I think they could never make it good enough at the right price.

You have to remember all of the AI companies are making cash bonfires. People aren't going to stop buying iPhones because Siri can only do what it does now.

If Apple focuses on hardware and skips the pay-for-inference bubble they'll come out the other side with the best consumer hardware everybody already has for local inference which is going to eat the whole industry's lunch.

nvidia is going to have a hard time convincing people they need to buy $1000 LLM inference hardware. Apple isn't going to have a hard time convincing people to buy the next generation of phone/tablet/laptop.