No, Apple directly benefits in that users only get the "magical" user experience when using Apple devices. There are two perverse incentives: one for Apple to lock their users into their platform, and one for Apple to implement a "better" experience unilaterally. Apple does both of these things.

Today, if I create a passkey on an Apple iPhone, and I pay Apple a monthly fee for iCloud, I can then walk over to an Apple Macbook I own and sign in to the same web site without another step.

But if I don't pay Apple a monthly fee, OR the phone isn't an iPhone, OR the laptop isn't a Macbook, then I don't get that user experience.

There is absolutely no technical reason that I shouldn't be able to get precisely the same level of security and precisely the same user flow without having to need all the devices to be Apple. But Apple chooses to restrict how it can happen.

Apple allows you to use third party apps as passkey providers

Not on their own websites, AFAIK.

Why do you say you have to pay a monthly fee for iCloud?

None of the technology you’re discussing here requires a paid account.

You may, separately, decide to sync more than the meager free quota of data on iCloud, but that’s an unrelated issue. You’re welcome to use iCloud just for keychain sync.

> Doesn't Apple primarily want the best user experience, and the safest way to use devices?

Presumably, yes.

> So they should get onboard with what is best for the user.

What happens when there’s a conflict? They usually go with the option that screws the smaller niche user base.