Even with something as simple as dictation, when iOS did it over the cloud, it was limited to 30 seconds at a time, and could have very noticeable lag.
Now that dictation is on-device, there's no time limit (you can dictate continuously) and it's very responsive. Instead of dictating short messages, you can dictate an entire journal entry.
Obviously it will vary on a feature-by-feature basis whether on-device is even possible or beneficial, but for anything you want to do in "real time" it's very much ideal to do locally.
Edit in response to your edit: nope, on privacy specifically I don't think most users care at all. I think it's all about speed and the existence of features in the first place.
Apple has positioned itself as big on privacy, turning privacy into a premium product (because no other big tech company has taken that stance or seems willing to), further entrenching Apple as the premium option. In that respect I think users will "care" about privacy.
Yes. The amount of times I ask Siri on my homepod "What time is it?" and it replies "One moment..." [5 seconds] "Sorry, this is taking longer than expected..." [5 seconds] "Sorry, I didn't get that".
I have to assume this is due to connectivity issues, there is no other logical reason why it would take so long to figure out what I said for so long, or not have the data on what the time is locally.
A lot of end users do not and they have no interest in spending the time figuring it out. That's why it's very important that the companies behind the technology we use make ethical choices that are good for their users and when that doesn't happen, legislators need to step in.
Apple has been on both sides of that coin and what is ethical isn't always clear.
Local also solves any spotty connection issues. Your super amazing know everything about you assistant that stops working when you’re on a plane or subway or driving through the mountains is very less amazing. If they can solve it, local will end up being way way smoother of a daily experience.
> Do users actually care whether something is local or not?
I think most don’t, but they do care about latency, and that’s lower for local hardware.
Of course, it’s also higher for slower hardware, and mobile local hardware has a speed disadvantage, but even on a modern phone, local can beat in the cloud for latency.
(Edit: In terms of privacy as there are benefits in terms of speed and offline work)
It's not like we're not already storing all of our media on the cloud (including voice), passwords and other sensitive data.