Apple's Hardware Is Waiting on Someone Else's Code

In a warehouse somewhere, finished Apple TV 4Ks, HomePod 3s, HomePod mini 2s, and a smart display called HomePad sit boxed and ready. They are not waiting on chips or manufacturing. They are waiting on AI software updates ^[1]. Hardware is no longer the gate at Apple. Someone else's code is. The Vision Pro is dead. After the M5 model sold roughly 600,000 units at $3,499, Apple halted development and redistributed the Vision Products Group's software developers to Siri and AI projects ^[2]. Mike Rockwell, the Vision Pro's architect, has been running the Siri team since March 2025. The engineers who built Apple's most ambitious hardware are now working on an assistant powered by Google's Gemini — a 1.2-trillion-parameter model Apple licenses under a contract signed in January 2026, despite branding it "Apple Intelligence Foundational Models" ^[3][4]. The smart glasses, codenamed N50, were supposed to arrive in late 2026. They have been delayed to a June 2027 reveal and end-2027 release, explicitly because of "development challenges with the revamped Siri and Apple Intelligence" ^[5][6]. A display-less pair of glasses, priced between $200 and $500, cannot ship because the AI that would make them useful is not ready — and that AI is not Apple's. Even Apple's internal tools lean on competitors. The internal assistant "Enchanté" combines Apple's own models with "approved models from Anthropic and Google" ^[7]. The company cannot fully power its own workflows without external AI. The financial picture sharpens the contradiction. In fiscal 2025, Apple returned $104 billion to shareholders ^[8]. Its capital expenditure was $12.7 billion — a fraction of the $700 billion-plus collectively spent by Alphabet, Amazon, Microsoft, and Meta on AI infrastructure ^[9]. CFO Kevan Parekh described the approach as a "hybrid" model: rent third-party cloud capacity, use Apple's own chips for the rest. Services now account for 39% of revenue and are projected to reach 50% by 2031 ^[10]. In July, Apple launched a device leasing program with Klarna, turning hardware ownership into a recurring payment stream ^[11]. The model is shifting from manufacturer to landlord. Apple still builds silicon. The in-house C2 modem for the iPhone 18 Pro replaces Qualcomm chips and enables automatic satellite connectivity ^[12]. The iPhone 18 Pro itself is being redesigned around AI requirements — the largest batteries in iPhone history, 12GB of RAM, the A20 Pro on TSMC's 2nm process ^[13]. But the hardware engineering is increasingly in service of running other companies' AI. The talent that could reduce this dependency is leaving. AI chief John Giannandrea departed in December 2025. Senior executive Stuart Bowers joined Google DeepMind. Researchers Yinfei Yang, Haoxuan You, Bailin Wang, and Zirui Wang left for Meta or startups. Internal morale declined specifically because Apple decided to outsource core AI technology to Google, with dozens more leaving for OpenAI and Meta over the prior six months ^[14]. In June, Apple agreed to a $250 million settlement for falsely advertising Siri and Apple Intelligence features that were unavailable at launch, affecting roughly 36 million customers ^[15]. The features had been marketed before the Google-Gemini-powered overhaul was ready. Then, last week, Apple sued OpenAI. The complaint alleges poaching of engineers to steal semiconductor and hardware trade secrets ^[16]. The company whose ChatGPT serves as Siri's fallback — the model Siri "unexpectedly reverts to" during internal testing when its own engine fails ^[3] — is now being sued by Apple for hiring the engineers Apple could not keep.

Apple should not be permitted to use a baseless and pretextual lawsuit to make up for its shortcomings in the market for talent. — OpenAI