Why Apple Still Wins — Even Without AI Power

Why Apple Still Wins Without Riding the AI Wave

Apple has always been known for keeping pace with emerging technologies — from large displays to 4G and 5G connectivity. Yet, in today’s AI-driven era, the company seems to be lagging behind its Silicon Valley peers. Is this a sign of internal stagnation, or simply a calculated choice to wait until AI truly matters? CEO Tim Cook has finally offered some answers.

Despite the iPhone 17’s lack of revolutionary upgrades, it’s propelling Apple toward one of the strongest revenue years in its history. During Apple’s Q4 2025 earnings call, Cook repeatedly emphasized that demand for the iPhone 17 lineup is “outstripping supply.”

The numbers tell the story. On launch day, Apple’s website crashed multiple times, while the first batch on JD.com and Tmall sold out in just 15 minutes. On resale platforms, unopened iPhone 17 units were going for RMB 300–500 above retail, and Pro Max models fetched even higher premiums. Popular livestream host Li Jiaqi even admitted he wouldn’t be selling the phone this year — simply because he couldn’t secure enough stock, not even for himself.

Many customers are waiting weeks for delivery. A Beijing buyer who ordered a base iPhone 17 on JD.com still sees an estimated 23-day shipping delay. Compared to last year’s iPhone 16 frenzy, the contrast is stark — this time, demand is overwhelming.

From a product strategy perspective, the iPhone 17 breaks Apple’s long-held tradition of alternating “major” and “minor” updates. Instead, Apple went all-in on substance: doubling base storage from 128GB to 256GB, equipping every model with the A19 chip, and finally adding a 120Hz refresh rate display — a feature Android phones have offered since 2020. The ultra-thin iPhone Air also debuted, interpreted by many as Apple’s first step toward exploring foldable form factors.

And the price? Contrary to expectations, the base model dropped by RMB 1,000, delivering an unexpected “high-spec at a lower price” appeal.

This newfound sincerity wasn’t born in a vacuum — it’s a direct response to fierce competition. With rivals pushing hardware to the limits, perfecting user experiences, and touting AI-powered photography and cross-ecosystem integration, Apple’s old narrative of “8GB + iOS > 16GB” no longer holds up. In 2024, the global smartphone market grew 7%, while Apple’s share dipped by nearly 1%.

Even so, the iPhone 17 series is proving remarkably resilient. Despite its delayed AI rollout and performance parity with Android flagships, sales remain robust. In just one month, iPhone 17 and 17 Pro shipments surpassed one million units, while the top-tier Pro Max alone sold 2.5 million. Bolstered by government subsidies, the once “budget-friendly” standard model is now in such high demand that Apple has ordered suppliers to ramp up production.

The market response reveals an important truth: for now, AI isn’t the smartphone world’s main selling point. While Android brands race to proclaim the “AI Phone Era,” Apple has chosen a more measured path.

Across the industry, two clear AI trajectories have emerged — from language models to multimodal ones, and from cloud-based operations to on-device intelligence. Yet, even as this roadmap becomes clearer, few brands have turned AI features into must-have experiences. Voice assistants, AI photo editors, and productivity tools remain niche, often replicable through third-party apps. Without truly unique value, the “AI phone” moat is still shallow.

So even without flashy AI capabilities, consumers continue to vote for Apple with their wallets. In a market where hype often overshadows practicality, Apple wins through tangible reliability — value, experience, and ecosystem integration.

Meanwhile, Apple continues to quietly strengthen that ecosystem. As Chinese brands like Xiaomi and OPPO increasingly emphasize cross-device compatibility with Apple’s ecosystem, Apple itself is also becoming more flexible. The new macOS “iPhone Mirroring” feature, for example, allows users to control their phones directly from a Mac — another step in making its closed ecosystem irresistibly convenient.

Interestingly, even while flirting with “value pricing,” Apple’s profitability remains unmatched. By developing its own components, Apple has kept costs stable amid rising memory prices. The company reported a 47.2% gross margin — above the high end of forecasts — and expects to maintain between 47% and 48% going forward. Every iPhone sold also feeds Apple’s lucrative service ecosystem: App Store, Apple Music, iCloud, and Apple One.

Investors clearly approve. As of October 30, Apple’s stock has risen 8.4% this year, making it only the third company in history to surpass a $4 trillion market capitalization. For shareholders, Apple’s formula of “less disruption, more dependable profit” feels far safer than lofty promises with no results.

In the short term, Apple’s strategy of refining fundamentals is clearly paying off. But in the long run, the question remains: when the smartphone industry truly enters the AI era, can Apple once again deliver a game-changing product?

According to insiders, Apple Intelligence is expected to launch officially in China before the end of the year — signaling that the next chapter of AI competition in the smartphone market is about to begin. The only question left: will the iPhone 17 remain impossible to get?