The Great AI Divide: Apple’s Hardware Prowess vs. Software Lag

Apple’s 2025 keynote was a perfect illustration of the great divide in its current innovation strategy. On one hand, the company demonstrated its undisputed mastery of hardware engineering with the stunning 5.6mm iPhone Air. On the other, its silence on significant AI progress underscored a growing and concerning software lag.
The physical products are exceptional. The iPhone Air’s titanium body is a tactile triumph. The new dual-filming mode is a clever camera enhancement. The AirPods Pro 3 are more comfortable and functional. The Apple Watch 11 is a more capable health device. Apple’s ability to design, manufacture, and polish physical objects remains second to none.
However, the intelligence powering these devices feels a generation behind. The promised Siri overhaul remains a distant “next year” goal. “Apple Intelligence” was a footnote, not a headline. This is happening while competitors are embedding generative AI so deeply into their operating systems that it’s becoming a core part of the user experience.
This creates a strange dichotomy for the consumer: you can buy the best-built smartphone on the market, but it won’t be the smartest. Apple is betting that its superior hardware, design, and ecosystem integration can compensate for its deficit in the AI race. How long that bet remains viable is the most critical question facing the company today.