There is a widely circulated story about Isaac Newton: an apple fell on his head, inspiring him to discover the law of universal gravitation, thereby unveiling the curtain of classical physics.

Then, on April 27, 1900, the renowned British physicist William Thomson noted, 'The beautiful and sunny sky of the theory of dynamics is overshadowed by two dark clouds.' 'The first cloud appears in the wave theory of light,' and 'The second cloud appears in the Maxwell-Boltzmann theory of equipartition of energy.'

These are the two famous dark clouds hovering over classical physics. More than a century later, Apple faces similar clouds of uncertainty.

01. Dark Cloud 1: Slow AI Progress at Apple

Apple's first dark cloud is its slow AI progress. The theme of this year's Apple Fall Event was 'Glowtime,' but in reality, the event lacked the expected highlights.

During this year's iPhone update, Apple devoted considerable effort to promoting Apple AI, even claiming that AI ushered in a 'New Era' for the iPhone. Apple CEO Tim Cook even singled out Apple Intelligence before introducing the iPhone 16, stating that the 'new generation of iPhones is thoroughly designed for Apple Intelligence.'

However, specific details about Apple Intelligence's functions were already announced in detail at WWDC in June. Now, three months later, Apple Intelligence on the iPhone 16 has not introduced any new features, and its global rollout will take considerable time.

In summary, the AI capabilities of the iPhone 16 primarily lie in text generation, image creation, intelligent notification management, and the integration of a new Siri powered by large AI models. In terms of AI capabilities alone, the iPhone 16 is not outstanding. Its advantage lies in its tight integration with the phone, allowing users to generate greeting emails directly from their inbox without relying on third-party AI tools.

Overall, this year's Apple event was relatively subdued. As one tech blogger commented, 'Like every year, Apple delivered a 'smooth' upgrade at its highly anticipated event. Although Apple events are often likened to a tech version of the Spring Festival Gala, public anticipation and discussion have waned year after year, mirroring the situation with the actual Spring Festival Gala.'

02. Dark Cloud 2: The Unresolved Apple Tax Issue

Apple's second dark cloud is the unresolved Apple Tax issue. The so-called 'Apple Tax' is not an actual tax but refers to the revenue sharing model, where Apple takes a cut of profits from app store purchases, including game in-app purchases and virtual digital services. According to user feedback, Apple typically takes a 15% to 30% cut from app store transactions.

Recently, rumors about 'iPhone 16 may not support WeChat' and the 'Apple vs. WeChat ultimatum' circulated widely on social media. However, with the release of the latest iOS version of WeChat, these rumors dissipated, clearing up misconceptions about escalating commercial tensions between Apple and Tencent and the possibility of WeChat being removed from the App Store.

The heated debate stemmed from the potential motivations of both Apple and WeChat to take a harder stance.

For Apple, in early August, the company released its fiscal third-quarter results for fiscal year 2024 (ending June 29, 2024), showing growth in both revenue and net income. Notably, iPhone revenue declined 0.9% year-over-year to $39.296 billion, marking the second consecutive quarterly decline.

Moreover, Apple encountered significant challenges in the Chinese market. Among the five major regions, only Greater China experienced a year-over-year decline, with sales dropping 6.5% to $14.728 billion in the third fiscal quarter.

As Apple's sales in China continue to decline, the company is increasingly eyeing the revenue potential of mini-programs within the WeChat ecosystem, which represents a significant source of untapped income.

For WeChat, if the Apple Tax were to target its mini-game ecosystem, it could harm the years-long built ecosystem and the small and medium-sized developers who rely on it for their livelihoods.

Historically, tensions between WeChat and Apple surfaced as early as 2017, when WeChat closed its iOS tipping function due to Apple's 30% commission requirement. However, the issue was resolved after Tencent's CEO Pony Ma visited Apple, leading to a compromise that allowed users to send monetary gifts without Apple taking a cut, but also prohibiting third-party commissions.

Until a concrete solution is announced, no one knows if future conflicts between Apple and WeChat are inevitable.

03. Dark Cloud 3: Rising Consumer Expectations

Apple's third dark cloud is the ever-rising consumer expectations. It is increasingly difficult for manufacturers to deliver significant experience upgrades through routine updates, and Apple is no exception.

The last iPhone that impressed at first sight dates back to the iPhone X, released seven years ago. It was Apple's first phone with a notch design, marking the beginning of the full-screen revolution in the smartphone industry. Since then, iPhone updates have primarily focused on color schemes and camera layouts.

Each year, Apple strives to introduce minor but notable 'firsts' in its new iPhones. For instance, the iPhone 15 series adopted USB-C ports and supported USB 3.0 for faster data transfer. In recent years, Apple has routinely touted its 'faster, stronger, and better' A-series and M-series chips.

This philosophy of incremental but steady progress defines the Cook era at Apple. Tim Cook overturned Steve Jobs' focus on disruptive innovation, instead prioritizing supply chain security, particularly in areas like chips and displays, and maximizing operational efficiency.

Cook believes that in a rapidly evolving tech market, overly aggressive or 'one-step' innovations may seem impressive but risk being overlooked due to exceeding current market demand. His business philosophy transformed Apple's 'unpredictable' strategy of 'innovation as king' into a 'predictable' growth model. Under Cook's leadership, Apple's profitability, cost control, and revenue growth can be reliably forecasted, making the company highly attractive to investors.

04. Conclusion: Apple Needs a New Spark

Whether it's slow AI progress, rising consumer expectations, or the unresolved Apple Tax issue, they all point to one underlying problem: Apple's products are no longer as impressive or irreplaceable as they once were.

This is partly due to the dwindling innovation space in smartphones and partly because Apple's slower pace of innovation has diminished some consumers' perception of the value of its product updates. In the future, whether Apple can break through growth barriers with upcoming products like AR/VR devices will be a focal point of attention.

It can be said that Apple has once again reached a crossroads.