Source: Nate’s Substack
With both the CEO and operations lead drawn from hardware engineering rather than AI/software talent, Apple is positioning itself as a device manufacturer first—a deliberate choice that limits its ability to compete in the AI-native stack reshaping consumer tech. This isn't caution; it's a bet that Apple's margin power lies in controlling the silicon-to-user experience chain rather than racing OpenAI or Google in model capability, effectively ceding the intelligence layer to partners. Companies are splitting into two camps: those doubling down on vertically integrated hardware (Apple, Meta on VR) versus those treating devices as terminals for cloud-native AI (Microsoft, Google), with radically different capital requirements and defensibility profiles.