(Preview) Apple Abandons Its Smart Glasses, Google as the Yellow Pages, LLMs and the Overton Window

Answering mailbag questions on a report that Apple has abandoned its plans for smart glasses, Google, OpenAI and advertising, why LLMs struggle with sports statistics, whether generative AI will become more acceptable in media, and a few thoughts on manufacturing, tariffs, and the de minimis exception.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Andrew Sharp?

  Hello and welcome to a free preview of Sharp Tech.

• 0:08Andrew Sharp?

  We're going to start with Jake who writes, "In light of Friday's news from Mark Gurman, I guess Ben was right in his interview with Hugo Barra last year. Apple wasn't willing to risk compromising the iPhone to make tethered AR glasses work. And I suppose it makes sense, but between this, the cancellation of the Apple Car project and lagging behind in AI, I can't help but feel like Apple's stagnating innovation, other than the fantastic M-series chips, of course," he puts in parentheses, "is going to catch up to them over the next 10 to 15 years. I know I'm saying this in the wake of record earnings, but am I missing something? Do they have anything cool on the horizon?

• 0:51Andrew Sharp?

  Or are they cementing themselves as a legacy player as the next paradigms of computing really come to bear? I'd love a quick take on this." So for people who aren't familiar, I'm going to read the news brief from Gurman at Bloomberg on Friday afternoon.

• 1:07Ben Thompson?

  Just want to compliment you for being familiar, given that this is news that didn't come down over the weekend.

• 1:12Andrew Sharp?

  That's right. I digested it Friday 5 o'clock, you know?

• 1:16Ben Thompson?

  You're an accomplished multitasker, yes.

• 1:18Andrew Sharp?

  Happy hour for some people, but I was still grinding. He wrote on Friday, "Apple has canceled a project to build advanced augmented reality glasses that would pair with its devices, marking the latest setback in its effort to create a headset that appeals to typical consumers. The company shuttered the program this week, according to people with knowledge of the move. The now canceled product would have looked like normal glasses, but include built-in displays and require a connection to a Mac," said the people who asked not to be identified because the work wasn't public. The project had been seen as a potential way forward after the weak introduction of

• 1:57Andrew Sharp?

  the Apple Vision Pro, a $3,499 model that was too cumbersome and pricey to catch on with consumers. The hope was to produce something that everyday users could embrace, but finding the right technology at the right cost has proven to be a challenge. So Ben, can you refresh people on the back and forth you had with Hugo last year? As to what Apple's considerations might be as they decide whether they want to enter this smart glasses space going forward?

• 2:31Ben Thompson?

  Yeah, it's interesting because there was actually quite a few interesting bits of information in this article. You focused on sort of the main part, which was the project as it was, was about sort of a Mac paired glasses. But what is notable and what I think that, you know, Jake is referring to is that these glasses started out as an iPhone paired idea. And what was the problem they had with the iPhone? That it would take away too much processing power. It'd take away too much battery power. There just wasn't sufficient, whereas the Mac would have more of a surplus of those things. And that is basically, to Jake's point, exactly what Hugo Barra told me, you know, in our interview last fall. Very prescient sort of take, appears to be completely right. We'll put a link in the show notes, you can go check it out.

• 3:16Ben Thompson?

  But so I think just to call out that it's, it makes sense. Like, Apple has this massive franchise that is the iPhone. Even, you know, yes, it's down 1% year over year, but that still is worth, you know, billions of dollars and, and tens of millions or hundreds of millions of iPhones. They're not going to compromise that for a, a, a smaller product. And, and that's, I think, something that I didn't fully appreciate until Hugo brought that up. And this seems like direct verification of that.

• 3:49Ben Thompson?

  That said, I find this very disappointing. And the reason I find it disappointing is I think that what, the sense you get from this article, and again, we're, we're dealing with telephone tag from Mark Gurman about a product that never watched. So it's always sort of iffy to read too much into these sorts of things. But it sort of speaks to this, this go big or go home mindset that honestly seems a little weird in, in the way of the Vision Pro, but maybe explains some of the Vision Pro's sort of lackadaisical follow-up in many respects over the years, where Apple is so accustomed to and used to shipping things at massive volume that it's like, well, if it can't be big, we're not interested.

• 4:33Andrew Sharp?

  Why bother? Right.

• 4:34Ben Thompson?

  Yeah, because to my mind, What's kind of bugs me about this is that it feels like it started out as an iPhone adjacent project. It got killed for very good reasons, which Hugo explained.

• 4:51Andrew Sharp?

  Well, wait, what were the very good reasons that they killed it as an iPhone adjacent product? Because it would seem to be like a natural outgrowth of the iPhone and people were talking about maybe Meta needs a phone. Like technically speaking, what were the concerns that Apple had about tying this to the iPhone going forward?

• 5:11Ben Thompson?

  Well, because the idea is you're pairing it to it. So you go back to the Orion glasses. It has its own sort of brick. And this is sort of the context of my conversation with Hugo, which is while you know Meta is disadvantaged because they have to have this brick you carry in your pocket. The brick contains all the battery. It contains the sort of more powerful processor. Like there's, there's processors in the lenses, but then there's a more powerful one to do the actual computing in the brick and it contains the battery. Like, like to do, so you can have a light thing on your head. And so the initial response to that is this is great, but are you really going to carry a phone and a brick?

• 5:50Andrew Sharp?

  Exactly.

• 5:50Ben Thompson?

  And wow, Apple has a big advantage because you already have a phone in your pocket. And Hugo's point is that the problem is that these devices take a lot of battery and they take a lot of processing power. And if you're powering it from the iPhone, you're making the iPhone-

• 6:08Andrew Sharp?

  You're screwing with the performance of the iPhone in that scenario.

• 6:11Ben Thompson?

  That's right.

• 6:11Andrew Sharp?

  Okay.

• 6:12Ben Thompson?

  That's right. And so, and so if you want to make a better iPhone that can do both, it's going to be bigger, it's going to be bulkier, it's going to have, need a much larger battery. And suddenly you're compromising a product that people buy on its own to support a much smaller product that only a few people are going to buy. So do you, do you have like the AR iPhone? That's this big bulky thing in your pocket? Like, like, like there, there, it's just a much more challenging question than your sort of surface level analysis would suggest. And, and if you look in here, like this project, the N107 device, they say in here, it started out with the idea being that it paired to the iPhone. And what they found is that if you pair it to the iPhone,

• 6:55Ben Thompson?

  It takes too much processing power and it takes too much battery power. And, and, and so, so the

• 7:00Andrew Sharp?

  So being right points go to Hugo for sure in the wake of last year's conversation.

• 7:05Ben Thompson?

  Yeah, absolutely. And so the, the, what, what sort of depresses me about this article is the way, again, we're depending on German sort of framing of what happened. And again, there's no one better than him, so, so we'll roll with it, but it's still an internal decision-making process, not a public product. That caveat out of the way, what you get from this is you had a team making these glasses. The iPhone team is basically like, nope, no way, not gonna happen. And so then they're like casting about for a reason to, to still do it. Like, what if we did it with the Mac, right? And, and then, you know, I don't know what the, why it got killed then. Maybe it's some aspect of, well, that market's not that big. The Mac is a legacy product, we still support. I don't know, we're just sort of theorizing at this point. And that's the part that depresses me.

• 7:51Ben Thompson?

  Not that they killed the iPhone integration, in part because Hugo primed me to understand why that was a much bigger problem than you realized. But because, and again, maybe this is personal preference speaking. This is what I want. I want a Mac accessory where I can get that, like the, the, the thing with the Vision Pro, the most compelling use case that I see for the Vision Pro right now is that widescreen Mac display, which by the way, almost everything about the Vision Pro is not necessary for a Mac external display. Like, like it doesn't need all this, its own processing, doesn't even need a battery. You could just plug it into, to the MacBook, to the MacBook Pro or whatever it might be. It doesn't need the eyesight thing.

• 8:33Ben Thompson?

  Like all these bits and pieces, it could be pared down to basically, like, like it's like the Vision Pro should not be a standalone category. If you go to apple.com and click on all the headers, it should be under displays. You have the studio display, you have the, not cinema display, what are the, the, whatever the, the crazy Pro display is.

• 8:54Andrew Sharp?

  I'm not an Apple nerd to know the tabs on the Apple website, but yeah.

• 8:58Ben Thompson?

  Well, it's okay.

• 8:59Andrew Sharp?

  Are you envisioning like a plastic? A plastic like high res display that you could use.

• 9:06Ben Thompson?

  I want the vision display right next to the studio display where you can buy this accessory for a Mac. To me, that's like, like in the you lean into the productivity use case. Apple can do all the in you all these sort of integration that they're so great at. It it actually fits in my bag. Like, what are the big problems with the Vision Pro? Where I want to retry the the virtual display thing, but I'm not going to do it at home. At home, I have four monitors. I have like a drinking coffee. I'm getting up and down like like I I but I on the road. Would I like to have a larger display? Yeah, that'd be great. Absolutely. But then there's this big bulky thing that's kind of like I got a smaller travel case. Well, not just that, but it's like a square.

• 9:51Ben Thompson?

  It doesn't like fit in my fit in my bag and and like if there was actually a device built from the ground up to be a Mac accessory, that feels like number one, it's immediately useful today. Number two, I think there's a market for that today. And number three, it's a place to start where there's an aspect of the Vision Pro that was too ambitious and it had to do like it was trying to do too many things while not doing the things that it like things that would help out like gaming.

• 10:25Andrew Sharp?

  Help people today.

• 10:25Ben Thompson?

  Yeah. Right. And and the fact that what I get from this article is number one, that they didn't go this route. I'm personally disappointed. Number two, it really feels like you have this team in Apple that really believes this technology and no one else at the company wants to support them and believes in them. And again, maybe that's justified, given the Vision Pro sales, but you don't get the sense of a whole of company effort. You get the sense of a very dedicated team pushing on this and no one else in the company is helping them out. And that's kind of what we seem to see in the market, and that's just kind of a bummer.

• 11:06Andrew Sharp?

  Well, and Mark said on the other side of the spectrum here, Apple is canceling its plans for smart glasses. Isn't this major news for Meta? The stock barely moved at all. Do you think this is major news for Meta?

• 11:21Ben Thompson?

  Well, I think the bigger question for Meta is, is this ever going to be a category?

• 11:27Andrew Sharp?

  That's the question I have. It's like, why should the stock spike years in advance of this product actually hitting shelves and gaining a following? And I don't know whether that will ever actually materialize. I think it's interesting because what you've laid out for Apple, where they tie it to the Mac and potentially see more adoption among their customers, that could be sort of an intermediate step to really like throwing their weight behind something that people use every day. Because if smart glasses are going to be like the way, like the point of integration and the way a lot of people interact with technology in their daily lives 10 years from now, then Apple could really be way

• 12:11Andrew Sharp?

  behind and just miss the boat entirely on that market if they don't have anything in the works. And so tying it to the Mac would have been kind of an interesting halfway commitment to investigating that market. But they've chosen not to do that at all and look like they're just going to double down on the iPhone ecosystem.

• 12:30Ben Thompson?

  Well, just one more thing to sort of double down on this point.

• 12:35Andrew Sharp?

  All right. And that is the end of the free preview. If you'd like to hear more from Ben and I, there are links to subscribe in the show notes, or you can also go to sharptech.fm. Either option will get you access to a personalized feed that has all the shows we do every week, plus lots more great content from Strategery and the Strategery Plus bundle. Check it out. And if you've got feedback, please email us at [email protected].