> Apple pays for materials and chips before it sells the finished product to consumers. Nothing is pre-paid.
The AI-capabilities of the devices will be pre-paid, as they will come with the product without delivering any significant value yet.
The end-user will bear the cost for that before he is getting anything meaningful in return, because Apple's production volume is at such a scale that they can offset those investments without risking to lose any meaningful sales volume.
Other players can't do that because they don't sell 200mn units per year. If they would add on-device inference chips, they would have to significantly increase the device-price, risking to not sell any product
That's not "prepaid", that's just normal building of hardware. And Apple's AI hardware is pretty general-purpose -- it's already widely used for things like dictation, image recognition, all sorts of stuff. Sure they've upgraded their "neural engine" into a "neural accelerator" to optimize it more for LLM's, but that's still incremental.
What Apple is also doing is investing server-side, just like everybody else, precisely because phones can't handle the serious stuff:
The AI-capabilities of the devices will be pre-paid, as they will come with the product without delivering any significant value yet. The end-user will bear the cost for that before he is getting anything meaningful in return, because Apple's production volume is at such a scale that they can offset those investments without risking to lose any meaningful sales volume.
Other players can't do that because they don't sell 200mn units per year. If they would add on-device inference chips, they would have to significantly increase the device-price, risking to not sell any product