Apple Intelligence is not shaping up to be the big business some expected, and Apple seems to know that. Instead of trying to beat ChatGPT, Gemini, or Anthropic in the AI model race, Apple appears ready to use AI more familiarly by making its devices more useful, keeping users within its ecosystem, and earning money from the hardware and services that surround those features.
Bloomberg’s Mark Gurman says Apple now sees a clearer path forward.
“Rather than engaging in an AI arms race, Apple is focusing on its core strengths: selling highly profitable hardware and making money off the services that run on it.”
That line gets to the heart of Apple’s strategy. Apple Intelligence still matters, but mainly as a support feature for the iPhone, iPad, Mac, AirPods, and future products like smart glasses and home devices. In other words, Apple wants AI to help sell devices, not become the product people pay for directly.
Apple’s real AI business model
Apple has followed this pattern for years. It builds software that makes its hardware easier to buy and harder to leave. That is why services like iMessage, Photos, Maps, and FaceTime matter so much, even when they are not the strongest product in their category. AI now seems headed in the same direction.
Gurman also reports that Apple is preparing deeper third-party AI integration, including a future Siri experience that can work with outside chatbot services. That matters because it creates room for Apple to profit from AI apps and subscriptions through the App Store, where it still takes a commission. That is a far more believable revenue stream than trying to convince people to pay for Siri itself.
The real money still comes from iPhone sales, Mac upgrades, wearables, and services tied to those products. Apple can package “good enough” AI into the experience, keep users loyal, and then collect revenue from hardware margins, subscriptions, and App Store purchases. That is a very Apple answer to the AI shift, and right now it looks far more realistic than turning Apple Intelligence into a standalone cash machine.
I agree with Gurman, but Touch Mac will be a big difference and turn the whole industry upside down.
Why?
It will make any product that is non-touch obsolete overnight. It applies even to Apple. it will be interesting to see how Apple handles it.