Unlike competitors feeling pressure to build proprietary AI foundation models, Apple can simply partner with providers like Google. This reveals Apple's true moat isn't the model itself but its massive hardware distribution network, giving it leverage to integrate best-in-class AI without the high cost of in-house development.

Contrary to narratives focused on its AI lag, Apple is predicted to have its best year ever in 2026. This success will stem from the continued strength of its core iPhone product and a premium foldable phone, as dedicated AI hardware devices from competitors will not yet be mature enough to pose a real threat.

Apple's deep reliance on China is not just about cost but a 25-year investment in a manufacturing ecosystem that can produce complex products at immense scale and quality. Replicating this unique combination in India or elsewhere is considered fanciful.

Rivian deliberately used its expensive R1 models as "flagship" products to establish a premium brand identity and a "handshake with the world." This prestige is now leveraged to launch the more affordable, mass-market R2, which inherits the established brand elements.

Pricing power allows a brand to raise prices without losing customers, effectively fighting the economic principle that demand falls as price rises. This is achieved by creating a brand perception so strong that consumers believe there is no viable substitute.

For high-end brands hesitant to offer discounts, Apple's model is ideal. They sell products at full price but include a substantial gift card for future purchases. This drives sales and encourages repeat business without ever putting the core product "on sale," thus preserving brand prestige.

Due to extreme demand and limited official stores, scalpers backed by triads created a massive arbitrage opportunity. They controlled distribution, buying iPhones in bulk and selling them at huge markups. This shadow economy became so profitable that, on a per-unit basis, these groups were making more money than Apple itself.

Rolex's CEO believes the Apple Watch was beneficial, not detrimental. It accustomed a new generation to wearing something on their wrist, effectively expanding the total addressable market for all watches, including luxury ones. This shows how a competitor's product can act as a catalyst for market growth.

Apple's CFO Luca Mastri strategically reframed the company's story away from volatile device sales towards high-margin, recurring services revenue. This narrative shift was critical in convincing investors to value Apple like a SaaS company, dramatically increasing its price-to-earnings ratio.