It's very convenient for Apple to do this: less expenses on costly AI chips, and more excuses to ask customers to buy their latest hardware.
It's a different set of trade-offs.
* Theoretically; I don't own an iPhone.
Server side means shared resources, shared upgrades and shared costs. The privacy aspect matters, but at what cost?
The cost, so far, is greater.
How so if efficiency is key for datacenters to be competitive? If anything it's the other way around.
[0] https://interestingengineering.com/innovation/elon-musk-xai-...