These are my quick and dirty, somewhat off the cuff thoughts on the state of Apple in 2025 and how it got to here.
When Steve Jobs installed his chief operating officer and supply chain expert, Tim Cook, as the new Apple CEO, he did so in part because Cook was his perfect complement. Where Jobs was a product visionary that often didn’t care how it was made as much as what was made, Cook was the kind of guy who could put together the process to ensure it was made well. That meant dealing with the logistics, getting other businesses on board, sourcing the right components, and managing the production and business aspects of the product.
That was great for Jobs because it freed him from the nitty gritty details of bringing a (hopefully) profitable product to market and then maintaining that product and (hopefully) its lead with customers.
That was great for Apple when it had both Jobs and Cook. Without Jobs, however, Apple lost its product spark. Cook had a natural understanding of how supply chains work to increase efficiency, scale, and profitability, but none of Job’s understanding of how humans work, so after Jobs, Apple stopped building for people and began building for the supply chain.
Jobs would start with a human problem or desire and design experiences to satisfy those humans. Cook starts with his global manufacturing and business partners and builds the best product he can within the scope of those relationships. Building for people and building for the supply chain result in very different products. Where Jobs gave us the iPhone, Cook gave us a dozen iterations on the iPhone, each more profitable than the last.
And this gets to the heart of Apple’s biggest problem today. Cook took a product company selling the best possible technology products to all of us and financialized it. Where before we were the customer, today Apple stock holders are the customer. Where before Jobs gave us all great products, today Cook gives stock holders ever increasing wealth.
Apple is now the world’s most valuable company, thanks to Cook. But that value is not about us, it’s about Wall Street. Tim Cook, a glorified accountant, transformed Apple into a powerhouse but failed to put that power to use building anything new and useful for users.
About 10 years ago, Cook recognized that Apple was losing its innovation edge. Yet another iPhone version, accessory, or service wasn’t going to keep Apple in front of the pack for innovation and customer excitement so he launched two ambitious initiatives designed to change that. The first was the Apple Car, project Titan, an electric self driving car that would revolutionize the auto industry the way the iPhone did for communications. The second was the Vision Pro facial PC, back then called project N301.
The car went through several major changes in the years between its start in 2014 and it’s cancellation in 2024, from a consumer EV meant to compete with Tesla, to a shuttle or van, then to a set of hardware and software components other car makers might use, and finally back to a consumer vehicles. None of these approaches went very far and after about 10 years and 10 billion dollars, Cook cancelled the project.
The Vision Pro began life before Cook’s tenure, back in the mid-2000s. Jobs had patents for head mounted displays as early as 2007 and considered building a product for several years before his death. The reasons Jobs never built a head mounted display or head mounted full computer were many, but chief among them were technology limitations and form factor. Jobs understood that most people were never going to strap 1 lb of computing technology to their faces and it wasn’t then (and still isn’t today) to build immersive experiences in a spectacles form factor.
Cook, in his absolute hubris, thought Apple’s size and influence could change that.
He’d seen Google flop with its Glass AR spectacles shortly after he became CE), and he had his hands mostly full learning his new role and delivering iPhone updates and accessories so it wasn’t until about 2015 that he began putting significant resources toward this new project.
As Apple started investing in augmented reality headsets around 2015, Cook understood that it would take years to bring the new computing platform to customers and that various parts of it could be prototyped in their existing product line so the first bits were trialed on existing products like the iPhone. Those iPhone software frameworks, most importantly ARKit, were released in 2017.
ARKit was an augmented reality framework for the iPhone that supported applications like navigation, various retail experiences, and gaming. ARKit leveraged iPhones existing cameras and motion sensors for this and apps like Apple’s virtual tape measure showcased this. Apple’s Measure app demonstrated that cameras, without other specialized hardware, could provide real, if limited, value.
ARKit, for core functions, and RealityKit for the rendering layer, were precursors to project Borealis, which would become Vision OS, Apple’s operating system for this next generation of augmented reality computing. Combined with existing iPhone OS code and features like opaque AR overlays and spatial tracking from acquired companies like Vrvana, Apple built a powerful software platform for augmented reality devices.
By 2022, Cook had prototypes of his new facial PC and by 2023 the product was complete enough to show off at Apple’s annual developer conference. In early 2024, Apple shipped the Vision Pro and Vision OS software that powered it.
Vision Pro crammed a whole PC, plus a bunch of cameras and other sensors and high fidelity displays into a 1.5 pound device that you wore like goggles, strapped around your head and pressed into your face. This new experience was marketed by Apple as Spatial Computing.
But Apple was late to the game with Vision Pro.
In 2015, Facebook bought Oculus, a company with a head mounted display prototype that had gained significant attention through crowdfunding. That HMD evolved at Facebook from a simple display that plugged into your PC, to a self-contained facial computer it called Quest.
Facebook had spent a decade focused on the web and so missed the mobile revolution and the chance to own a lucrative mobile OS and app store. Zuckerberg was intent on building and owning the next big platform which he believed to be virtual reality headsets so he reoriented the entire company to focus on this, even renaming Facebook to Meta, borrowing the name from the word “metaverse,” coined by Neal Stephenson in his 1992 science fiction novel “Snow Crash” to describe a shared virtual world, and what Zuck hoped would be a social-first successor to the Internet, one that Facebook could own.
Quest had been in the market for about 5 years when Apple’s Vision Pro shipped. Despite having a solid collection of apps including popular games like Beat Saber, Meta’s VR experience had pretty much topped out with fewer than 10 million active users. Cook watched that all unfold and determined that Quest’s failure to reach the mainstream was its focus on games, that another game console, even one with exciting VR experiences, wasn’t big enough for Apple ambitions. With that in mind, Apple focused the Vision Pro experience on productivity, a more PC-like and less console-like experience.
Vision Pro arrived with one exciting feature Quest didn’t have (rather, didn’t have fully built out) that could overlay digital content over the real world. It did this by compositing a live video take by its outward facing cameras with virtual overlays all displayed inside the goggles. Quest’s version of this feature was more about safety, with low resolution (at first black and white) pass through that helped users not trip over their surroundings or smack other people in the face as they waved their hand held game controllers wildly. Apple’s mixed reality experience was high fidelity and gave the impression that you were looking at the real world, only with floating objects and windows at various positions and distances.
This mixed reality experience was ideally suited to productivity. Users could launch a giant screen, floating in front of them and mirroring their Mac applications while still feeling present in the real world thanks to the high fidelity pass through. Office workers, according to Apple, would abandon their laptops and work in their Excel spreadsheets, read and write emails, and video conference all inside the Vision Pro goggles. Cook even went so far as to pose on the cover of Vanity Fair magazine with a centerfold spread, interview and article that heralded spatial computing as the successor to PCs, laptops, and smartphones.
But things didn’t quite work out that way.
One year after the $3,500 Vision Pro release in early 2024, with Apple’s entire marketing budget and about half of its massive retail footprint and staff devoted to promotion, it had only sold a few hundred thousand units.
That’s hardly Apple scale. Realizing that such an expensive face-mounted PC was not competitive with Meta’s $500 Quest (and a recently released $300 model) Cook began work on a more affordable, perhaps $2,000 device. Cook cancelled plans for ramping production on the Vision Pro and shelved plans for a Vision Pro 2.
That’s an overly long accounting of why Apple missed the boat on AI. Having blown tens of billions of dollars and a decade of R&D on a failed electric car and a failing strap-on facial PC, Apple took a wait and see approach to the new LLM-based AI revolution. By the time ChatGPT was released, Cook realized his mistake and pivoted much of Apple’s resources to integrating AI with iPhone.
Apple would attempt to distinguish itself on privacy and user value. It moved some language models to the phone itself, and for others that could not fit on the phone, a secure remote solution was built. And rather than focusing on the chatbot experience that OpenAI, Google, and Microsoft used to take early leads in AI, Apple sought to integrate AI into existing iPhone features.
Those were welcome approaches given the emerging reputation generative AI was gaining for producing art slop and hallucinating facts.
But Apple couldn’t deliver. iPhone 16 was supposed to be the debut of Apple Intelligence, the branding they’d applied to Apple’s use of AI within iPhone. When that iPhone debuted last year, it was missing most of the promised AI features that Cook assured would arrive quickly with software updates.
Nearly a year after announcing Apple Intelligence, Cook has yet to deliver most of what was promised and the latest reporting is that those features will be delayed until no sooner than the next iPhone release. (There are consumer lawsuits pending over Apple’s misleading and outright false advertising for AI features in iPhone 16.)
Part of the problem Apple faces is that it was simply late to the party. Another part of the problem is that LLM-based AI isn’t really that good. The OpenAI, Google and Microsoft assurances that LLMs would lead to true artificial intelligence, something we should all be both excited for and afraid of (see “The Terminator” movie) have not panned out and the advancements in these language models have slowed significantly, already hitting a wall on increasing value with scaling alone.
It turns out that LLMs won’t keep getting better the more text you feed them. Obfuscating this failure, AI companies are increasingly turning to fine tuning the models, dramatically increasing the compute resources devoted to user requests, and other methods to maintain progress–and more importantly to keep investors happy and pouring ever more billions into the promised but never coming artificial super intelligence.
Despite all the effort being poured into generative AI, the machines are still fundamentally not intelligent. They are very good at producing content that seems accurate. Seeming to be accurate with no confidence, much less certainty, in that accuracy is called “bullshitting,” and Apple learned the hard way that a product that hallucinates facts, or as the experts say “confabulates” is a problem. They were forced to pull one of their iPhone AI features which summarized news headlines after the BBC published an expose demonstrating headlines were not simply incomplete in those summaries, but often told the opposite story from the original.
And there’s the rub. Generative AI isn’t very good at most of what its proponents and expectant users want from it. Large (and smaller) language models are excellent at language tasks like translating content from English to Latvian, and that kind of thing. Training language models to be excellent at language translation is not terribly difficult. I helped deliver Firefox’s web page translation capabilities a few years ago and we built language models that were quite accurate without costing a fortune. Language models excel at language task but they don’t actually know anything or have the ability to truly reason about things so we get the hallucinations and confabulations when we try to use them for things like fact retrieval and even summarization.
Apple missing the boat on AI was actually a good thing, IMO. They came late and tried to deploy simple but useful features, with careful consideration for privacy and performance, and they failed. That failure helps to demonstrate the limits of LLM-based AI and saved Apple the decade and tens of billions of dollars their competitors devoted to the technology and products built on that.
As Big Tech works to integrate LLM-based AI into every product they sell us, desperately chasing use cases that will help them recoup all those billions in R&D, Apple can slow roll AI features over the next couple of years, biding time until this AI bubble bursts and everyone moves on to the “next big thing.”
Unfortunately for Apple, strap-on facial PCs are not the next big thing. This should have been apparent with Microsoft’s abandoning the AR Hololens product, Magic Leap failing to break into the consumer market, and most of all Quest’s failure to transform Facebook into more than a collection of mobile apps running on Apple and Google computers.
So where does that leave Apple?
I suspect Tim Cook’s tenure is mostly complete and he will retire before long without the product legacy he so desperately chased this last decade. He will leave Apple with the most profitable consumer technology products in the world and lots of very happy stockholders, but a reputation as a glorified accountant, not a product genius like Steve Jobs.
Apple will keep cranking out new iPhone models and adding additional services it can sell to iPhone users, but the age of Apple innovation has been over for a while and without innovation, Apple will eventually succumb to competitors that can produce new kinds of value for users. I suspect that’s decades away, given the size of Apple’s war chest, but it’s probably inevitable.
Apple had a good run, building some of the best computers, including the ones we carry in our pockets and purses, and it was first with a highly lucrative mobile app store, but attempts at innovation post iPhone and post Jobs, have mostly fallen flat. That’s too bad. The hundreds of billions of dollars Apple’s invested and will invest in tech products could have given us all something great, something post-smartphone and maybe even post-Internet. Instead we get Animojis, HomePod and a Siri that can’t even properly add calendar entries or set an alarm.
A final thought. Apple isn’t alone here. Over the last 15 years or so, Big Tech has promised the power of the blockchain and crypto currencies, the internet of things, NFTs, VR, and AI. None of this has improved our lives or computing experiences materially considering the years and hundreds of billions of dollars invested. This stagnation, to me, demonstrates two things. First, much of the tech revolution kicked off in the ’80s and ’90s has reached maturity and the companies that “won” those wars have grown large, fat and content. Second, the market dominance that Apple, Google, Microsoft, Meta, etc. have makes it extremely difficult for new competitors, even those with superior solutions, to get a foothold. The answer for both of those is anti-trust prosecution. These companies are big, powerful, dangerous, and boring. It’s time to break them all up.
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