The iPhone mini was a commercial flop. The sales numbers were bad. It only accounted for about 3–5% of total iPhone sales. And the product didn't make sense from a business standpoint: it required specialized/miniaturized hardware, took more engineering work than other models to design, cost more to manufacture than a regular iPhone, but had to be sold for less.
From an engineering standpoint, it was the most impressive iPhone Apple had ever made, but that fact doesn't translate to sales numbers.
There's a very vocal group of people online saying they want smaller phones, who make it sound like there's massive untapped demand for these phones, but when you actually give it to them, it turns out they're just a tiny slice of the market.
I’m a huge fan of small iPhones and only recently replaced it with a standard size model. I pretty much hate it for all the reasons I expected.
But when I looked up the sales numbers for all of the smaller phone versions I had to admit I must be pretty far outside the normal buyer. The market really spoke on this.
We'll always wonder if the iPhone Mini would still be around if Apple positioned and priced it as a specialty premium device, like the iPad Mini, instead of a worse mainstream iPhone.
I thought I’d love my iPhone mini for these same reasons.
It turns out that the reachable nature of it wasn’t really that much of a benefit compared to the downsides: short battery life (going from the 12 mini to 13 mini helped, barely), small text/interface (my eyes literally started hurting), reduced area to see content while typing, compromised cameras compared to the Pro models.
Add a $30 PopSocket to your phone and all the problems with a bigger phone are resolved.
Aka 6million units. During the same period when the Pixel sold 10 million.
So every ipad , watch, mac sku that sells < 5% of the overall product line is immediately taken out back to the wood shed?
I guess, but when my iPhone is no longer supported, I’m migrating my entire family on to something else. 3 watches, 3 ipads and 2 phones…so its not always about the % sold.
The logical screen size was the same as the iPhone 11 Pro (375x812), so the iPhone mini didn’t add a new display size, and everything rendered exactly the same as on the 11 Pro (which itself was merely a vertical extension of the earlier iPhone Plus resolution). The display is rendered internally at the 11 Pro’s physical resolution (1125x2436) and then downscaled to the mini’s physical resolution (1080x2340). Similar internal downscaling had already been done on the earlier iPhone Plus models, so also nothing new. The 11 Pro is still supported by current iOS, same as the mini.
It was, to the contrary, the non-mini iPhone 12 that introduced a new resolution and required adjustments.
> on the software side it must have been at least a non-zero pain to deal with
Compared to the iPhone Duo now in the lineup? And the iPhone Air was announced with some pride from the Apple hardware team for its special miniaturized hardware.
There may not be a market for an iPhone Mini-sized device when looking at the buyers, but the custom hardware and tweaks to software aren't a clear consideration for Apple when you look at their behavior with other products.
By “pain” I mean “providing an acceptable experience” more than “needing to make different scaled apps.”
I think with the iPhone Duo you at least have a larger screen that the user can utilize. On the iPhone mini the screen was as big as it was going to get.
If the experience of using a specific app is bad, the user can open the phone.
But those few extra grands of revenue at the cost of millions in design and inventory to support that product
Not to mention, at the price apple is selling their 27 inch display, i am doubtful anyone buying them want to make do with the base M chip. But if not the base chip, that will add even more inventory cost
Mac revenue being up 24% vs last year makes me think that users have figured out that they can just plug a Mac Mini into the monitor they already have.
They would not, they would make less on Studio Displays and Mac Studios and Mac Minis, the decision not to do is product segmentation because they hate us customers and want to maximise revenue :-/
My grandmother with a 2015 27" iMac and a 2017 12" Macbook just replaced both devices with a 13" Macbook Air and a 27" Dell USB-C monitor. She would have preferred buying a MacBook Air + a 27" iMac, but Apple stubbornly refuses to make one for some reason. The studio display has an A19 chip in it already (more powerful than a MacBook neo!) why not just make it run MacOS?
Yeah. I mean, I guess I could go out of my way to make it work, but I'm halfway being nostalgic. Why cant they just keep doing the same form factor?? Anyway. Im on linux these days, I get gaming too thanks to Gabe, so i cant complain... but if there was ever a 27" imac, I'd put my money were my mouth is.
It may be a break-glass-in-case-of-slumping-sales-numbers option, the same way VW brought out a 4Motion Golf wagon (with a manual[!] with an LSD[!]) in NA after Dieselgate.
If iOS games are any indication then an Apple console would have 100x the low-effort microtransaction slopware as PS and Xbox. I think we’re better off without it.
And what does “hardware and performance is there” mean? The latest Apple TV 4K has an A19 chip, same as the base iPhone 17. What console market are they eating alive with that exactly?
i dont think thats what they menat. If Apple went full on with their series and movies content, winning awards left and right, rightfully so, then expectation here is they would release their own, exclusive game titles.
Unfortunately that’s the nature of the mobile marketplace, it’s mostly trash. The same is rapidly taking over PC and to a lesser extent console games, but fortunately the review/visibility systems in place are far more developed.
Well and the consumer is usually a bit more developed as well.
You underestimated the difficulty of barging into a fully saturated market with mature ecosystems and overestimated console grade games. Mobile microtransaction games are the true giants, no matter how much we deny it.
They did try once (well, as hard as Apple can allow itself to try with their pervasive disdain for both gaming and third party developers) when they launched the AppleTV 4K - they were advertising the motion controls and they sent out a bunch of free AppleTVs to developers.
Correct. And the fact that Apple has been raked over the coals for years about it, yet people, even on HN, don't know that the rest are doing it, really makes me question people's motives.
People can and do write apps for iOS. So a lot of people hit the issue, and some complain loudly.
Most people don't write apps/games for gaming consoles. Those who do already knew the deal they were getting into.
It's sad that one can be a victim of one's own success. Not saying we should feel bad Apple (or any tech giant for that matter) but the idea of justice and fairness when administered by public sentiment is a funny thing...
To be fair it kind of remains to be seen how successful all of those are, long-term (I kind of expect Microsoft to exit the hardware console business at this point).
What is "long term" to you? Playstation is more than 30 years old and Xbox is more than 25 years old. Steam is over 20 years old and PC gaming hugely pre-dates that. How long do they have to exist before you'll accept they are successful products?
Fair, maybe "long term" wasn't the right choice of words, I meant more like "indefinitely"? But I guess that's not really fair either since nothing lasts forever.
Apple sells 2 TB upgrade to Mac Studio for almost as much as whole Playstation 5 Pro that has 2 TB of storage.
With pricing model that Apple insists on, their console would be laughing stock in terms of storage. (Switch 2 has 256 GB only but it's a) portable, b) has slot for sd express cards.)
I work on Mac's every day. The device I use most is my AppleTV - music streaming, background noise, etc. It's a passive thing but the first device the last couple of times I've moved.
Still an open question whether not investing in AI infrastructure was the right move. They did better than Alphabet, Amazon and Intel, but Apple renting its AI from Alphabet (Gemini with Siri) might be a long term risk, since they're building on someone else's platform.
It’s not a long term risk at all. Long term, models are going to be running on local hardware.
The AI data center is analogous to the mainframe.
If I can run Qwen 3.8 Flash Next on my DDR4 closet server with a $500 16GB GPU at 50 tok/s (which I can) then I just about guarantee you that in 2-3 years a pretty acceptable AI model is going to be running off of iPhones and M7/M8 Macs.
The other option that reduces Apple’s long-term risk is that they could just buy an AI company.
Yeah I can kinda see why Altman is out there trying to shame the public for having compute. The longer they carry those massive debt obligations, the more the models are going to economize.
It would not be surprising that Apple just waits and snatches their compute up from insolvent companies sliding past.
Models running locally doesn’t benefit Apple unless they have a competitive model of their own. Otherwise they’ll end up being dependent on Google, Meta etc the same way they are today for apps and services. And getting out of that hole won’t be as simple as building a maps app.
In return for Google getting a discount on how much they pay Apple to be the default search engine in Safari, Apple currently has the right to distill Google's Gemini server models to create their own models that fit on-device.
> Apple is cutting down Google Gemini's massive models into smaller and more secure parts through distillation, to create elements that are more suited to on-device Apple Intelligence processing.
I think it does if their chips are the only ones that run the models well on phones and competitors need to charge customers more money or give away less functionality for free.
There is exactly zero chance Apple lets open, unconstrained models run on iPhones when they get powerful enough. We are talking about a company that doesn’t allow apps that contain bad words. People holding out hope for this are delusional.
That’s not what I’m saying. They could take an open model, create their own variation of it, then embed that on devices. Just like they have with their OS.
I equate it to partnering with AT&T on the first iPhone. Very inconsistent with Apple’s preference of owning the entire stack, but if your bet is this a short term stop gap until the market is more “unlocked” - less of an issue, and better to get the direct market learnings along the way.
> I equate it to partnering with AT&T on the first iPhone.
In terms of strategy, they picked the underdog carrier (Cingular) specifically to avoid having to bundle bloatware and carrier customization at the cost of exclusivity. Likewise, when Apple brought the iPhone to Japan, they did the same thing with the underdog carrier here, SoftBank.
The strategic importance of this was as a bargaining chip with other carriers and fundamentally gave them a lot of control they would not have had if they had gone with Verizon or similar.
Context for Europeans: the US mobile market was basically total vendor lock-in hell up until the mid-2010s. There were only two carriers (AT&T and T-Mobile[1]) you could bring-your-own-phone with, the other two (Verizon and Sprint[2]) only allowed the phones they sold on their network. Phone service and plans were bundled together.
In fact, one of the critical arguments Apple made as to why they weren't a monopoly was "Sure, we demand 30% - but the phone company monopoly we made obsolete used to charge 70%!" Mobile app stores on other platforms were absolutely hell.
One extra wrinkle of this is that Apple didn't actually partner with AT&T, they partnered with Cingular, the smallest national[0] carrier, who only agreed to let Apple ship an unmolested device because they got 5 year exclusivity. Then Cingular got bought out by AT&T. AFAIK AT&T didn't want the iPhone, they wanted the AT&T (insert terrible name here) Powered by AppleTM, with like 20 AT&T services preinstalled and unremovable. 'Cause that's literally what happened with the first Samsung Galaxy phone, every carrier gave it a different name and their own bloatware.
And yes, this hatred was mutual: the 5 year exclusivity meant iPhones were shackled to a terrible network in the US, and there was a significant amount of effort put into baseband jailbreaking just so people could violate Apple's exclusivity agreement and use their iPhone with their choice of carrier - which, to be clear, meant "use it on T-Mobile".
Also, while I'm giving a lot of credit to Apple, the thing that really broke the vendor lock-in was:
1. Google deliberately bidding up spectrum to trigger an FCC open-access pledge on LTE bands, which forced Verizon to allow third-party networks
2. Qualcomm giving up on UMB, forcing Verizon to adopt LTE, and by extension, SIM cards[3]
3. Clearwire / Sprint's WiMAX service totally failing, also forcing Sprint to adopt LTE and SIMs
[0] The US has a few "regional" carriers like US Cellular that only operate towers in some markets and license spectrum outside of that area.
[1] Yes, they were owned by Deutsche Telekom at one point
[2] At one point owned by Softbank, now owned by T-Mobile
[3] Strictly speaking, the SIM card spec includes CDMA/3GPP2[4] support, but the largest CDMA market was the US, and any carrier that wanted to support foreign phones used GSM/3GPP track standards
[4] Yes, Qualcomm was really that petty that they named their 3G standards body "3G 2"
> Strictly speaking, the SIM card spec includes CDMA/3GPP2
I think the only market that had R-UIM cards (CDMA SIM cards) was Japan, but even with those you couldn't use non-carrier phones since they had all the configuration hard-coded into the devices. It did allow roaming abroad by putting your card into a foreign GSM phone you'd rent at the airport.
They're not building on someone else's platform as much as leasing completely commoditized compute from whomever gave them the best deal. I wouldn't be surprised if this compute will actually be happening on xAI hardware [1].
> but Apple renting its AI from Alphabet (Gemini with Siri) might be a long term risk, since they're building on someone else's platform.
Apple isn't renting; they distilled Gemini to create their own model for "broad world knowledge". Some of this runs on Google's infrastructure because Apple didn't have enough compute.
All of the personal context stuff is Apple's Foundation Models.
Apple is always not-going to have enough compute of their own, they have billions of users and whatever they are investing in datacenters to service them is negligible.
That said renting storage from Google for iCloud reportedly carries an ~80% profit margin, there's no reason they can't also put a 5x markup on what Google charges them for PCC and Siri since they can still prevent rivals from providing the same service in most markets.
What has apple really lost not investing billions in AI? IMO nothing. At any point they could just buy or partner with any missing piece. Google is the safe bet for Siri but this could be any number of providers in the future at which one of them might even pay apple like google does for search in safari. Apple needs to tackle component costs to increase revenue, especially memory which they have to start thinking about their own fab long term.
I think this will depend on the commoditization, or lack thereof, of the AI models. If they are more or less interchangeable, Apple will have made the right bet.
Apple's AI infrastructure is a hub device like AppleTV, Mac Mini, iMac, or MacBook connected to iPhone and Watch. They will be the first to benefit from cheaper to run, eventually embed in chip models, and are positioned to be a key player in offloading demand from data centers.
They’re the bridge to the frontier models until iPhone 21 ships with then modern frontier model baked into Apple Silicon.
Uh huh 20 years ago everyone denied the use case of the cloud ...grey beards that are all dead now would never allow their cherished benefactor small business owners private data be stored in a homogeneous data center... heard it all every decade when the state management semantics change with the generations of tech bro butt in seats
I am sure this time the Ruby and Terraform script kiddies will hold back progress just like all those BSD admins staved off Linux like they promised to do on Slashdot 30 years ago
Now that this site has no social moat to boast from the other side of, how out of touch yall are is ridiculously obvious
Glad I went with applied physics, electronic and computer engineering degrees. Will take hands on skill setting up experimental research of propagation of information through various physical materials at various power levels over skill in copy paste of ultimately meaningless syntax.
Instead of feeling insulted, you should just refute me. Why are ASICs a desirable alternative to GPU/NPU inference here?
The "baked-in" weight technology you are describing uses enormous amounts of memory. There is not enough SRAM or flash ROM in the world to put a "modern frontier model" on every iPhone, even if you quantized it to 1 bit. It is scarce and expensive, and we are in a global shortage of memory and flash storage.
If we lived in a world where Cerebras, Taalas and Groq could dethrone Nvidia, they would have done it years ago. Turns out, cutting architectural corners has consequences, and they're extremely offputting for the majority of inference providers.
Apple rarely updates prices on existing products, outside of price drops on previous-generation iPhones. It was a big deal when they raised prices on everything a few months ago in response to RAM costs.
It took me a while to realize, but Yahoo charts was showing 3% up from Jun 30 to Nov 2. Turns out there was a huge drop on day 1, so where you start counting _really_ matters!
Wait, we shouldn’t be basing our investment decisions today on data from the past and projections from people with a vested interest in the stock going up?
Apple's fiscal year more or less matches the US federal FY. It's not exact because the federal FY is 1 October - 30 September, where Apple's ends on the last Saturday of September so there's a bit of float on the starting date.
This is a crazy big number. I think the problem for them now is how people are going to be able to afford to keep buying their products in the age of AI job replacement? They'll have to massively increase their prices and become more of a luxury product and manufacture fewer units with bigger margins.
It's always been easier for Apple to grow down market than it is for its competitors to grow up market. Apple is also quite happy to cannibalize its sales as long as it's the one doing it. See the MacBook Neo as an example.
They say this in every earnings release to emphasize that they have a diversified revenue stream beyond just iPhone, but if you dig into analyst estimates the “services revenue” is mostly AppleCare (purchased for iPhone), App Store purchases (for iPhone) and iCloud storage (purchased for iPhone). There’s a reason they don’t break it down in their earnings report.
One thing I can tell about Apple is they could make at least a few extra grand in any quarter if they were to bring back the 27' iMac
Same for the iPhone mini. ;)
The iPhone mini was a commercial flop. The sales numbers were bad. It only accounted for about 3–5% of total iPhone sales. And the product didn't make sense from a business standpoint: it required specialized/miniaturized hardware, took more engineering work than other models to design, cost more to manufacture than a regular iPhone, but had to be sold for less.
From an engineering standpoint, it was the most impressive iPhone Apple had ever made, but that fact doesn't translate to sales numbers.
There's a very vocal group of people online saying they want smaller phones, who make it sound like there's massive untapped demand for these phones, but when you actually give it to them, it turns out they're just a tiny slice of the market.
I’m a huge fan of small iPhones and only recently replaced it with a standard size model. I pretty much hate it for all the reasons I expected.
But when I looked up the sales numbers for all of the smaller phone versions I had to admit I must be pretty far outside the normal buyer. The market really spoke on this.
We'll always wonder if the iPhone Mini would still be around if Apple positioned and priced it as a specialty premium device, like the iPad Mini, instead of a worse mainstream iPhone.
I thought I’d love my iPhone mini for these same reasons.
It turns out that the reachable nature of it wasn’t really that much of a benefit compared to the downsides: short battery life (going from the 12 mini to 13 mini helped, barely), small text/interface (my eyes literally started hurting), reduced area to see content while typing, compromised cameras compared to the Pro models.
Add a $30 PopSocket to your phone and all the problems with a bigger phone are resolved.
The iPhone mini competed with a $30 accessory.
Aka 6million units. During the same period when the Pixel sold 10 million.
So every ipad , watch, mac sku that sells < 5% of the overall product line is immediately taken out back to the wood shed?
I guess, but when my iPhone is no longer supported, I’m migrating my entire family on to something else. 3 watches, 3 ipads and 2 phones…so its not always about the % sold.
“Something else”
> it required specialized/miniaturized hardware
Looking at the earlier smaller iPhones and the budget SE line, at least the “miniaturized” part isn’t very convincing.
Not just special miniaturized hardware, on the software side it must have been at least a non-zero pain to deal with.
The logical screen size was the same as the iPhone 11 Pro (375x812), so the iPhone mini didn’t add a new display size, and everything rendered exactly the same as on the 11 Pro (which itself was merely a vertical extension of the earlier iPhone Plus resolution). The display is rendered internally at the 11 Pro’s physical resolution (1125x2436) and then downscaled to the mini’s physical resolution (1080x2340). Similar internal downscaling had already been done on the earlier iPhone Plus models, so also nothing new. The 11 Pro is still supported by current iOS, same as the mini.
It was, to the contrary, the non-mini iPhone 12 that introduced a new resolution and required adjustments.
https://iosref.com/res
> on the software side it must have been at least a non-zero pain to deal with
Compared to the iPhone Duo now in the lineup? And the iPhone Air was announced with some pride from the Apple hardware team for its special miniaturized hardware.
There may not be a market for an iPhone Mini-sized device when looking at the buyers, but the custom hardware and tweaks to software aren't a clear consideration for Apple when you look at their behavior with other products.
By “pain” I mean “providing an acceptable experience” more than “needing to make different scaled apps.”
I think with the iPhone Duo you at least have a larger screen that the user can utilize. On the iPhone mini the screen was as big as it was going to get.
If the experience of using a specific app is bad, the user can open the phone.
[flagged]
Just buy iPhone Duo and keep it closed. Same size as mini and incredible battery life.
But those few extra grands of revenue at the cost of millions in design and inventory to support that product
Not to mention, at the price apple is selling their 27 inch display, i am doubtful anyone buying them want to make do with the base M chip. But if not the base chip, that will add even more inventory cost
Mac revenue being up 24% vs last year makes me think that users have figured out that they can just plug a Mac Mini into the monitor they already have.
They would not, they would make less on Studio Displays and Mac Studios and Mac Minis, the decision not to do is product segmentation because they hate us customers and want to maximise revenue :-/
My grandmother with a 2015 27" iMac and a 2017 12" Macbook just replaced both devices with a 13" Macbook Air and a 27" Dell USB-C monitor. She would have preferred buying a MacBook Air + a 27" iMac, but Apple stubbornly refuses to make one for some reason. The studio display has an A19 chip in it already (more powerful than a MacBook neo!) why not just make it run MacOS?
Yeah. I mean, I guess I could go out of my way to make it work, but I'm halfway being nostalgic. Why cant they just keep doing the same form factor?? Anyway. Im on linux these days, I get gaming too thanks to Gabe, so i cant complain... but if there was ever a 27" imac, I'd put my money were my mouth is.
It may be a break-glass-in-case-of-slumping-sales-numbers option, the same way VW brought out a 4Motion Golf wagon (with a manual[!] with an LSD[!]) in NA after Dieselgate.
I see no point in buying a Mac Studio. I would buy a 27" iMac. I would definitely buy a 35" iMac.
I might as well just get some Asus and whatever fancy monitor I can afford (that's not a Mac Studio) if it just has to be a tangle of hardware.
I borked my cherished 2019 trying to embiggen its CPU.
So I bought one of those spiffy Studio Display units in anticipation of the Mac Mini refresh.
But my strategy didn't account for local LLM mania.
I'll be postponing my purchase so long as used Mac Minis, if you can find one, remain as (or more) expensive as a new one.
Apple could eat the console market alive with the Apple TV. The hardware and performance is there but they don’t seem to care about it.
If iOS games are any indication then an Apple console would have 100x the low-effort microtransaction slopware as PS and Xbox. I think we’re better off without it.
And what does “hardware and performance is there” mean? The latest Apple TV 4K has an A19 chip, same as the base iPhone 17. What console market are they eating alive with that exactly?
i dont think thats what they menat. If Apple went full on with their series and movies content, winning awards left and right, rightfully so, then expectation here is they would release their own, exclusive game titles.
Unfortunately that’s the nature of the mobile marketplace, it’s mostly trash. The same is rapidly taking over PC and to a lesser extent console games, but fortunately the review/visibility systems in place are far more developed.
Well and the consumer is usually a bit more developed as well.
You underestimated the difficulty of barging into a fully saturated market with mature ecosystems and overestimated console grade games. Mobile microtransaction games are the true giants, no matter how much we deny it.
They did try once (well, as hard as Apple can allow itself to try with their pervasive disdain for both gaming and third party developers) when they launched the AppleTV 4K - they were advertising the motion controls and they sent out a bunch of free AppleTVs to developers.
You fool! They created their own market on mobile worth 10x the console market (probably more)
(you fool should be read in the voice of Gilbert Gottfried)
Gilbert Gottfried or Wallace Shawn?
https://youtu.be/W5rzk_X_WhQ
Eating the console market means building business relations with game publishers, in competition with existing consoles and market places like Steam.
Apple was never good at that, and looking at their track record with the gaming industry, will probably never be.
I don’t think a successful console can take a 30% cut and I don’t think Apple is really interested in anything less.
Playstation, Xbox, and Steam charge 30%.
Correct. And the fact that Apple has been raked over the coals for years about it, yet people, even on HN, don't know that the rest are doing it, really makes me question people's motives.
It's just a matter of perception.
People can and do write apps for iOS. So a lot of people hit the issue, and some complain loudly.
Most people don't write apps/games for gaming consoles. Those who do already knew the deal they were getting into.
It's sad that one can be a victim of one's own success. Not saying we should feel bad Apple (or any tech giant for that matter) but the idea of justice and fairness when administered by public sentiment is a funny thing...
To be fair it kind of remains to be seen how successful all of those are, long-term (I kind of expect Microsoft to exit the hardware console business at this point).
The Switch is also 30%. Unless you contend no console will be successful.
I guess we'll see if RAM prices come down any time soon. At current price increase rates I think no console stands a chance in the next few years.
What is "long term" to you? Playstation is more than 30 years old and Xbox is more than 25 years old. Steam is over 20 years old and PC gaming hugely pre-dates that. How long do they have to exist before you'll accept they are successful products?
Fair, maybe "long term" wasn't the right choice of words, I meant more like "indefinitely"? But I guess that's not really fair either since nothing lasts forever.
Not to mention the potential if they gave it decent storage and included a game controller.
Apple sells 2 TB upgrade to Mac Studio for almost as much as whole Playstation 5 Pro that has 2 TB of storage.
With pricing model that Apple insists on, their console would be laughing stock in terms of storage. (Switch 2 has 256 GB only but it's a) portable, b) has slot for sd express cards.)
I work on Mac's every day. The device I use most is my AppleTV - music streaming, background noise, etc. It's a passive thing but the first device the last couple of times I've moved.
Still an open question whether not investing in AI infrastructure was the right move. They did better than Alphabet, Amazon and Intel, but Apple renting its AI from Alphabet (Gemini with Siri) might be a long term risk, since they're building on someone else's platform.
It’s not a long term risk at all. Long term, models are going to be running on local hardware.
The AI data center is analogous to the mainframe.
If I can run Qwen 3.8 Flash Next on my DDR4 closet server with a $500 16GB GPU at 50 tok/s (which I can) then I just about guarantee you that in 2-3 years a pretty acceptable AI model is going to be running off of iPhones and M7/M8 Macs.
The other option that reduces Apple’s long-term risk is that they could just buy an AI company.
Yeah I can kinda see why Altman is out there trying to shame the public for having compute. The longer they carry those massive debt obligations, the more the models are going to economize.
It would not be surprising that Apple just waits and snatches their compute up from insolvent companies sliding past.
Models running locally doesn’t benefit Apple unless they have a competitive model of their own. Otherwise they’ll end up being dependent on Google, Meta etc the same way they are today for apps and services. And getting out of that hole won’t be as simple as building a maps app.
In return for Google getting a discount on how much they pay Apple to be the default search engine in Safari, Apple currently has the right to distill Google's Gemini server models to create their own models that fit on-device.
> Apple is cutting down Google Gemini's massive models into smaller and more secure parts through distillation, to create elements that are more suited to on-device Apple Intelligence processing.
https://appleinsider.com/articles/26/03/25/apple-is-distilli...
I think it does if their chips are the only ones that run the models well on phones and competitors need to charge customers more money or give away less functionality for free.
Or open models become competitive as a base? Apple have an entire OS based on OpenStep and FreeBSD after all.
There is exactly zero chance Apple lets open, unconstrained models run on iPhones when they get powerful enough. We are talking about a company that doesn’t allow apps that contain bad words. People holding out hope for this are delusional.
The on-device models that Apple distilled from Google's server based models are already available to developers to use in their apps at no cost.
We're in a time where devices are becoming more capable and developers are figuring out how to do on-device inference using less resources.
The companies that spent a fortune on AI data centers might as well have built a huge pyre of money for all the "moat" they built with it.
That’s not what I’m saying. They could take an open model, create their own variation of it, then embed that on devices. Just like they have with their OS.
How much would it cost to license one? Probably less than renting servers.
I equate it to partnering with AT&T on the first iPhone. Very inconsistent with Apple’s preference of owning the entire stack, but if your bet is this a short term stop gap until the market is more “unlocked” - less of an issue, and better to get the direct market learnings along the way.
> I equate it to partnering with AT&T on the first iPhone.
In terms of strategy, they picked the underdog carrier (Cingular) specifically to avoid having to bundle bloatware and carrier customization at the cost of exclusivity. Likewise, when Apple brought the iPhone to Japan, they did the same thing with the underdog carrier here, SoftBank.
The strategic importance of this was as a bargaining chip with other carriers and fundamentally gave them a lot of control they would not have had if they had gone with Verizon or similar.
> I equate it to partnering with AT&T on the first iPhone. Very inconsistent with Apple’s preference of owning the entire stack
They went to Verizon first but were turned down. Apple needed distribution, which meant partnering with an established carrier.
Regarding "owning the entire stack" didn't make any sense in 2007, especially for a company that was new to the cell phone business.
Three years later, the first iPhone with Apple's silicon was the iPhone 4 with the A4 processor.
Context for Europeans: the US mobile market was basically total vendor lock-in hell up until the mid-2010s. There were only two carriers (AT&T and T-Mobile[1]) you could bring-your-own-phone with, the other two (Verizon and Sprint[2]) only allowed the phones they sold on their network. Phone service and plans were bundled together.
In fact, one of the critical arguments Apple made as to why they weren't a monopoly was "Sure, we demand 30% - but the phone company monopoly we made obsolete used to charge 70%!" Mobile app stores on other platforms were absolutely hell.
One extra wrinkle of this is that Apple didn't actually partner with AT&T, they partnered with Cingular, the smallest national[0] carrier, who only agreed to let Apple ship an unmolested device because they got 5 year exclusivity. Then Cingular got bought out by AT&T. AFAIK AT&T didn't want the iPhone, they wanted the AT&T (insert terrible name here) Powered by AppleTM, with like 20 AT&T services preinstalled and unremovable. 'Cause that's literally what happened with the first Samsung Galaxy phone, every carrier gave it a different name and their own bloatware.
And yes, this hatred was mutual: the 5 year exclusivity meant iPhones were shackled to a terrible network in the US, and there was a significant amount of effort put into baseband jailbreaking just so people could violate Apple's exclusivity agreement and use their iPhone with their choice of carrier - which, to be clear, meant "use it on T-Mobile".
Also, while I'm giving a lot of credit to Apple, the thing that really broke the vendor lock-in was:
1. Google deliberately bidding up spectrum to trigger an FCC open-access pledge on LTE bands, which forced Verizon to allow third-party networks
2. Qualcomm giving up on UMB, forcing Verizon to adopt LTE, and by extension, SIM cards[3]
3. Clearwire / Sprint's WiMAX service totally failing, also forcing Sprint to adopt LTE and SIMs
[0] The US has a few "regional" carriers like US Cellular that only operate towers in some markets and license spectrum outside of that area.
[1] Yes, they were owned by Deutsche Telekom at one point
[2] At one point owned by Softbank, now owned by T-Mobile
[3] Strictly speaking, the SIM card spec includes CDMA/3GPP2[4] support, but the largest CDMA market was the US, and any carrier that wanted to support foreign phones used GSM/3GPP track standards
[4] Yes, Qualcomm was really that petty that they named their 3G standards body "3G 2"
> Strictly speaking, the SIM card spec includes CDMA/3GPP2
I think the only market that had R-UIM cards (CDMA SIM cards) was Japan, but even with those you couldn't use non-carrier phones since they had all the configuration hard-coded into the devices. It did allow roaming abroad by putting your card into a foreign GSM phone you'd rent at the airport.
edit: apparently it was also in use in China
They're not building on someone else's platform as much as leasing completely commoditized compute from whomever gave them the best deal. I wouldn't be surprised if this compute will actually be happening on xAI hardware [1].
[1] https://finance.yahoo.com/sectors/technology/articles/google...
> but Apple renting its AI from Alphabet (Gemini with Siri) might be a long term risk, since they're building on someone else's platform.
Apple isn't renting; they distilled Gemini to create their own model for "broad world knowledge". Some of this runs on Google's infrastructure because Apple didn't have enough compute.
All of the personal context stuff is Apple's Foundation Models.
Apple is always not-going to have enough compute of their own, they have billions of users and whatever they are investing in datacenters to service them is negligible.
That said renting storage from Google for iCloud reportedly carries an ~80% profit margin, there's no reason they can't also put a 5x markup on what Google charges them for PCC and Siri since they can still prevent rivals from providing the same service in most markets.
What has apple really lost not investing billions in AI? IMO nothing. At any point they could just buy or partner with any missing piece. Google is the safe bet for Siri but this could be any number of providers in the future at which one of them might even pay apple like google does for search in safari. Apple needs to tackle component costs to increase revenue, especially memory which they have to start thinking about their own fab long term.
> ... Apple renting its AI from Alphabet (Gemini with Siri) might be a long term risk...
Similar to Apple (and everybody else) using Google maps. They survived.
I think this will depend on the commoditization, or lack thereof, of the AI models. If they are more or less interchangeable, Apple will have made the right bet.
Apple's AI infrastructure is a hub device like AppleTV, Mac Mini, iMac, or MacBook connected to iPhone and Watch. They will be the first to benefit from cheaper to run, eventually embed in chip models, and are positioned to be a key player in offloading demand from data centers.
They’re the bridge to the frontier models until iPhone 21 ships with then modern frontier model baked into Apple Silicon.
> until iPhone 21 ships with then modern frontier model baked into Apple Silicon.
Citation: It Came To Me In A Dream
Uh huh 20 years ago everyone denied the use case of the cloud ...grey beards that are all dead now would never allow their cherished benefactor small business owners private data be stored in a homogeneous data center... heard it all every decade when the state management semantics change with the generations of tech bro butt in seats
I am sure this time the Ruby and Terraform script kiddies will hold back progress just like all those BSD admins staved off Linux like they promised to do on Slashdot 30 years ago
Now that this site has no social moat to boast from the other side of, how out of touch yall are is ridiculously obvious
Glad I went with applied physics, electronic and computer engineering degrees. Will take hands on skill setting up experimental research of propagation of information through various physical materials at various power levels over skill in copy paste of ultimately meaningless syntax.
Instead of feeling insulted, you should just refute me. Why are ASICs a desirable alternative to GPU/NPU inference here?
The "baked-in" weight technology you are describing uses enormous amounts of memory. There is not enough SRAM or flash ROM in the world to put a "modern frontier model" on every iPhone, even if you quantized it to 1 bit. It is scarce and expensive, and we are in a global shortage of memory and flash storage.
If we lived in a world where Cerebras, Taalas and Groq could dethrone Nvidia, they would have done it years ago. Turns out, cutting architectural corners has consequences, and they're extremely offputting for the majority of inference providers.
"If we lived in a world where LLMs could work we'd have done it decades ago instead of in the last few years."
I wasn't offended but secondhand embarrassed for you. You didn't think up LLMs before they happened but you're so sure about the future nonetheless.
Because we could make up an x86 we should have by 1896!
I mean frontier like ability with less data.
You're doing the same old IT thing where ya act like your grasp of today is where progress terminates. It's cheesy.
But they could rent from any of the 200+ neo clouds right?
I assume Apple is buying time.
Apple doesn't pay Google.
Google gets a small discount on how much they pay Apple to be the default search engine on Safari.
Apple can pivot Siri pretty easily.
> Apple renting its AI from Alphabet (Gemini with Siri)
this is not how it works.
> Diluted earnings per share was $2.10, up 14 percent year over year, and included a favorable impact of $0.05 from tariff refunds.
In other words, the money consumers used to pay Trump's tariffs was not refunded to the consumers, but went straight to Apple's bottom line instead.
If I remember correctly, Apple didn't put up prices due to the tariffs, they ate it out of their bottom line.
Apple rarely updates prices on existing products, outside of price drops on previous-generation iPhones. It was a big deal when they raised prices on everything a few months ago in response to RAM costs.
They waited until AFTER the tariffs went away to raise their prices! :D
Hey Alexa, define "refund"
Naturally, AAPL stock has slumped nearly 5% on this news after hours.
It dropped at the moment that they announced they were issuing a dividend. Before that it was pretty flat after losing ~2% throughout the day.
Coincidence. They've issued a dividend every quarter for more than a decade.
Because good news indicates a relative high and that’s when you should sell.
Look at the 3 month chart. Strong quarter. Certainly doesn’t look like a deal I want to get in on
Now look at the 2yr 5yr and 10yr charts. Looks like historically high values
5% dips after hours is nothing
> Look at the 3 month chart
It took me a while to realize, but Yahoo charts was showing 3% up from Jun 30 to Nov 2. Turns out there was a huge drop on day 1, so where you start counting _really_ matters!
Wait, we shouldn’t be basing our investment decisions today on data from the past and projections from people with a vested interest in the stock going up?
But you literally are? By looking at past performance you are trying to gage when to sell at a relative high.
Shouldn't this be third quarter?
Fiscal 4th quarter. It doesn’t have to align with the calendar year and usually doesn’t.
Apple's fiscal year more or less matches the US federal FY. It's not exact because the federal FY is 1 October - 30 September, where Apple's ends on the last Saturday of September so there's a bit of float on the starting date.
This is a crazy big number. I think the problem for them now is how people are going to be able to afford to keep buying their products in the age of AI job replacement? They'll have to massively increase their prices and become more of a luxury product and manufacture fewer units with bigger margins.
It's always been easier for Apple to grow down market than it is for its competitors to grow up market. Apple is also quite happy to cannibalize its sales as long as it's the one doing it. See the MacBook Neo as an example.
The age of AI job replacement that doesn't really exist?
> Services revenue reaches new all-time high
Wonder how much of this is due to shitty ads everywhere. (App Store, Maps, Sports.app, ...)
Edit: I forgot Apple News...
They say this in every earnings release to emphasize that they have a diversified revenue stream beyond just iPhone, but if you dig into analyst estimates the “services revenue” is mostly AppleCare (purchased for iPhone), App Store purchases (for iPhone) and iCloud storage (purchased for iPhone). There’s a reason they don’t break it down in their earnings report.
dividend = please don't sell!
dividend = please don't sell!
dividend = interested in long-term performance and institutional investment, not pump-and-dump for the next quarter.
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