Apple Loses Ground to Meta's Muse AI Agent Despite Strong iPhone Demand

Bank of America (BofA) analysts view Apple as an eventual winner in the AI at the edge market, but note that the company may lose discovery referrals despite maintaining its role in device sales. This risk arises from Meta's new AI agent, Muse, which has become a top free app on iOS and attracted 2.5 million downloads in just two weeks.

Muse is described as a personal AI assistant capable of handling tasks such as sending emails, booking travel, and making purchases, effectively taking actions between users and services on their devices. BofA's note highlights the potential for third-party agents to sit between users and the products they access through their devices.

In contrast, Apple has been expanding its own AI capabilities with the launch of Siri AI this month. Despite these developments, analysts at Morgan Stanley reported relatively healthy demand for Apple's latest premium iPhones, with 14 days after pre-orders opened showing global iPhone 18 Pro and Pro Max lead times remaining broadly flat year over year despite an 18% increase in premium builds.

This suggests that Apple's momentum in its core business remains strong. The company's fiscal third-quarter revenue rose 16% year-over-year to $109.4 billion, with records for iPhone and Services revenue reported in the June quarter.