This is one of the most cash rich companies in the world and it has failed to have any position in the most critical technology development perhaps ever.
It's a clear signal that Apple became the most incredible operational/execution company under Tim Cook, but lost its innovation leadership.
There also doesn't seem like any real opportunity for them to Apple-ify this tech (any more than today's announcement). There's lots of rough edges and the underlying technology is fundamentally janky and extremely problematic in Apple's second differentiator of privacy.
For building a competitive AI they'd have to hire the talent, which is expensive and then do a massive investment, which may still end up far behind the competition. (See there attempts with Siri)
Now they can pick the model they want and if time is right they can still build their own.
In the end they still want to sell devices. They aren't doing a search engine (while they could), they are not doing an LLM model, ...
This has never been true, not since Steve Jobs returned.
The heart of Apple is software and hardware integration.
Hardware companies that do software just to prop up the hardware business do terrible software, and (no doubt the Apple haters gonna hate this) but Apple does - for the most part - amazing software.
>> which is expensive and then do a massive investment
Apple has $145 billion in cash.
This is true now more than ever, since their hardware is now much better than the competition and the software pretty abysmal.
>The heart of Apple is software and hardware integration.
The heart of Apple is integrating their excellent hardware with their subpar software in order to force users to adopt it.
This doesn't mean they want to throw it out of the window in a way which reduces their overall margin.
Apple largest acquisition in their entire history is three billion dollars (Beats), Sam OpenAI got nothing and Google is getting a measly one billion dollar refund for Gemini.
Innovation is Apple Silicon and the five ecosystems (Microsoft and Nvidia aren't sparking now for nothing), Innovation is being the last American vertical computer company left from the 1980's who has been able switch gears went necessary (the next gear shift will probably be memory)...
But there are lots of differing possible reasons for this, and I think it is premature to conclude with any one in particular.
The users really aren't Gemini users, they don't care what the model is behind the scenes.