Cheaper isn't as much of a problem as functional.

I think precisely the opposite: the marginal value of expensive models is quite small.

If I were to guess, cheaper in this context is being used by Apple to catch up to having an AI product with a real moat.

And, of course, Apple’s best moat is the App Store.

The other competitors have their coding and productivity software, all the stuff they built around their models.

Apple doesn’t really have much of that and I think this is essentially their only hope to gain some B2B revenue from AI.

I mean, yeah, if it doesn't work at all nobody will use it. But the big players are spending $1k/mo.+ on AI at this point. That's obviously out of reach for many.