The rise and fall of Apple Vision Pro

Back in 2023, Tim Cook, CEO of Apple, famously got up on the stage at Apple's headquarters in Cupertino and announced that a new era in computing was coming. It was going to be called spatial computing, and it was going to come courtesy of a $3,500 product that was going to be a headset for your eyes called the Apple Vision Pro. Things took off like crazy. Pre-orders sold out within 18 minutes. Early tech heads and reviewers announced it as the most impressive piece of hardware they had ever seen on a consumer level. But within a year, they would slash the marketing budget by 95%. Start disabling and dismantling the entire team that had built the thing. And the leader who had been in charge of the Vision Pro, he was being reassigned to something and a wave that Apple had totally missed— artificial intelligence. In the end, Apple spent $20 billion on a product development that turns out nobody actually wanted. It's worth asking, how did everything go so wrong so fast for the Vision Pro after starting out? What seemed like pretty well. This video is the rise and fall of the Vision Pro. By the way, I turn every single one of these walk and talks into a deeper dive document that you can download from my website if you want to learn more, girdley.com/youtube. Tech is generally understood by understanding the waves of technology adoption that happens. And so that means CEOs like Apple CEO Tim Cook, they get obsessed over figuring out what the next platform's going to be, whether it was the internet, the web, or mobile. As early as 2016, CEO of Apple Tim Cook was famously telling reporters that augmented reality and virtual reality would be the next wave of computing and everything would be built on it. In 2015, Apple had hired a guy named Mike Rockwell who had come from Dolby Labs— those guys who make the audio stuff— with the idea of creating an internal skunkworks project called the Technology Development Group. The idea was to build Apple's own headset for virtual reality. Apple invested a staggering amount of money, which they could do, by the way, because they make a staggering amount of money. Apple itself is one of the greatest wealth creation machines in the history of capitalism. They hired thousands of people to work on the new headset project. People in Cupertino at their headquarters, Israel, and a bunch of other places too. Estimates by outside observers say they spent $10 to $20 billion on AR and VR alone. For the Vision Pro. And you can see that in their financials for Apple. Their annual spending on R&D ballooned from $8 billion to $35 billion by 2023, and the Vision Pro was reportedly a big driver of that. While legendary designers, guys like Jony Ive and folks like that, came and went inside of Apple, one thing stayed consistent. That consistency was Tim Cook's vision. There was money being put into VR and AR because Tim Cook believed in it so much.

I do think that a significant portion of the population will have AR experiences every day, almost like eating 3 meals a day. So AR, I think, is going to become really big.

Tim Cook came in live in Apple by on the supply chain, not on the product vision side. It's been one of the things that's been, well, kind of tough for Tim the whole way. As you read articles, there's always one thing in the background, the shadow of Steve Jobs. Tim was an amazing operator working underneath Steve. Steve was the visionary. He was the guy who saw the original Apple II, the Macintosh, and eventually the iPhone. So while Tim was hell-bent on doing his best Steve Jobs impression to see the future and bring Apple to the forefront in the next kind of version of a computing platform in VR and AR, something else was happening in the background that Apple would miss entirely. But we'll get to that in a minute. So on June 5th, 2023, at WWDC, the Worldwide Developer Conference for Apple, Tim announced this next new platform for Apple, and he compared it to something that would rival the original Macintosh and the original iPhone. This was an entirely new platform for computing, one that would change the world. And that was partially done because Apple was releasing something with some of the most jaw-dropping consumer technology specs ever seen. Early users of the Apple Vision Pro talked about it like living through a science fiction novel. There was incredible amount of detail, 23 million pixels, eye tracking, and even a screen on the outside that even though you weren't actually seeing through the screen, made it seem for other people around you like you were actually in the room and looking out at them. Just crazy. Apple had gone to Sony and got them to custom produce these OLED screens that were inside of each— basically for each eye inside the device. They cost $350 each to produce them, and they were so complex that Sony would only be able to produce 500,000 of them a year. Turns out, well, that limitation wouldn't prove to be a problem. The price tag was $3,500. It was the most expensive consumer device that Apple had ever produced. In January 2024, the pre-orders sold out within 18 minutes. They moved 200,000 Vision Pros within 10 days. And much like the original iPhone release, tech reviewers and buyers were lined up outside of the Apple Stores. Felt like, well, the good old times again. But then you started to see crazy stuff on social media. People taking these devices in just kind of random places. Like, I remember this one of two dudes wearing Vision Pros at the airport. And another one of them wearing it at a restaurant, not talking to each other. Reviewers were similarly impressed. The specs were so cool that this was just like feeling like you were wearing the future. In fact, half of the Fortune 100 were reportedly buying the Vision Pros to try to test them out inside of their organizations. And here's the thing about Apple. They have a proven playbook, which was they waited for others to go out first to market, whether that's with cell phones or MP3 players or even PCs for that matter. And in their case, they would wait for somebody else to put that thing out there— smartwatches— and then they come along and they release their own version of it that's integrated in the Apple ecosystem and is a proven category that people know exists and they buy it. And that's what they theoretically had done here with the headset category, right? These headsets that existed for years, Meta had had their version through their Oculus acquisition, HTC had them, but something was different this time. They had followed that exact same playbook. That playbook would let Apple down. To dig in and understand why that was, you have to understand the category of VR and AR headsets. And here was Apple taking the category and pushing it to a technological extreme. There was a huge battery pack that weighed a couple pounds, and the thing was so heavy that in order to make it work, it felt like there was an iPad strapped to your face. And early reviewers started to notice after using the thing for a while that it hurt their head. That's how heavy the damn thing was. And the first sign of weakness started to show up in the form of returns from the early buyers. Been a few weeks, they're bringing it back. The problem was they couldn't figure out what to use the Vision Pro to do. And a big cause of that was because there was a lack of apps. If you go look at what your iPhone really succeeds at doing well, it's at running other people's apps. Most of our time spent on it is running third-party stuff from Facebook, Meta, heck, anything else that we're using. The main value is in the apps that run it. The time of launch, Vision OS, the operating system that ran the Vision Pro, had 600 apps. But the big problem was the big providers, they weren't building apps for it. There wasn't a Facebook app, there wasn't a Netflix app, and there wasn't a YouTube app. By mid-2025, there would only be about 3,000 apps for the Vision Pro. It was finally starting to catch up, it seemed. But here's the difference. The iPhone has millions of apps. 3,000, it's not much. IDC suggested that the Vision Pro sold 390,000 units in 2024. Which should be like, okay, right? Like, not a huge failure. Well, here's the problem: the iPhone that year sold 220 million units. In other words, the Vision Pro was basically a rounding error for Apple. Tim had suggested this was the future of personal computing, but made even worse, 30% of sales were going to businesses. They were the ones who maybe saw a reason to use it. You and me, we couldn't figure it out. Upon teardown, reviewers and spec folks would realize that the Vision Pro was selling at $3,500 and by most estimates cost nearly $2,000 apiece for Apple to produce. And when you spread that out over so few units being bought and sold, well, basically the economics are terrible for Apple. By Q4 2025, Apple had slashed production. Things were looking that bleak. They slashed their marketing budget by 95% and they sold just 45,000 units in that quarter. Basically, like, there's some Best Buys by themselves that sell more cell phones than that in a given holiday market. While Apple was doing all this stuff focused on the AR/VR component and looking at the world through the lens of, well, better hardware will work and we'll just figure out after that, something else was going on in the market. And that was in 2022, OpenAI released ChatGPT, and that would go on to become the fastest product to reach 100 million users in the history of computing. And to be fair, Apple wasn't the only one that missed this revolution. Meta, Google, and even Microsoft scrambled to catch up and felt like they had missed the wave. Microsoft even went so far as to pour $13 billion as an investment into OpenAI at the time. And to show how laser-focused Apple was on the VR revolution, their AI chief, the guy behind Siri and AI for them, John Andrea, basically announced that he didn't think products like ChatGPT and chatbots like that had any future or provided any value to users. And while Siri, Apple's version of a chatbot, had been around since 2011, and by the way, Steve Jobs had totally promoted that. Believed that voice was the future of computing.

We had a small search company called Siri. I don't know if I would describe Siri as a search company. What are they in? How would you describe it? They're in the AI area. So you bought them for their engineers and their patents and their knowledge about AI more broadly? We like what they do a lot.

It's that around the language. So much as a joke that most of us, including me, have Siri turned off on our phones. And to make matters worse, A dictate came down from above in 2023. Apple engineers would be prohibited from using other third-party models inside of Apple products. The problem was the models from OpenAI, Anthropic, and others, they were light years ahead of what Apple had internally. By 2024, Apple was in full catch-up mode. They'd realized they'd missed the boat. Their demo at the time of a future level of what they called Apple Intelligence would do all this different stuff. It had Siri answering your email and booking stuff for you. The problem was it was all just made up. And here was Apple caught so flat-footed they broke one of their cardinal rules, which was never demo anything that's a fake one. Here they were out there showing consumers something that didn't even have any possibility of being real anytime soon. And here's the deal, by 2026, where we are today, Apple still hasn't shipped any of that stuff. They're publicly announcing that it was taking them longer than they thought to make it real. And what's the final indignity in late 2025? Apple announced that they were going to be licensing Google's AI engine Gemini to power Siri and run the version of Apple Intelligence. And here's Apple, the company that famously brought us the Apple IIe, the Macintosh, the Apple Watch, the iPod, the iPhone, and because they got off track with the Vision Pro, are having to license technology from their biggest rival, Google, from just down the street. There had been huge kind of proposals inside of Apple to do a lighter weight version of the Vision Pro called the Vision Air. That's all been since canceled. Old. Only selling 390,000 units of a VR headset, that'll do that to you. March 2025, Mike Rockwell, the star inside of Apple who had been recruited to fix and build the Vision Pro, he was pulled off his mission. He's got to go out there and fix Siri and get Apple in the game in AI. And I think if you look at what's actually happening in AR and VR and where people are actually adopting things, the answer is over in the Meta camp. If you look at them, they've partnered with Ray-Ban to build actual smart glasses that people want to buy. Heck, I own 'em. Like most people, I'm interested in a VR and AR platform that will help me experience the real world better. And here was Apple having tried to sell me a $3,500 device that would have me even more isolated from the rest of the world. And I, like most people, didn't see any reason to buy it. Meta, led by Zuckerberg, famously spent $83 billion trying to create the metaverse around the Oculus platform where people would strap a VR headset onto their face. But then they've made more money than the entirety of all VR headsets in history by basically just releasing a bare-bones version of the Meta glasses built on Ray-Ban frames that just basically do some few things pretty darn well. Here's the deal with technology. The ones that get sold are the ones that make real life better. And in this case, consumer devices like the Vision Pro that isolate you even more from your fellow man, like, they tend to go nowhere. And that's the lesson Meta learned, and that's the lesson Apple learned the hard way. But as a business owner, the interesting tale here is around Apple following their playbook that always worked for them of being like a first follower or a second follower into a big established growing market and then trying to dominate it. The problem of what let them down here is they ran their playbook and they were so attached to it that they forgot to question the fundamental components of what went into it. And the core one was that they need to go into a market that was rapidly growing and that was valuable to people. And in this case, they started to create the same type of Oculus headset, just better and more Apple-ized than Meta had. The deal was nobody actually wanted that stuff. So unlike watches, which are a proven huge market, phones, which are a proven huge market, iPods, Macintoshes, PCs, every single wave where Apple's had a hit, it's because they got an old market and just did a better version of things people wanted. In this case, they were just building a better version of things that nobody wanted. So the lesson being, if you or I has a playbook, make sure you question all the assumptions. And don't let our emotions get in the way. Because in this case, you can see what happens if your passions overcome your better judgment.