Apple Could Dominate the Agentic AI Market With Siri. Just Not This Siri.

Apple (AAPL +0.49%) launched a new version of Siri just last month, and it’s undoubtedly the best version of the personal agent the company has ever released. Siri can now interact like other artificial intelligence (AI) chatbots by answering more in-depth questions; it also has on-screen awareness and more personal context than before because it can search through photos, emails, and texts.

But as helpful as all of this is, just a few weeks after its launch, Siri still feels dated.

With the recent launch of Meta Platforms‘ (META -3.27%) popular Muse app, which can autonomously complete personal tasks such as booking a flight and shopping online, it’s clear that Siri still doesn’t measure up.

That’s a problem for Apple — and I think it’s one the company can solve. But there’s a lot at stake if it keeps getting agentic AI wrong.

Apple’s new threat

Most of my personal devices are Apple products, and I’ve been less than enthused by Siri for years now. The latest update was a big leap forward, but it essentially caught Apple up with where OpenAI’s ChatGPT and Anthropic’s Claude were several years ago.

And now there’s another threat.

Meta’s Muse easily helps users with all sorts of tasks, including booking flights, reserving tables at restaurants, ordering groceries, buying clothes online, and more. It’s the type of personal AI assistant that many tech companies have talked about for years, finally built into a simple app.

Muse has reached the top of Apple’s App Store and has more than 3 million weekly users. That rapid adoption is a good sign that consumers want these capabilities, and there are some important reasons Apple should take notice.

Apple’s hardware sales could be at risk

The bulk of Apple’s revenue — around 50% — comes from selling its high-margin iPhones. The margins have taken a bit of a hit recently because of soaring memory prices, but management still estimates gross margins will be around 47%.

For decades, Apple has paired high-end devices with top-notch software that consumers mostly love. But Muse and other agents could chip away at this sentiment by offering superior capabilities.

Bank of America analyst Wamsi Mohan is concerned about this threat. Mohan said in an investor note last month that Muse could cut into Apple’s services revenue by completing online transactions outside of Apple’s ecosystem.

What’s more, if more consumers view Muse as essential to their daily routines, they could shift their smartphone buying habits away from expensive iPhones and toward cheaper Android devices that run Muse just as well.

It’s still too early to tell whether that will happen, but as users grow more accustomed to highly capable AI agents, paying premium prices for Apple hardware without robust AI built in may not make sense for many smartphone buyers.

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Why Apple could still dominate agentic AI

The biggest hurdle for Muse, and Apple’s biggest advantage, is that most users don’t trust Meta with their data. A recent Oppenheimer survey found that just 8% of respondents said they trust Meta with their passwords. In contrast, 28% of respondents said they would trust Apple with their passwords.

Trust isn’t the only factor in winning the agentic AI space, but it’s a start. The next step is, of course, for Apple to design Siri to work better within third-party apps to complete autonomous tasks. The real problem for Apple isn’t the technical know-how; it may be whether Apple’s management believes the company needs to make such a leap with Siri to stay relevant.

The latest version of Siri is a step in the right direction, but as an Apple shareholder myself, I wonder how long it will be before Siri catches up to other AI agents. If Apple is in the same place it is now a year from now, after the next iteration of Siri has presumably debuted, Apple’s AI software miss could turn into a hardware sales problem.