Right now we have the incumbents Apple, Google etc, the upstarts (OpenAI, Anthropic, Grok et al) and hyper-competitive open source Chinese operators knocking on the door. It feels like a moment where all the chips (ha!) are in the air and where theyβll land no-one knows. Sure, thereβs a bit of stickiness with incumbent tech, but surely it wonβt be beyond the wit of man (or AI?) to scrape all that personal context history currently creating moats and reformat it on your new device. Perhaps that device is βphonesβ that run small local offline language models that coordinate all the other functions (calendar, search, map, email, message, content and donβt forget voice etc) and from time to time coordinating with an affiliate online large language model. Belt up. Let the rollercoaster ride beginβ¦
Probably. And there will be independent hardware suppliers who partner with βsoftwareβ operators. Iβm going to continue writing βphoneβ because Iβm not sure what the dominant form factor will be. Phone, glasses, watch/bracelet, earphone, some combinationβ¦. So much flux and uncertainty. Itβs a fascinating time!
I used to also think that Apple has missed the boat on AI, but not anymore. I now think they might just be smarter than the other large tech firms out there. Just ask yourself: which major player in AI is actually making money with it, or has a believable roadmap to do so by 2026? And by that I mean generating net income, after covering all expenses including writing down the CapEx?
As long as Google/Alphabet continues to pay Apple many billions of dollars annually for the privilege of being the default search provider for iOS devices, why should Apple worry about not having their own AI services? If you use Chrome on iOS, Gemini is there for you; if the Chrome browser doesn't rock your AI world, there are apps for that you can install (Perplexity, OpenAI, Claude...). And should Google not want to continue that relationship, Perplexity or OpenAI would likely jump at the chance and show up in Cupertino checkbooks at the ready. As for Google's Pixel devices: they are still struggling to be anything more than a tiny fraction of the smartphone market, and the latest generation is a bit of a letdown. The Pixel 10s show even less progress from the previous generation than the 17 series iPhones made vs. the 16th gen, and aren't the top devices amongst Android phones.
Fair points. I just wonder if that playbook will need to be overhauled when we look at the speed of progress. Right now, AI is not more of a patchwork solution, especially on phones. If one can tie it together well, then thatβs going to be a pretty good moat.
I've been anti-Apple since the late 1900s, when they made their computers compatible only with other Apple products, which cost 2-3x their non-Apple and often superior equivalents. Let's throw in the prediction that without Jobs at the helm, they'd lose their innovation edge... And here we are. Great article!
Great topic Kamil and well written. It's an odd situation. Google has paid Apple billions a year to stay the default search engine on iPhones, locking in its dominance while regulators look the other way. Meanwhile, Apple is pulling back ads for βApple Intelligenceβ because the features donβt actually exist yet and then looking for help with AI from Google.
Tim Cook calls their AI work βone of the most profound technologies of our lifetime,β but can we believe Tim?... When has he or Apple's team ever exaggerated anything?!
The reason this is happening is due to Appleβs own βlazinessβ at product development. I love iPhones, but the truth is that tech wise itβs always 2-3 years behind.
When it comes to hardware itβs actually sometimes a good thing as hardware can be made more efficient and the tech βleapsβ.
But with AIβ¦. Itβs is moving so fast that appleβs 2-3 years behind tech gap approach they take becomes more like a 10 year tech gap when it comes to AI.
Apple wins on polish and ecosystem. But intelligence is the new frontier. And theyβre lagging. At some point, design and hardware canβt mask an assistant that feels like a relic. Will Apple loyalty outweigh capability?
Thanks Kamil. Great article. I mainly still use ChatGPT rather than Apple AI, but for my next phone purchase I think I'll look to save money and get a new handset, as not sure I'm really using all the features I am paying for anymore...
Here's a clue. There are more and more people who are coming to realize the threat that AI can pose - while it's a useful tool it's even more useful to billionaire overlords that you shill for. I'm not sure how I got on your list but I will be removing myself post haste. Feel free to thank Curtis Yarvin, Peter Thiel, Larry Ellison and Palantir for my sour attitude on this topic.
Iβll keep my iPhone. I donβt want AI on my phone.
Real. It's so annoying
Right now we have the incumbents Apple, Google etc, the upstarts (OpenAI, Anthropic, Grok et al) and hyper-competitive open source Chinese operators knocking on the door. It feels like a moment where all the chips (ha!) are in the air and where theyβll land no-one knows. Sure, thereβs a bit of stickiness with incumbent tech, but surely it wonβt be beyond the wit of man (or AI?) to scrape all that personal context history currently creating moats and reformat it on your new device. Perhaps that device is βphonesβ that run small local offline language models that coordinate all the other functions (calendar, search, map, email, message, content and donβt forget voice etc) and from time to time coordinating with an affiliate online large language model. Belt up. Let the rollercoaster ride beginβ¦
Isnβt Musk also working on a phone?
Probably. And there will be independent hardware suppliers who partner with βsoftwareβ operators. Iβm going to continue writing βphoneβ because Iβm not sure what the dominant form factor will be. Phone, glasses, watch/bracelet, earphone, some combinationβ¦. So much flux and uncertainty. Itβs a fascinating time!
i use both! iphone is my go to for everyday cell use. itβs just way more enjoyable and (maybe only seems) faster! then when iβm sitting down doing some hard core work, i hop on my android. imessage probably got me in a chokehold though π©
I used to also think that Apple has missed the boat on AI, but not anymore. I now think they might just be smarter than the other large tech firms out there. Just ask yourself: which major player in AI is actually making money with it, or has a believable roadmap to do so by 2026? And by that I mean generating net income, after covering all expenses including writing down the CapEx?
As long as Google/Alphabet continues to pay Apple many billions of dollars annually for the privilege of being the default search provider for iOS devices, why should Apple worry about not having their own AI services? If you use Chrome on iOS, Gemini is there for you; if the Chrome browser doesn't rock your AI world, there are apps for that you can install (Perplexity, OpenAI, Claude...). And should Google not want to continue that relationship, Perplexity or OpenAI would likely jump at the chance and show up in Cupertino checkbooks at the ready. As for Google's Pixel devices: they are still struggling to be anything more than a tiny fraction of the smartphone market, and the latest generation is a bit of a letdown. The Pixel 10s show even less progress from the previous generation than the 17 series iPhones made vs. the 16th gen, and aren't the top devices amongst Android phones.
Fair points. I just wonder if that playbook will need to be overhauled when we look at the speed of progress. Right now, AI is not more of a patchwork solution, especially on phones. If one can tie it together well, then thatβs going to be a pretty good moat.
I've been anti-Apple since the late 1900s, when they made their computers compatible only with other Apple products, which cost 2-3x their non-Apple and often superior equivalents. Let's throw in the prediction that without Jobs at the helm, they'd lose their innovation edge... And here we are. Great article!
one can only imagine what Jobs would have done
Great topic Kamil and well written. It's an odd situation. Google has paid Apple billions a year to stay the default search engine on iPhones, locking in its dominance while regulators look the other way. Meanwhile, Apple is pulling back ads for βApple Intelligenceβ because the features donβt actually exist yet and then looking for help with AI from Google.
Tim Cook calls their AI work βone of the most profound technologies of our lifetime,β but can we believe Tim?... When has he or Apple's team ever exaggerated anything?!
The reason this is happening is due to Appleβs own βlazinessβ at product development. I love iPhones, but the truth is that tech wise itβs always 2-3 years behind.
When it comes to hardware itβs actually sometimes a good thing as hardware can be made more efficient and the tech βleapsβ.
But with AIβ¦. Itβs is moving so fast that appleβs 2-3 years behind tech gap approach they take becomes more like a 10 year tech gap when it comes to AI.
My thoughts exactly
Apple wins on polish and ecosystem. But intelligence is the new frontier. And theyβre lagging. At some point, design and hardware canβt mask an assistant that feels like a relic. Will Apple loyalty outweigh capability?
Iβm really split at this point
Is there a phone without AI? I'd be so down for buying it
Thanks Kamil. Great article. I mainly still use ChatGPT rather than Apple AI, but for my next phone purchase I think I'll look to save money and get a new handset, as not sure I'm really using all the features I am paying for anymore...
Here's a clue. There are more and more people who are coming to realize the threat that AI can pose - while it's a useful tool it's even more useful to billionaire overlords that you shill for. I'm not sure how I got on your list but I will be removing myself post haste. Feel free to thank Curtis Yarvin, Peter Thiel, Larry Ellison and Palantir for my sour attitude on this topic.
π π