaul with deeper AI integration across its Mac, iPad, and iPhone operating systems, Citi said. Examples could include more AI features in writing, search, and photo editing.

“Edge AI has not yet taken off, but its long-term potential is substantial as consumers and enterprises increasingly prioritize low-latency, privacy-preserving, and cost-efficient AI experiences over cloud dependence,” Malik wrote. “We believe a meaningfully upgraded Siri will be a key to unlock the potential.”

Strong demand for the Mac Mini, which can run AI agents like OpenClaw, shows how edge AI is already spurring more hardware sales. Extend that demand across phones and tablets, and Apple could be an edge AI winner.

Source: Yahoo Finance

NB: In other news, Apple Plans iPhone Bill Splitting Shares up 2.95% reaching the $315 target…

AI or bust

Morgan Stanley analyst Erik Woodring believes Apple’s upcoming Worldwide Developers Conference could begin to change that perception. The 5-star analyst reiterated his Overweight rating and $330 price target, arguing that a successful AI strategy could unlock a higher valuation for Apple stock, with a bull-case scenario reaching as high as $440 per share.

He noted that Apple’s recent strength has been driven by its products and services business rather than AI. However, companies viewed as “AI winners” have often earned higher valuations over the past two years, and Woodring believes Apple could soon be seen as one of them.

Why WWDC Could Be a Turning Point for Apple

Woodring believes Apple now has more of the tools needed to compete in AI. He pointed to Google’s Gemini models supporting Apple Foundation Models, Apple’s strong focus on privacy, and what appears to be a renewed push around Siri and Apple Intelligence.
Unlike many of its rivals, Apple is not spending heavily on building AI infrastructure. Instead, the company can use its massive base of iPhone, iPad, and Mac users to bring new AI features to consumers. That approach could help Apple grow its AI offerings without the huge costs faced by some competitors.

The analyst also sees an opportunity for Apple to help ease some of the industry’s AI capacity constraints. A more capable Siri and improved Apple Intelligence platform could bring AI tools to millions of users through Apple’s existing ecosystem.

For investors, the bigger story may be valuation. Woodring believes that if WWDC shows a clear path for Apple’s AI plans, the stock could earn a higher multiple. In that scenario, he sees shares reaching $365 to $385, with a bull-case valuation of as much as $440.

Source: TipRanks Financial

NB: Not much new here but a $330 target is not much above the $315 high recently reached. Perhaps this is his foreshadowing of upgrades post WWDC…

The company “may be on the brink of some real AI sizzle.”

Reitzes said people are becoming more comfortable using voice commands, and Apple could benefit from this shift as technology becomes more voice-driven.

Reitzes also said the upgraded Siri could become a standalone tool that many Apple users rely on, even instead of apps like OpenAI’s ChatGPT. He described it as an “agent-style interface” that could make the Apple ecosystem more unique and spark fresh excitement among developers.

Additionally, he highlighted that no other consumer tech company has both parts of that system under one trusted setup. He added that this advantage will become even clearer—and more valuable—as AI systems get more complex and start acting more independently.

Overall, he expects Apple to post about $613 billion in revenue by fiscal 2028.

Source: TipRanks Financial

NB: Latest analyst targets are shown with Melius' stepping up. Analysts are coming round.

This upgrade follows Bank of America boosting its price target to $380 a share.

“In an agentic world, value accrues to the platform that controls user intent, personal context, app access, permissions, identity, authentication, payments, and trust,” said BofA’s senior equity research analyst Wamsi Mohan. 

“Smartphone is the scaled consumer device where these factors already converge,” he added. “If AI assistants become the new front door…we think Apple should have meaningful leverage over model providers, app developers, merchants, advertisers, and payment networks.”

An agentic version of Siri could boost 2030 revenue by as much as $65 billion, Wamsi and his team estimated, adding up to $2 billion in incremental earnings over the next four years.

Reitzes sees the new Apple Siri as a stand-alone app that has the potential to replace ChatGPT for Apple's 2.5 billion installed devices, while proving to be “an agentic interface that can further differentiate the Apple ecosystem and ignite a level of excitement with developers not seen since the early days of the App store.”

But it’s also likely to establish Apple as the leader in consumer-use AI.

“If agentic AI shifts the market from answering questions to taking actions, the critical control point becomes centered around owning the endpoint,” Wamsi said. “Apple does not need to own the best frontier model if it owns the trusted interface that routes intent across local models, Apple-controlled cloud models, external models, and app actions.”

Reitzes at Melius sees that shift, which he describes as a “shot in the arm” for Apple’s app store, driving “a massive new product cycle that keeps iPhone growth going.”

He’s also observing that Apple’s architecture, with on-device models handling lighter workloads and its private cloud taking on the larger ones, makes it unique.

“No other consumer technology company has both legs of that architecture under a single trust model, and we think that gap becomes more visible, and more valuable, as agentic complexity scales,” he said. 

“Agentic AI is a structural tailwind that will force consumers to get the latest and greatest Apple device because it will work better than other brands.”

Upgrades keep coming but are they justified?

Bank of America upped its price target on the tech giant, citing a potential boost from agentic artificial intelligence.

Shares rose 0.5% in premarket trading.

“In an agentic world, value accrues to the platform that controls user intent, personal context, app access, permissions, identity, authentication, payments, and trust,” analyst Wamsi Mohan wrote in a note to clients. “Smartphone is the scaled consumer device where these factors already converge. If AI assistants become the new front door to search, apps, commerce, scheduling, payments, and workflow completion, we think Apple should have meaningful leverage over model providers, app developers, merchants, advertisers, and payment networks.”

Mohan raised his price target to $380 from $330 and reiterated his Buy rating on Apple.
Delving deeper, Mohan said that the company's benefit in agentic AI comes from its semiconductors and iOS, as Apple's silicon can dictate what happens on a devices (which is important for latency, reliability, privacy and costs) and iOS will determine how the AI is used by the user. “Our analysis around token usage suggests Apple will need to rely on distributed compute (on device), Private Cloud Compute and third-party compute to deliver a robust AI experience,” Mohan added. “Removing the net cash neutral target, in our opinion, is a reflection of a new period of AI-driven investments to enable this agentic era.”

As such, Mohan believes that the coming Siri redesign needs to be integrated into the iPhone and make it an agent that is capable of understanding intent, retrieving context, bringing up apps, and completing workflows. If this were to happen, an agentic version of Siri could boost fiscal 2030 revenue between $15B and $30B, or as much as $40B to $65B if users really became acclimated to it.

Source: Seeking Alpha

NB: Updated price targets with BofA change highlighted.

AI makes the strong stronger. That is the opposite of disruption.

The iPhone appears stronger than ever despite Apple’s AI struggles, and that’s not a coincidence, says Perplexity CEO Aravind Srinivas.

Speaking on the latest episode of the This Week in AI podcast, Srinivas indicated that the iPhone only stands to benefit from continual AI improvement.

"Here’s my opinion. I haven’t said this before. The phone, the iPhone is actually not getting disrupted by AI at all. In fact, the more AI works better, the iPhone essentially becomes your digital passport."

Perplexity’s CEO touts Apple’s ecosystem and silicon advantages as some of the reasons why the iPhone is positioned for continued success. It’s also, in his view, why Apple can afford to move slow with its long-delayed Siri overhaul.

"My sense is that even though a lot of people have opinions on how bad Siri is or good Siri is, [Apple has] the ability to take time and do things they want to do, because they have advantages as a brand that people truly trust. The ecosystem lock-in is underrated. Auxiliary hardware devices, the chip advantage, all of this is really underrated right now.
Srinivas also mentions how the iPhone is central to people’s lives for many reasons that have nothing to do with AI."

He says, “It has your wallet, it has all your cards, it has your passes, it has your health records, you connect with other human beings through it, you do FaceTimes, you do calls, you have photos of precious moments in your life.” All of these are extremely personal, and as a result, users won’t easily switch away from iPhone.

Source: 9to5Mac

NB: Knowing the theory of disruption provides a three year lead in decision making. The observation...

3500 users surveyed

In surveying roughly 3,500 smartphone users, the average monthly spend of a user has increased to around $13, up from the three-year average of roughly $9, “driven by broader application adoption and mix shift toward higher-value offerings,” analyst Amit Daryanani said. 

Delving deeper, the survey indicated that roughly 63% of respondents now have AppleCare or Apple One, up from the three-year average of 44%. Apple Pay usage has increased as well, as roughly 40% of respondents said they use it, compared to roughly 30% for the three-year average. Other services also saw increases when compared to the three-year average, including iCloud (only 15% have no usage, down from the three-year average of 24%, while 28% say they now have 2 TB worth of storage, up from roughly 11%); Apple Music (roughly 61% compared to approximately 44%); and Apple TV, which roughly 54% of respondents said they used, compared to the three-year average of about 34%. 

Additionally, Apple TV (formerly known as Apple TV+) is now the second most watched streaming service in the survey, surpassing Amazon Prime Video, Daryanani said.
Aside from Apple's paid services, the survey indicated that Apple Intelligence is seeing some traction, though it was described as “muted.” 

“Upgrade intent remained muted, with ~44% of users indicating willingness to upgrade for AI features, a ~2pt decline from our prior survey,” Daryanani added. “We think users are underappreciating the potential of Apple Intelligence 2.0 and 'AI Siri,' particularly as new capabilities are rolled out later this year, which will include Gemini model integration. Importantly, we see early signs of monetization, with underlying demand for premium features, as ~61% of respondents indicated willingness to pay for a personalized 'AI Siri' subscription.”

Source: Seeking Alpha

NB: The AppleCare number is interesting.…

Bonfire of the Tech Vanities

But consider an alternative reading. The foundation model market is beginning to exhibit classic signs of commoditisation. When one company introduces agentic capabilities, the others follow within months. Benchmark leadership changes constantly, with no provider establishing a durable lead. Prices are collapsing: Anthropic recently cut prices by 67%, Google has slashed rates by 70%-80%, and OpenAI has repeatedly reduced costs on successive models. This is textbook commodity market behaviour.

If foundation models are heading toward commodity status, then the strategic value shifts to whoever controls the integration layer and the user relationship. Apple has 2.4 billion active devices. It has the most valuable distribution channel in technology. And its recent moves suggest a deliberate strategy: rather than building frontier models, source them from whoever is best at any given moment.

This is precisely what Apple has done. It partnered with OpenAI in 2024, then switched to Google’s Gemini to power the next generation of Siri. The company is not building the engine; it is curating the best available engine at any given moment, wrapping it in Apple’s privacy architecture, and integrating it across the ecosystem. Own the experience, outsource the commodity.

Source: stocks.apple.com