Here is my take on this. Apple has decided they don't want to compete in the AI space in the EU, at least at this time. I am sure they talked about it and have decided that the juice is not worth he squeeze due to the fact that they going to get AI regulated to the point of it being nonfunctional.mWhen that happens everyone will complain that Apple Intelligence is a terrible product but won't even consider that it was the EU that made it that way.
I agree with the others that say Apple needs to just pull out of the market. The economic impact to the EU would be immense. The loss of jobs and all the subsequent tax revenue loss would not be insignificant. What I wonder is if Tim has it in his mind at what point to we just say, "We're done." Thing is people in the EU will still get their iPhones, iPads, Macs. It will just be the old way by getting gray market units from other countries at twice the price and the EU still won't get any tax revenue.