It looks very much as if Apple’s former designer Jony Ive will compete against the company his friend Steve Jobs created as he works with OpenAI on a device that seems to be some form of competitor for the iPhone.
In a post on X, TF International Securities analyst Ming-Chi Kuo claims OpenAI is working with Qualcomm and MediaTek to build SoCs for smartphones. These chips will be built to deliver faster AI performance. Kuo claims the plan is to achieve mass production by 2028 with the hardware specifications for these devices set to be finalized by early 2027.
You could argue that as well as working with Apple’s former design lead, OpenAI is also taking a leaf out of the company’s processor playbook with this strategy. That’s because just as Apple works with TSMC on chip design, OpenAI intends to work with Qualcomm and MediaTek, which may help it achieve competitive processors far more quickly than it would take if building these things from scratch.
Apple faces a new competitor
What’s interesting about this is the release schedule as it suggests mass production of the new device may commence as soon as 2028, one year after the iPhone’s twentieth anniversary. We know that Apple will not sit on its iPhone laurels in the coming years and already expect the company to introduce a new folding device as well as a potential new high-end device.
We also think that Apple will be shipping devices with very fast, very power-efficient 1.4nm processors by the time the purported OpenAI product appears. It’s open to question if OpenAI’s new partnership will be able to develop AI processors for smartphones that compare to those Apple will have available by then, given its advantages in the space today, but neither company can afford to be complacent in this arena.
Why is it so important?
Because of the nature of AI.
It’s all about AI agents
While today’s leading AI services tend to rely on cloud-based models, tomorrow’s services will be far more independent and far more likely to run securely on edge devices.
AI agents, for example, may call on server-based intelligence to accomplish some tasks, but there will be an increasing tendency to maintain data privacy within the transaction. Agents will call on servers to provide only the computational assistance they require, handling other tasks natively on device. This will be agentic edge intelligence, which is what I anticipate Apple will discuss at WWDC 2026 in a couple of months.
Kuo says AI agents will replace apps on devices, and that’s going to require both on-device edge intelligence and cloud AI integration. To deliver that, OpenAI will need to emulate Apple’s famed ‘whole widget’ approach by controlling both hardware and software.
The analyst predicts that part of the go-to-market plan for the new Apple competitor involves subscriptions and development of a third-party AI agent ecosystem. It’s a model in which you don’t purchase apps but do invest in utility. This will also likely be part of Apple’s message to developers in the coming years — though rather than leaning into OpenAI, it will draw on some of the on-device AI models it is building with help from Google Gemini.
What comes next?
Apple is no stranger to existential struggle. The story of its resurrection after the return of Steve Jobs is legendary, but the company has faced its share of other threats since then. Who else recalls the great smartphone design wars, the entire netbook category, or Windows Mobile, for example?
Apple’s new challenge is just the latest chapter in its book, and the most likely outcome I can imagine sees OpenAI grabbing most of its market share from Android, rather than iOS — particularly as Android device manufacturers search for excuses to offer devices at higher price points in the face of stiff component costs and Apple’s aggressive move into the mid-range market. It is also fair to think that component costs may yet delay elements of OpenAI’s plan, particularly as Apple seems to be paying top dollar to secure supply.
All in all, we are entering interesting times as Apple’s newly promoted CEO, John Ternus, takes command — and his insight and experience in hardware development and design seems even more well-timed in the face of the news from OpenAI.
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