Apple Under Threat From OpenAI And Jonny Ive – And Trump’s 25% Tariff Threat

For the first time, Apple’s status as the most innovative company in consumer technology might be challenged by the man who created its most iconic products.

Jonny Ive worked closely with Steve Jobs on all of Apple’s signature products: the iPhone, iPod, MacBook, iPad, and Watch. He left in 2019 to start his own design firm, LoveFrom, and started io last year with many other high-profile Apple staffers, Scott Cannon, Evans Hanke, and Tang Tan, as Bloomberg highlighted when the deal was announced. Hankey took over as Apple’s head of design from Ive and left in 2023. Tan was in charge, until last year, of the design for the iPhone and Apple Watch. Cannon left Apple to found his own email app, called Mailbox, that Dropbox bought.

A year later, after raising startup funding from big-name Silicon Valley backers, including Jobs’ widow Laurene Powell Jobs and OpenAI’s startup fund, Ive’s 55-person company has been sold for $6.4bn. Albeit in shares, they are shares in OpenAI – currently valued at $300bn. OpenAI bought a 23% stake in io last year, so the deal amounted to $5bn in OpenAI stock, which just can’t stop climbing in value.

On the other hand, Apple’s actual share price has fallen behind Microsoft and Nvidia, over concerns about new tariff threats US President Donald Trump has made. 

While there is a future threat to Apple’s efficacy at making products – and so many of its former star executives working at a competitor with no legacy assets like iPhones to protect – there is a very current fear that Trump’s shenanigans could do real damage in the near future.

On Friday night, Trump posted on his own Truth Social that he would impose 25% tariffs if the flagship devices weren’t manufactured in the US – something that is not economically viable because of the higher American costs.

“I have long ago informed Tim Cook of Apple that I expect their iPhones that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else,” Trump posted.

“If that is not the case, a Tariff of at least 25% must be paid by Apple to the US.”

Not surprisingly, Apple, which started May as the most valuable company in the world, saw its shares go down 3% that night.

“It’s a red flag for me that Trump continues to single out Apple and seems to have something against them,” said Randy Hare, Huntington National Bank’s director of equity research, told Bloomberg. “It doesn’t mean that Trump is going to do anything more, but you can’t predict what’s going to happen, and that makes me cautious.”

Bloomberg’s Mark Gurman, the best Apple commentator by far, wrote that “for the first time in decades, Apple’s position at the top of the tech industry is under genuine threat. And last week’s deal… put Apple’s plight into sharper focus”.

He said Ive’s deal “should cause major shockwaves at Apple, especially after a design-team brain drain and struggles in artificial intelligence”.

Anyone who bought an iPhone 16 hoping to try out Apple’s much-hyped Apple Intelligence is still waiting for anything meaningful to be launched. That is remarkable out of character for Apple, but it has missed the AI rush and will only launch meaningful products next year, as Gurman has predicted. 

“The iPhone isn’t going anywhere–yet. Ive and Altman say their upcoming device won’t compete directly with the smartphone. And despite Ive’s talents and Altman’s technology, there is risk here for them as well. There’s no guarantee that their devices will be a hit and that society is ready to move away from screens in the next few years.”

However, there are noticeable technology changes, the shift from desktop to laptop computing, then the shift from 2G cellphones to BlackBerries to touchscreen smartphones.

“At some point, the tech landscape will change, and clinging to yesterday’s ideas will be a problem,” writes Gurman. “AI is quickly becoming as foundational as the multitouch display was two decades ago, and it’s ushering in a new wave of devices, centred on instant access to information and intuitive voice interaction.”

That is the big thing: what will be the main way we interact with a new generations of devices that are vastly better at listening to our voices and interpreting them, than we are texting and typing and swiping on a touchscreen.

“We are obviously still in the terminal phase of AI interactions,” Altman told Bloomberg. “We have not yet figured out what the equivalent of the graphical user interface is going to be, but we will.”

Neither he nor Ive think the smartphone will suddenly be replaced, but we are clearly seeing the trends of how AI use cases are evolving.

“In the same way that the smartphone didn’t make the laptop go away, I don’t think our first thing is going to make the smartphone go away,” Altman said. “It is a totally new kind of thing.”

Ive thinks that “the phone, as it currently is, is a remarkable general-purpose device,” but AI offers “very new ways” to interact with smarter technology than we’ve had before. 

Altman says “it will be worth the wait. It’s a crazy, ambitious thing to make”.