Tim Cook has an uphill battle in 2025 after Apple’s bets on the Vision Pro and AI didn’t pan out

• Tim Cook placed big bets on the Vision Pro and Apple Intelligence in 2024.
• iPhone sales are flattening, prompting Apple to search for new revenue drivers.
• However, early signs suggest Apple’s bets on the two futuristic technologies are struggling.

When Tim Cook joined Apple in the late nineties, he would have had little idea he’d be leading two of its most momentous bets as CEO more than a quarter century later: the Vision Pro and Apple Intelligence.

Their stuttering starts, however, have thrown the success of the high-stakes moves into question — and given Cook an uphill battle to turn them around in 2025.

Vision Pro, a huge bet on a world of headset wearers enthralled by virtual and augmented reality, has received a tepid response. And Apple’s take on the generative AI trend that has swept Silicon Valley since the introduction of ChatGPT has also lagged behind rival offerings.

“2024 was another year where Apple failed to break out a killer new product line,” said Jamie MacEwan, senior media analyst at Enders Analysis, a research firm. Failure to turn these futuristic platforms into generation-defining products could have long-lasting implications.

Though Apple has turned the iPhone into a cash cow — iPhone net sales generated $201.2 billion in its last fiscal year — sales have started to flatten, leaving the Cupertino-based giant puzzling over its next big thing.

Apple remains a powerful force, of course. It has risen more than 35% year-to-date to a market capitalization of $3.81 trillion, trading bragging rights of being the world’s most valuable company with Microsoft and Nvidia in the climb to its all-time high.

But much of its long-term future could hinge on its success in turning its new visionary technologies into offerings with the star power of the iPhone.

A blurred vision

When the Vision Pro first went on sale in February, Apple was ready to convince everyone that what they were seeing was the future. As Cook put it ahead of the launch, the Vision Pro marked “the most advanced consumer electronics device ever created.”

That’s been a tougher sell than he’d like. For one, owning Apple’s futuristic headset — which combines virtual and augmented reality to create a “spatial computing” experience that blends the digital with the physical — comes with a hefty price tag of $3,500.

It’s an eye-watering cost that offers one explanation for why Vision Pro reception has been so lackluster. Headsets from rival firms offer a much cheaper entry point for consumers looking to try out a still-nascent technology. Meta’s Quest Pro, for instance, starts at $999.99.

Apple does not share specific sales numbers for the Vision Pro, but third-party estimates suggest they have been low. According to data firm Counterpoint, the 16% share of the mixed reality market it secured in the first quarter of 2024 dropped to 3% by the second quarter.

The other problem has been a lack of a killer app.

At launch, Apple said the Vision Pro would come with “more than 600 apps and games” built specifically for the headset. It bet consumers would use the device’s “infinite canvas” to watch movies or productivity tools. New apps have been slow to come, however.

According to a report from The Wall Street Journal in October, developers have been slow to make apps for the headset, with just 10 apps added to the Vision Pro App Store in September, bringing it to a total at the time of around 1,770, per figures from data firm Appfigures.

“Vision Pro is too expensive for what it can do,” MacEwan said. “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.”

In an interview with Wired published this month, Cook pushed back on the criticisms around the Vision Pro’s slow start by arguing that it is “an early adopter product, for people who want tomorrow’s technology today.”

Playing catch-up on AI

Cook’s other big bet this year, Apple Intelligence, has also had its fair share of issues.

Apple’s generative AI push, first introduced at its WWDC event in June and then hyped up at its annual iPhone event in September, was supposed to mark Apple as a leader in a field that has been dominated by rivals like Google and Microsoft since ChatGPT’s launch two years ago.

While Apple talked up several of its generative AI features — such as writing aids and a partnership with OpenAI to integrate ChatGPT into its iPhone, iPad, and Mac operating systems — a lack of standout features and a slow rollout has taken the air out of the launch.

The launch of the iPhone 16 in September came with no Apple Intelligence features, though software updates since then have slowly started to drop AI tools into devices. Much more is expected in 2025, but impressions around existing features aren’t instilling confidence in them.

In November, high-profile tech reviewer Marques Brownlee posted a video to YouTube dissecting the features currently available from Apple Intelligence. His takeaway? Apple’s big promise to shake-up products with AI “is starting to fade.”

A summarizing feature, Brownlee said, doesn’t work for some longer documents and is “almost useless” when used to summarize notifications from apps. The Image Playground tool, which creates cartoon-like images, is of “debatable usefulness,” he said.

“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,” said Dipanjan Chatterjee, vice president and principal analyst at Forrester.

The company is also facing challenges in introducing top AI features to an important overseas market: China. Apple’s OpenAI partnership will not be available to consumers in China, which has reportedly led Apple to explore partnerships with Chinese tech firms Tencent, ByteDance, and Baidu to bring ChatGPT-like features to iPhones there.

According to The Information, its tie-up with Baidu is running into problems with accuracy when responding to prompts. With Apple facing increasing competition from local companies like Huawei in the smartphone market, failure to roll out AI tools in China risks hurting sales in the country.

An uncertain road ahead

Apple, for its part, is exercising caution about the future of its new products.

In its latest annual report, the company warned that its “new products, services and technologies may replace or supersede existing offerings and may produce lower revenues and lower profit margins.”

Others remain confident Apple can succeed in at least some of its new bets. In a research note last month, Dan Ives, a senior analyst at Wedbush, offered a vote of confidence in Apple Intelligence, suggesting its continued rollout “over the next few months kick-starts a new era for Cupertino.”

Forrester’s Chatterjee, meanwhile, sees “much of Apple Intelligence’s success in the near term being measured by “what it can deliver in iPhone upgrades.” He’s not convinced that it’ll trigger an “upgrade super cycle” anytime soon.

Whether the AI rollout or the Vision Pro can match the hype surrounding them is up in the air. Cook’s mission for 2025 and beyond is to try and get them to land.