Apple's Most Popular Device Gets an AI Overhaul
Apple's (AAPL) troubled artificial-intelligence ("AI") strategy just hit a turning point...
Two years ago, Apple teased a beefed-up Siri voice assistant at its Worldwide Developers Conference.
Apple announced it would give Siri a major AI upgrade powered by ChatGPT. The company promised a Siri with many exciting new features. To take advantage of them, users would need to own an iPhone 15 Pro or iPhone 16.
Folks bought the AI-enabled devices... but Siri's new features failed to appear. In March 2025, customers sued Apple over false advertising.
Apple admitted no wrongdoing, but it agreed to a settlement anyway. The company will pay $250 million in damages to customers who bought the iPhone 15 Pro or iPhone 16. Plaintiffs will be paid $25 to $95 per device.
In short, Apple's first steps into AI disappointed users. But its AI strategy is about to change...
Soon, one of Apple's most popular products may get a massive AI makeover. And it could be the first in a new category of AI products...
This Tech Giant Is Betting on 'Ambient AI'
To date, AI wearables have been a graveyard of disappointing tech.
You may have heard of the Rabbit r1, a tiny voice-controlled computer that lets users talk to ChatGPT. Reviewers panned the device as no better than your average smartphone.
Then there was the Humane AI Pin, a voice-operated AI assistant and cell phone that could clip to your shirt. The product began shipping in April 2024. But after poor reviews, safety concerns, and high return rates, the AI Pin was discontinued.
Most AI wearables so far have been flops. But they're part of a new product category that isn't going away... called ambient AI.
Unlike prompt-based AI, ambient AI is "always on." It runs in the background using cameras and sensors. It can see environments and act without human commands.
And today, Apple is throwing its hat into the ring...
According to Bloomberg, Apple is developing new AirPods earbuds with cameras built in.
These cameras aren't for photos. They capture visual information and stream it to Siri. In turn, users can get answers from Siri by simply asking their AirPods about what they're seeing.
For instance, you might ask your voice assistant what ingredients are in the salad you're about to eat... Or it might give you directions as you walk down the street, responding in real time to the landmarks around you.
Of course, this product will require the improved Siri that Apple promised in 2024. The upgraded assistant is expected to debut this fall.
Ambient AI devices aren't a huge category – yet. But by marrying this technology to AirPods, Apple is making a big bet on the future of this market.
What's more, the new AirPods would line up with a "changing of the guard" at Apple. CEO Tim Cook will step down from the company this September. His replacement, John Ternus, currently serves as Apple's senior vice president of Hardware Engineering.
Importantly, Ternus isn't just any hardware executive. He oversaw development of the original AirPods – plus various models of the iPhone, iPad, and MacBook.
This shift feels like a message to investors. Apple is handing the keys over to the man who designs its devices. It's not a stretch to think that under Ternus, Apple could have its eye on dominating the AI hardware market.
Apple hasn't matched the parabolic gains of other AI companies since 2022. Still, its stock is at an all-time high today. With changing leadership and a bold new strategy in sight, Apple is setting up to become a pillar in the AI-hardware trade.
Good investing,
Sean Michael Cummings
Editor's note: For years, we've been transitioning into the age of AI... from a world that relies on human expertise to a society where machines can do it faster and cheaper. Meanwhile, AI stocks have generated decades' worth of returns. And now, our firm has developed its own way to harness the power of AI – a system that finds the unique combination of stocks most likely to double or triple your money.
Further Reading
Most folks wish they could've spotted stocks like Apple before they went parabolic. These kinds of moonshots share one trait in common... So if you know what to look for, you can spot the next one before a sell-off hands you a prime buying opportunity.
"AI agents are bringing a new era of computing in 2026," Sean writes. In the world's technology-driven future, AI will take charge of our digital lives. And as users "hand over the keys" of digital control, the companies making this technology safer and more efficient will be set up to profit.
Market Notes
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NEW HIGHS OF NOTE LAST WEEK
Apple (AAPL)... Big Tech
Alphabet (GOOGL)... tech "World Dominator"
Advanced Micro Devices (AMD)... semiconductors
Analog Devices (ADI)... semiconductors
Microchip Technology (MCHP)... semiconductors
Intel (INTC)... chipmaker
Micron Technology (MU)... chipmaker
Flex (FLEX)... electronics manufacturer
F5 (FFIV)... cloud technology
Akamai Technologies (AKAM)... cloud services
Dell Technologies (DELL)... laptops and PCs
Riot Platforms (RIOT)... video games
CVS Health (CVS)... drugstores and vaccines
Lamar Advertising (LAMR)... billboards
Corning (GLW)... smartphone glass
Teck Resources (TECK)... mining
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Brown & Brown (BRO)... insurance
Abbott Laboratories (ABT)... health care giant
Boston Scientific (BSX)... medical devices
CDW (CDW)... information technology
McDonald's (MCD)... burgers and fries
Pilgrim's Pride (PPC)... poultry
Leidos (LDOS)... defense contractor