Why Apple is sitting pretty – AI hype be damned

Despite criticism for missing the AI wave, Apple finds itself in a strong competitive position in 2026. The iPhone 17 base model is compelling without needing a Pro upgrade, M-series Macs are gaining PC market share, and the Mac Studio has become a favorite for local AI inference. iPadOS 26 adds proper windowing, smart glasses are rumored, and the services business generates high-margin recurring revenue. Apple's disciplined, on-device AI approach and avoidance of massive data center capex looks prudent as rivals like Microsoft struggle with Windows stagnation and Copilot fatigue. Linux gaming is also eroding Microsoft's enthusiast base. Apple's regulatory and Siri challenges remain, but its overall fundamentals are strong.