Context stays outside Apple — User preferences, history, patterns flow to AI providers
Services revenue migrates outward — Subscriptions go to OpenAI/Anthropic, not Apple
Developer optimization follows the AI — Apps optimize for AI APIs, not Apple Intelligence
Upgrade motivation weakens — Hardware improvements matter less if AI runs in cloud
The Switzerland Analogy
Apple bets it can be Switzerland — the trusted neutral intermediary brokering AI access while protecting privacy.
But Switzerland works because it controls banks, not just borders.
Apple controls the borders (devices). The banks (AI models that generate value) remain in other hands.
The Critical Nuance
Device control creates OPTIONALITY, not inevitability.
Apple’s 2.2B devices let it choose which AI to surface. But if Apple cannot build competitive AI, it becomes a toll collector rather than a platform — valuable, but diminished.
Historical Precedent
Company
What Happened
Result
IBM
Dominated hardware, ceded software to Microsoft
Became services company
Intel
Dominated chips, missed mobile
Struggled with foundry pivot
Nokia
Dominated phones, missed smartphones
Acquired by Microsoft
Apple is not Nokia. But the warning is clear.
The Bottom Line
2026-2027 will answer whether Apple can build its own banks through Baltra silicon and improved foundation models, or whether device-layer control becomes a dignified decline strategy for a company that won the hardware race but lost the intelligence war.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
