Apple Centering AI Plans on App Store and Hardware

Apple is reportedly focused on hardware and services as its rivals pull ahead in artificial intelligence.

That’s according to Bloomberg News’ Mark Gurman, who made his case Sunday (March 29) in his regular newsletter about Apple.

Gurman contends that, unlike efforts to compete in places like music and TV, Apple has “effectively conceded the AI race” after getting caught off guard by ChatGPT and losing AI talent to rivals like Google, Meta and OpenAI.

The company’s potential path to success resembles that of the one it chose for its App Store, he continued. Apple offers in-house apps but still lets customers install third-party versions for a percentage of the revenue. The difference is that AI is “far more foundational,” making this strategy seem more like the idea of letting competing operating systems run on Apple hardware.

“Some Apple executives and commentators have tried to liken AI to web search, arguing that the company can succeed without owning it,” Gurman wrote. “But that analogy falls short: Search is a destination, while AI is becoming the next-generation OS itself.”

That’s in keeping with research by PYMNTS Intelligence, which shows that 52% of AI’s most devoted users now access the technology through installed apps, rather than browsers. As covered here last week, this indicates a shift toward “persistent environments” in which AI usage becomes habitual. 

“As AI moves from a destination to a default interface, the companies that control access points are increasingly positioned to control engagement, retention and monetization,” PYMNTS wrote.

The research also shows that consumers are not evenly experimenting across platforms, but rather settling early on a small number of interfaces. For instance, 83% of AI users have tried ChatGPT, versus 48% for Google Gemini and 30% for Microsoft Copilot, underlining how initial access points can dictate long-term behavior.

“That concentration is reinforced by the environment,” PYMNTS added. “Among users engaging through dedicated AI platforms, 43% say they have fully replaced previous methods, rather than layering AI on top of existing workflows. In app-based environments, switching costs rise as context, preferences, and history accumulate.”

As for Apple, Gurman wrote that the company has little choice but to pursue app- and search-like strategies. 

With iOS 27 and the new Siri Extensions program reported on last week, the company is indicating it won’t seriously compete directly with OpenAI or Google in the market for the most advanced AI models and features. Rather, it will turn to its dominance in hardware “letting others carry the weight of AI innovation,” the report concluded.

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