AI Strategy Lessons from Apple’s Siri Pivot: When First-Mover Advantage Isn’t Enough

If you noticed over the past couple of years that Apple has been largely absent from the Generative AI race, then you are not alone. Apple has been struggling to find its footing and recently announced after years of promises and delays that they were shifting strategy. Instead of creating their own core models they are partnering with Google.

It is a billion-dollar decision that did not come lightly after a brief agreement with OpenAI . The choice to use Google’s Gemini to power Apple’s next generation Siri assistant is both a relief for anxious iPhone users and more importantly a relevant lesson in first-to-market leadership and strategy.

Taking the Lead

When Siri was introduced on the iPhone 4s in 2011, it was a breathtaking innovation. A conversational assistant that could give you the weather, the news, or a restaurant review simply by asking. Your voice was your keyboard. It simplified search and could even tell you a joke (how can we not recall the great John Malkovich commercial!). Siri, which briefly was a standalone app before Apple acquired and integrated it into the iPhone, changed how we interact with our devices. Siri became indispensable and exclusive, it was the reason to buy an iPhone.

Voice recognition was not new technology, but Apple’s approach with Siri made it an innovation so important that it was a “must have” that other phone makers had to follow. Blackberry Assistant and Cortana for Microsoft Phones launched in 2014. By 2016 Google developed their own Google Assistant into the Android phone operating system. Amazon Alexa began showing up in our homes offering the same convenience. Everyone was trying to follow Apple as fast as possible. Apple was known for its cutting-edge innovations and was a market leader, at least until the AI era started.

Although they were not first-to-market, they demonstrated how a laggard could come to dominate a product space.

Ironically, it was Apple who also taught us another strategy leadership lesson in an earlier example. Before the iPhone there was iPod, but Apple was not the first MP3 music player. Although they were not first-to-market, they demonstrated how a laggard could come to dominate a product space. Being first in the market can be a tremendous advantage. As your competitors work to keep up, those early wins can create loyal customers and give a market leader room to continue to innovate. The task is to continue to innovate and stay ahead of the competition. Strategy and execution both matter and the reward for being “first” becomes a footnote with rapidly developing technology, like Generative AI.

Changing Course with Generative AI

The Siri’s competition had caught up around 2019 and by the time OpenAI introduced ChatGPT in 2022 it faced a new type of competitor in Generative AI. The long-promised improvements to create Apple Intelligence and integrate with Siri become too much as we have witnessed during the past few years. Could Apple rebuild the underlying Siri infrastructure? Could they develop their own large language model (LLM)? Would it be any good or suffer the hallucinations that plagued early versions of ChatGPT, and Claude which are now in their 5th generation. Once this far behind, when do you change strategy, from innovate to survival mode?

The evolution of Siri and Apple’s innovation mindset provides us with a few useful observations:

• Innovation becomes more difficult when you already have an existing product. Concerns about backwards capabilities, previously set expectations, and a culture of ‘this is the way we always do it’ can shutter new ideas and urgency. This gets more emphasis when the existing product is good, but not great. It is good enough to keep justifying the current strategy.
• Innovating a new product works best when there is only one product. Think about Tesla, NVidia, and OpenAI. When there is only one goal, one possible success, one priority, then everything can be more focused.
• Laggards sometimes have the advantage of observing what works and what does not and can choose to invest in proven strategies. The current hasty investments in AI will be the learnings for the competitors that follow.
• Market First innovation proves you have the right ideas and the right people. Success builds confidence, but is it sustainable?

As we watch the Generative AI industry grow, we might wonder about the parallels to those that are currently leading it. As OpenAI, Anthropic, and others mature beyond their first-to-market advantage, will they maintain their lead, or will they face their own Siri moment?

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