Its wild but if chip is something like $30 and provides frontier intelligence then just throwing them away every 3 months isn't that big of a deal when a lot of us pay $50 to $150 to $1.5k per month on AI tools.
I don't think it needs to be on phone per-se. It can keep chugging in cloud - plenty of people use cheaper older models.
And I suspect the growth will slow eventually making taalas interations slower.