Apple CEO Tim Cook faces mounting pressure as two of the company’s most ambitious technological bets—the Vision Pro headset and Apple Intelligence—struggle to gain traction in 2024. The Vision Pro, launched in February with a premium $3,500 price tag, has failed to capture consumer imagination despite Cook calling it “the most advanced consumer electronics device ever created.” Market share data from Counterpoint reveals a dramatic decline from 16% in Q1 2024 to just 3% by Q2, highlighting the headset’s tepid reception.
Apple Intelligence, the company’s generative AI initiative, has similarly underwhelmed. First unveiled at WWDC in June and promoted heavily at the September iPhone event, the AI features were notably absent from the iPhone 16 launch. The gradual rollout since October has revealed capabilities that tech analysts describe as unremarkable, with features like notification summarization deemed “almost useless” by prominent reviewer Marques Brownlee. The AI tools lack the innovation that competitors like Google and Microsoft have demonstrated since ChatGPT’s emergence two years ago.
The stakes are extraordinarily high for Apple, which generated $201.2 billion in iPhone sales last fiscal year but faces flattening growth. Despite maintaining a market capitalization of $3.81 trillion and rising 35% year-to-date, the company desperately needs its next breakthrough product. The Vision Pro’s challenges stem from both its prohibitive cost—Meta’s Quest Pro starts at $999.99 by comparison—and a sparse app ecosystem with only around 1,770 applications as of October.
International expansion poses additional hurdles, particularly in China where Apple’s OpenAI partnership won’t be available. Reported collaborations with Chinese tech giants Tencent, ByteDance, and Baidu have encountered accuracy issues, according to The Information. This threatens Apple’s position in a market where local competitor Huawei is gaining ground.
While Wedbush analyst Dan Ives remains optimistic that Apple Intelligence could “kick-start a new era for Cupertino,” Forrester’s Dipanjan Chatterjee notes that Apple Intelligence features aren’t “terribly unique or distinctive.” Cook himself has defended the Vision Pro as “an early adopter product,” but whether either initiative can match the transformative impact of the iPhone remains uncertain as 2025 approaches.
Key Quotes
2024 was another year where Apple failed to break out a killer new product line
Jamie MacEwan, senior media analyst at Enders Analysis, summarized Apple’s innovation struggles this year. This assessment underscores the company’s failure to replicate the transformative success of products like the iPhone despite significant investments in both AI and mixed reality technologies.
Vision Pro is too expensive for what it can do. It’s not yet at a high enough image quality to enable real work such as on spreadsheets, and it simply doesn’t have that density of apps and experiences yet
MacEwan’s critique highlights the fundamental value proposition problem facing the Vision Pro. The $3,500 price point isn’t justified by current capabilities, revealing a mismatch between Apple’s premium positioning and the product’s actual utility for consumers.
If you disaggregate the features of Apple Intelligence, you won’t find anything terribly unique or distinctive or something that hasn’t already been around for some time
Dipanjan Chatterjee, vice president and principal analyst at Forrester, delivered a damning assessment of Apple’s AI offerings. This observation is particularly significant because it suggests Apple has failed to differentiate itself in the crowded generative AI space, despite its reputation for innovation.
It’s an early adopter product, for people who want tomorrow’s technology today
Tim Cook defended the Vision Pro’s slow start in an interview with Wired, attempting to reframe expectations around the headset. This positioning suggests Apple is playing the long game, though it also acknowledges the product hasn’t achieved mainstream appeal.
Our Take
Apple’s simultaneous struggles with Vision Pro and Apple Intelligence reveal a company at a crossroads. The tech giant that revolutionized smartphones is discovering that dominance in one category doesn’t guarantee success in emerging technologies. What’s particularly telling is that Apple’s traditional strengths—elegant design, ecosystem integration, and user experience—haven’t translated into compelling advantages in either AI or mixed reality. The company’s cautious, incremental approach to Apple Intelligence contrasts sharply with the aggressive innovation from OpenAI, Google, and Microsoft, suggesting Apple may have fundamentally misread the pace of AI development. Meanwhile, the Vision Pro’s failure points to a broader industry question: is mixed reality actually solving problems consumers care about? Cook’s challenge in 2025 isn’t just turning around two products—it’s proving Apple can still define technology’s future rather than merely follow it. The company’s $3.81 trillion valuation suggests investors still believe, but patience is wearing thin.
Why This Matters
This story represents a critical inflection point for the world’s most valuable technology company and signals broader challenges in the AI and mixed reality markets. Apple’s struggles with Apple Intelligence demonstrate that even tech giants with vast resources can’t simply catch up in the rapidly evolving AI landscape—being late to generative AI has real competitive consequences. The Vision Pro’s failure to gain traction raises fundamental questions about consumer readiness for mixed reality technology and whether premium pricing strategies work for unproven product categories.
For the broader AI industry, Apple’s difficulties validate concerns that generative AI features haven’t yet delivered transformative value to everyday consumers. If Apple—known for making complex technology accessible—can’t create compelling AI experiences, it suggests the technology may still be too immature for mainstream adoption. The company’s China challenges also highlight how geopolitical tensions are fragmenting the global AI ecosystem, forcing companies to navigate complex partnerships and regulatory environments. With iPhone sales flattening, Apple’s ability to successfully pivot to AI-driven products will influence investor confidence across the entire tech sector and shape expectations for AI monetization strategies industry-wide.
Recommended Reading
For those interested in learning more about artificial intelligence, machine learning, and effective AI communication, here are some excellent resources:
Recommended Reading
Related Stories
- Apple’s Vision Pro headset brings AI to the forefront
- Apple Q4 Earnings Preview: Wall Street Sees AI Fueling iPhone Demand in 2024
- Apple Stock Price Outlook: Buy the Dip as Value Investor Warren Buffett Bets on iPhone16 in 2024
- The AI Hype Cycle: Reality Check and Future Expectations
- Wall Street Asks Big Tech: Will AI Ever Make Money?
Source: https://www.businessinsider.com/apple-intelligence-vision-pro-tim-cook-bets-2024-12