As if the smartphone market wasn’t already stuffed with enough rivals to the iPhone, it’s emerged this week that AI giant OpenAI is getting ready to throw its hat in the ring. In a short article posted to Twitter/X, the highly respected analyst Ming-Chi Kuo claimed the ChatGPT maker is “set to redefine smartphones” with a new handset created in partnership with Qualcomm, MediaTek, and Luxshare.
Apple has so far struggled to bring the iPhone up to speed with the pace of AI development, and on first impressions, this might sound like a formidable challenge for John Ternus to deal with as he settles in as CEO. But I don’t think he’ll be worried about the threat of the “ChatGPTphone.” Here’s why.
1. Apps aren’t dead yet
In the article, Kuo talks about the evolution from app to agent. “Users are not trying to use a pile of apps,” he says. “They are trying to get tasks done and fulfil needs through the phone.” That sounds good if the apps you’re replacing are Calendar, Clock, Weather, and a bunch of airline, rail, and cab apps. But people will still want to watch and listen to streaming services, browse social media, play games, track sports, and do dozens of other things on their phones. You can’t replace apps with an AI agent unless it’s just a glorified app launcher.
2. It’s too late
Apple has been doing this for nearly 20 years, and has built up a loyal fan base of users who would never consider anything other than an iPhone. Google and Samsung, too, have multi-generation fans, as do the other manufacturers of Android phones. Even if OpenAI’s phone came out in 2026, that would already be extraordinarily late to be trying to break into the smartphone market, but Kuo says mass production won’t start until 2028… by which point, as a commenter points out, OpenAI may not even exist. It’s a mark of OpenAI’s lateness that by this point, most other companies are trying to plan for what comes after the smartphone.
3. OpenAI has no experience in smartphone hardware
OpenAI will be going from a standing start in a mature market stuffed with contenders that have, as mentioned above, been doing this for almost two decades. Even with design guru Jony Ive on the team, it takes multiple generations to get this sort of thing right, and that’s time OpenAI hasn’t got.
4. OpenAI is overestimating its brand loyalty
“OpenAI’s advantages lie in its consumer brand, years of accumulated user data, and leading AI models,” Kuo writes. We’ll come to the second and third factors in due course, but even the brand awareness is debatable. OpenAI certainly has a lot of brand value in ChatGPT, but far less as a company. And just because people know or even like a piece of software, it doesn’t mean they’re prepared to pay hundreds of dollars for hardware by the same company.
5. The ecosystem isn’t there
With its iterative updates and generally conservative designs, Apple makes the smartphone market look easy. But it’s not just about the phone, and OpenAI hasn’t got anything like the same surrounding ecosystem to push people towards its smartphone and then lock them in. The iPhone benefits from seamless compatibility with the AirPods, Apple Watch, Mac, and Vision Pro, and also benefits from the appeal of Apple Music, iMessage, Apple Pay, the App Store, and so much more. The only halo product OpenAI can build a phone around is ChatGPT, and the problem with that…
6. What’s the unique selling point?
…is that ChatGPT is already on the iPhone, both as an app and integrated with Siri and Apple Intelligence. OpenAI could cut those off (along with the Android app) to give itself a USP, but that would likely hurt OpenAI more than its smartphone competitors.
7. ChatGPT isn’t even that special
Yes, ChatGPT was the catalyst for the AI explosion over the past few years, and it’s a market-leading model. But rivals have proliferated, and most are backed by larger companies with a greater capacity to endure the inevitable market dips. AI is only likely to become more commoditised. Why buy a phone built entirely around ChatGPT when you can get a phone that can run ChatGPT as well as Gemini, Claude, or whichever model you may happen to prefer?
8. Apple is going to get AI right eventually
I’m the last person to praise Siri or Apple Intelligence, but Apple has made AI a top priority, and it has the resources to reach a solution eventually (or just buy a company that has a worthwhile model already). It’s really just a matter of time before Apple Intelligence works well, and that’ll happen before the OpenAI phone arrives. At which point, the one thing OpenAI does better than Apple won’t be an issue any more, while Apple will still have all its other advantages as a maker of phones and phone software.
9. OpenAI never wanted to make a phone anyway
If you examine OpenAI’s hardware development history, it becomes clear that this entire project isn’t its first choice. The company originally wanted to make an AI pin, which it worked on with former Apple design guru Jony Ive (who is now more closely associated with OpenAI following a merger with Ive’s LoveFrom studio in 2025). Why suddenly shift from a pin to a phone? All the reasons above, presumably. But rival AI pins such as Humane were savaged by reviewers, and OpenAI is now fleeing to the more consumer-friendly world of phones as a half-hearted compromise. Good luck with that.
