Assuming that Apple take 30% rev-share from other AI-service providers on their AI-marketplace, once they are ready they can easily offer a lower pricing than anyone else and still retain a higher profit-margin.
But for this to make economic sense, the "AI-bubble" may need to burst first, forcing the competitors to actually provide their services for-profit.
Until then it might be more profitable to just forward AI-tasks to OpenAI and others and let them burn more money.
> once they are ready they can easily offer a lower pricing than anyone else
Do you have any evidence whatsoever that could back-up this claim? It feels like you're just saying this because you want it to be true, not because you have any concrete proof that Apple can sell competitive inference.
> Do you have any evidence whatsoever that could back-up this claim? It feels like you're just saying this because you want it to be true, not because you have any concrete proof that Apple can sell competitive inference.
Sorry, I didn't mean to state that Apple A/M-series will be competitive on inference performance compared to other solutions. There is no sufficient data for this at the moment. But this is not the competition I expect to happen.
I expect them to stiffle competition and setting themselves up as the primary player in the Apple ecosystem for AI services, simply because they are making "Apple Intelligence" an ecosystem orchestration layer (and thus themselves the gatekeeper).
1. They made a deal with OpenAI to close Apple's competitive gap on consumer AI, allowing users to upgrade to paid ChatGPT subscriptions from within the iOS menu. OpenAI has to pay at least (!) the usual revenue share for this, but considering that Apple integrated them directly into iOS I'm sure OpenAI has to pay MORE than that. (also supported by the fact that OpenAI doesn't allow users to upgrade to the 200USD PRO tier using this path, but only the 20USD Plus tier) [1]
2. Apple's integration is set up to collect data from this AI digital market they created: Their legal text for the initial release with OpenAI already states that all requests sent to ChatGPT are first evaluated by "Apple Intelligence & Siri" and "your request is analyzed to determine whether ChatGPT might have useful results" [2]. This architecture requires(!) them to not only collect and analyze data about the type of requests, but also gives them first-right-to-refuse for all tasks.
3. Developers are "encouraged" to integrate Apple Intelligence right into their apps [3]. This will have AI-tasks first evaluated by Apple
4. Apple has confirmed that they are interested to enable other AI-providers using the same path [4]
--> Apple will be the gatekeeper to decide whether they can fulfill a task by themselves or offer the user to hand it off to a 3rd party service provider.
--> Apple will be in control of the "Neural Engine" on the device, and I expect them to use it to run inference models they created based on statistics of step#2 above
--> I expect that AI orchestration, including training those models and distributing/maintaining them on the devices will be a significant part of Apple's AI strategy. This could cover alot of text and image processing and already significantly reduce their datacenter cost for cloud-based AI-services. For the remaining, more compute-intensive AI-services they will be able to closely monitor (via above step#2) when it will be most economic to in-source a service instead of "just" getting revenue-share for it (via above step#1).
But for this to make economic sense, the "AI-bubble" may need to burst first, forcing the competitors to actually provide their services for-profit.
Until then it might be more profitable to just forward AI-tasks to OpenAI and others and let them burn more money.