Apple’s opex, regardless of the details of the deal with OpenAI, will increase because of Apple’s intelligence (AI).

They will either have to increase the cost of their subscriptions or sell Apple devices at a higher price point in order to maintain their margin.

Revenue from services has been steadily on the rise, but how much more can they charge? If they charge more, users will also compare them to other services on offer from Google and others, and might switch.

There has been a slowdown in device sales. But people are a lot more locked in to the ecosystem of Apple.

Will people suddenly switch to the Windows ecosystem if they raise device prices by 10%? I doubt they will. And people are used to premium prices on Apple devices.

With services, I am not so sure.

Also, do Wall Street analysts care more about Apple again making more money from selling devices or their growth story around subscription revenue?

One hypothesis is that Apple Intelligence will lead to people upgrading their devices more quickly, but whether this will actually happen is something that only time will tell.