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Apple claims its on-device, and if thats true then the phone company is not spying on users.

Apple claims "Apple is the best".

Sure, its reasonable to doubt Apple's claim here. Or even think that its accurate now but may change in the future. I'd probably phrase it as a possibility rather than treat it as fait accompli.

Is privacy a concern if the monitoring is locally processed? Apple claims it is.

I say it's amazing how far we've progressed. We could've prevented an entire Seinfeld episode if cameras could warn the user of the presence of nudity in their photos.

Could the phone company have seen your junk? Or just heard the way you describe it?

That distinction isn't important. We could take it for granted that our conversations wouldn't be analyzed for sexually explicit content, and then companies like Apple normalized the opposite. We hadn't yet been fooled by "think of the children".