Dave Lee

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Column: Apple’s OpenAI Suit May Turn Out to Be a Favor

Though we don’t yet know the full merits of Apple’s trade secret lawsuit against OpenAI, we do know one thing: It’s bad news for OpenAI’s efforts to build an iPhone-killer. The legal assault will bog down Sam Altman’s company in injunctions and red tape.

But here’s the reality: OpenAI never really stood a chance of toppling the iPhone anyway. This suit should force the company to give up the folly sooner rather than later, culling yet another dead-end side quest on its way to an initial public offering. In the long run, if OpenAI survives, it might one day be thankful that Apple’s intervention made it change course sooner rather than later, saving billions of its desperately needed dollars.

Apple’s OpenAI Suit May Turn Out to Be a Favorbloomberg.comThough we don’t yet know the full merits of Apple’s trade secret lawsuit against OpenAI, we do know one thing: It’s bad news for OpenAI’s efforts to build an iPhone-killer. The legal assault will bog down Sam Altman’s company in injunctions and red tape.

aiappleopenai

Tim Cook warms up Wall Street for price hikes

Wall Street Journal:

“Unfortunately, price increases are unavoidable,” [Apple CEO Tim Cook] said. “We’re doing our best to mitigate the huge increases that are being passed to us, and we’ve been trying to shield our customers from the increases, but the situation has become unsustainable.”

Cook declined to offer details on the timing or scale of the planned price increases, nor which products would be affected. Apple’s next major product launch is likely to be in September when it releases the iPhone 18 lineup, expected to include a new foldable iPhone.

Few points here:

  1. Apple has already raised some prices, sort of: It has eliminated some of the lower-spec'd versions of its Macs, nudging buyers to higher margined configurations.

  2. A price increase on the iPhone is long overdue, and the 20th anniversary year for the device seems a good opportunity to do that. The last time the iPhone saw a price increase was with 2017's iPhone X — the 10th anniversary model.

  3. The WSJ did the math on a $1,299 iPhone. Maybe Apple steered them here, maybe it did not. Either way, the reporting primes Wall Street for such a move. And Cook saying it out loud now saves his successor, John Ternus, from beginning his tenure with some bad news.

  4. My own reporting suggests consumers might be willing to go much higher, especially if Apple offers longer-term installment plans that keep monthly payments at the same level they are now. Longer plans are more feasible these days, when the largest cohort of upgraders each year have had their current handset for at least three years, largely thanks to improved battery tech.

  5. Apple could disguise a price increase for the regular iPhone by hiding it within the anticipated folding iPhone, expected to be priced in the realm of $2,000. For the Apple superfan prepared to pay that, why not make it $2,299 and help a more cost-conscious consumer out?

Exclusive | Apple to Raise Prices Due to Memory Chip Crunch, Tim Cook Sayswsj.comThe CEO tells the Journal that Apple plans to raise prices on its products to offset the surging costs of both memory and storage.

applewall street journaltim cook