Apple’s embarrassing defeat could pave its way to winning everything AI has to offer

Essentially, Apple can build its own models faster and cheaper, but it can also make any product it wants and power it with a customized version of Gemini.

That solves Apple’s problem of not having its own AI technology and saves it from the cost and various challenges of developing a cutting-edge LLM. Considering that AI is not the company’s core business, that’s a fantastic outcome.

Switching to an AI platform

An even more important clue for Apple’s comeback is the rumored Extensions feature for iOS 27. That would allow users to install third-party AI apps and use them across the operating system. These extensions will allow users to use their AI agent of choice not just with Siri and its rumored new app, but also with some other features on their devices.

This is a radical change for Apple, which could turn the iPhone from a laggard into the best phone to use AI with. Allowing users to choose the model they prefer will attract even the advanced AI users who love to tinker and need deeper customization. That choice will also attract AI providers who are certainly going to support the Extensions feature and hope to win over iPhone users. Apple’s profit is guaranteed, as the company is also rumored to launch a dedicated Extensions section inside the App Store.



Such a move could solve one of the greatest challenges for the leading AI labs. While chatbots remain very popular, there are very few AI-powered products that appeal to the mass consumer. That’s making AI more of a feature inside existing apps and devices than a product on its own.

For anyone who’s not interested in using third-party AI apps, Apple will provide its Gemini-based smaller models, which are likely to be good enough for most users. Add the already great AI performance of the A-series chips to the mix, and the iPhone appears more than ready to be the perfect AI machine.

Reaping the benefits

I know those moves are not based on Apple’s ingenuity in navigating the AI space. In fact, the company failed to catch up to the leaders in the space and was forced to pivot. However, that pivot appears to be the smartest way to handle AI right now. Without bearing the giant investments that go with AI development, Apple will be able to benefit from the popularity of the technology.

There’s a chance that Apple’s strategy doesn’t work and people never use the smart Siri nor the Extensions in iOS 27. If that happens, the iPhone will simply have a bunch of unpopular features that will slowly go away with future updates. In that unlikely case, Apple won’t be hit too hard because it never made the crazy investments.

However, there’s also a chance this strategy works very well and the iPhone turns into the best consumer AI hardware on the market. Unless regulators completely crash the App Store business model, that will likely secure Apple’s next decade of market dominance.