Apple may twin with Gemini for AI as iPhone 17 looms

Intelligence tells us Apple is likely to introduce its own AI-powered search engine but may work with partners to improve what it provides. Subsequent to the recent Google antitrust judgment, which allows Apple’s lucrative search deal with Google to continue, it appears that Apple may even partner with Google Gemini in the revamp — which would see the search giant’s AI run on Apple’s Intelligence servers (and explain why Apple may choose not to build its own).

The idea in play here, according to Mark Gurman at Bloomberg, is that Apple will offer a new ‘World Knowledge Answers’ feature in which users will be able to search for information and gather AI-generated summaries based on web results. The tool will also grab text, images, videos, and information concerning points of interest, which of course means all the creatives who have spent their lives curating this information on their own websites can take joy in their own philanthropy for providing all this data to the Google/Apple service.  

Presumably in the wake of the recent court decision, Apple and Google this week officially inked their formal deal to go ahead with testing the service, with Apple using the Google-designed model. It is apparently also evaluating Anthropic’s Claude. These features won’t go live until next year, of course, so don’t anticipate too much discussion of them during Apple’s iPhone 17 launch next week.

What to expect from the iPhone launch next week

What you should expect at the iPhone launch is iPhones, most particularly the newer, thinner device we’re currently calling the iPhone Air. The company will also introduce the iPhone 17, iPhone 17 Pro and iPhone 17 Pro Max. We also expect to be introduced to the AirPods Pro 3 and upgraded Apple Watch series. Morgan Stanley believes Apple will dispense with the 128GB models, which may translate into a slight price increase.

While broadly positive in his expectations for the new products, Morgan Stanley analyst Erik Woodring suggests sales momentum will in part depend on Apple giving a little more insight into its refreshed AI strategy. It is interesting that in the run-up to the event, not only are we hearing more reports of potential partnerships, such as with Anthropic or Google Gemini, but we’re also seeing some members of Apple’s AI team jump ship.

While this is being presented as some form of brain drain, is it not possible that these departures reflect a transformation of the company’s approach to AI? I think that’s likely to be the case. 

AI aside, with services income now looking a lot more stable subsequent to the Google judgment and hardware sales seemingly given some protection against threatened US import tariffs, “Apple still needs to execute, but the path to outperformance is getting clearer to us, and what will matter most at next week’s iPhone launch event is pricing, a still under-appreciated growth tailwind,” said Woodring in a client note seen by Computerworld.

But is patience wearing thin?

Apple’s audience appears ready, but the company’s much-publicized stumbles around AI seem to be beginning to get under their skin, according to a SellCell survey. That survey tells us almost seventy percent (68.3%) of US iPhone owners plan to upgrade to the new devices, but 27.1% of them feel Apple has “lost its edge” against rivals.

There’s also a lot hinging (sorry) on Apple’s foldable iPhone next year, with 30.3% of iPhone users thinking about moving to another brand if Apple doesn’t get that product out. In other words, while Apple still enjoys spectacular customer loyalty, that faith is being tested — and what the company comes up with over the next 12 months could define the future of its business.

We’ve heard that kind of talk before, of course, and experience tells me that it continues to be very unwise to bet against the company. After all, if the threat is that customers will abandon the platform if Apple doesn’t make decisive moves, the opportunity to consolidate its existing audience and attract new users may instead be unleashed if the company’s new products excite its customers.

Or has Apple found a path to opportunity?

As we understand it, Apple has two big iPhone introductions planned, for those that like it think, the super-thin iPhone should show up next week. That will be followed by Apple’s folding device allegedly planned for introduction next year, following the launch of the new AI search feature on the company’s platforms in spring 2026. 

Audience intelligence suggests that Apple has good reason to get its new hardware launches right, with 51% of US iPhone owners telling Morgan Stanley in March 2025 that there was an ‘Extreme Likelihood’ they would upgrade their device in the next 12 months, an all-time survey high.

The analysts also tell us just under a third (30%) of iPhone owners express “extreme interest” in a thin iPhone.

Put it all together, and while the road seems to have been pretty rocky getting here, right now opportunity knocks for Cupertino. 

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