Siri's Sorry State Blinds Apple Customers to Greatness Elsewhere

On Friday, Apple (AAPL) found itself in an unfamiliar spot. The stock turned negative for the year and became the worst performer in the Dow Industrials.

The stock still earns a solid "B" ("Buy") Weiss Rating. And it's still up about 50% from where I first recommended it to my subscribers. That's even with Friday's 4% slide amid a Morgan Stanley price target reduction and speculation that the company may soon kill off its highest-priced iPhone X.

The iPhone X was considered to be groundbreaking. In many ways, it was. But even if you're addicted to your iPhone or MacBook — or the stock's double- and even triple-digit yearly returns — I think you might agree with my "controversial" opinion that there are bigger innovators out there right now than Apple.

In fact, I might also venture to say that the iPhone is the reason why we can't imagine self-driving cars ...

That's because we don't seem to mind that the user experience has barely changed since 2011.

For most people in developed countries, the iPhone represents the very pinnacle of technology innovation. Yet, it is not progressing at all.

No wonder most us of can't imagine self-driving cars, "Star Trek" medical devices of or any of the other gadgets futurists promise are just around the corner.

Seven years ago, Apple introduced Siri, an artificially intelligent digital assistant. The software was supposed to be a big leap forward in the way humans interacted with devices. Sort of like Hal 9000 in "A Space Odyssey," minus the sociopathy.

"Hey Siri, your voice has gotten more-human but why do I never seem to have enough storage and battery life?"

Siri began as a beta product, with plenty of rough edges. All these years later, the application is still terrible.

Same goes for battery life. Despite all the software optimizations and improvements in silicon, it is still hard to walk past an electrical outlet without a tinge of panic. Will your phone last the full day without a recharge?

And why is it so difficult to manage storage, and applications?

In fairness, other companies are bringing innovation to smartphones ...

Google Assistant, the contextually aware AI found on Android devices, is much better than Siri at everything. Machine learning is making it better every day. Photos, music and other digital files are stored in the cloud by default.

And the Huawei P20 looks and feels like an iPhone but the battery lasts for two full days before it needs more juice. No more wallflowering near electrical outlets.

I'm not ranting against Apple. The company makes terrific hardware. Its customers are fiercely loyal. The company earns, and re-earns, their business earned with top-notch gadgets.

Record iPhone demand helped drive Apple shares 46% higher in 2017. Click image for a larger view

Also, it's in the company's interest to roll out innovations slowly. Apple's primary business is selling new iPhones. It's hard to argue with its success.

My point is, investors need to look past their beloved screens, and see what is really happening.

You can start by watching this company ...

The 'Eyes' Have It

Recently, the Food and Drug Administration approved a device from IDx LLC, an Iowa startup. The health sciences company uses photographs and AI to diagnose eye disease.

The twist is this device does not require a specialist to interpret the data. After the photos are fed into the IDx-DR device, algorithms make a clinical decision. The device is fully autonomous, just like a "Star Trek" gadget.

Apart from the nerdy cool factor, the IDx-DR could democratize medicine in profound new ways by eliminating the need for a specialist.

In many smaller communities, this means primary-care physicians will be able to administer the tests, helping more patients.

I have been telling my members to not lose sight of what is happening ...

Although you might not see the progress made on iPhones, it is still happening throughout the tech world. And it's happening quickly.

This progression is the investment opportunity of our lifetime. It will produce new, high-growth business models and innovative products that will create tremendous shareholder wealth.

And these things are just around the corner.

Best wishes,
Jon D. Markman