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Apple’s new product development group could shake up the tech industry

Apple’s new Vision Products Group reflects a shift away from its famed product-development process. Also: The company prepares for its fall devices, new software betas roll out, and Apple is accused of negotiating in bad faith by its first unionized retail store.

Last week in Power On: The Vision Pro will take far longer than the iPad and Apple Watch to become a major revenue contributor.

When Steve Jobs returned to Apple in the late 1990s, he threw away the company’s product-development playbook and shifted to a “functional” management structure.

That’s why the company has no iPhone or iPad division, no AirPods group and no dedicated Mac organization. Instead, Apple is organized by departments like software engineering, hardware development, machine learning, design and services. Contributions from all those groups are then funneled into new features and products.

But Apple’s most recent new product categories, including the Vision Pro headset, show that its strategy is evolving.

The Vision Pro has its own dedicated division inside of the company. The unit, run by Mike Rockwell, was dubbed the Technology Development Group, or TDG, from its inception around 2015 until the name changed in recent weeks. It’s now internally known as the Vision Products Group, or VPG.

The group doesn’t depend on Apple’s main software and hardware engineering and other departments. It has its own versions of those teams, reporting to Rockwell, in addition to ones for strategy, computer vision, content, app development and project management.

If the Vision products were developed in standard Apple fashion, the software engineering for the headset would have been led by Craig Federighi and his software engineering organization. The hardware would have been developed alongside Apple’s other devices under John Ternus, and the content arm would be tucked within Eddy Cue’s services empire.

That doesn’t mean the Vision Pro Group isn’t collaborating with other parts of Apple. It works with the design and operations teams overseen by Jeff Williams, Apple’s chief operating officer, and the Johny Srouji-led chip unit that makes M2 and R1 processors. It also relies on frameworks and other building blocks created for iOS and macOS by Federighi’s group, which is responsible for some of the headset’s developer tools as well. And it gets a helping hand from the main hardware organization.

When the Vision Pro was finally announced, people working on it believed the development team would eventually be broken up and distributed across the company — matching the approach used by Apple’s other core devices. But the recent name change seems to imply that the current structure is here to stay.

I have a few possible explanations for this choice:

  • A single team operating in a startup-like environment can move more quickly to develop a first generation product, while allowing for more secrecy, which Apple always appreciates.
  • A dedicated unit with a core team of specialists could be necessary for a product as new and complex as a mixed-reality headset.
  • Apple could be waiting for the product to become important enough to its bottom line before tying it together with its biggest moneymakers — a move that would potentially take away resources from the iPhone, iPad and Mac.

It’s also worth noting that the unit’s new name and use of a plural in “products” seems to confirm the Vision Pro is the first of many headsets to come from Apple. As I’ve reported previously, the group is already working on a lower-cost version of the device along with a second-generation Pro model.

While the Vision Pro Group puts a spotlight on this organizational evolution, this isn’t the first time that Apple has veered from its usual approach. A similar story played out for Apple’s previous new product category and is currently the case for its next major initiative.

During most of its development, the Apple Watch’s hardware and software engineering teams were placed under Williams, the COO, instead of below Apple’s senior vice presidents of hardware and software. That remains partially true today: Smartwatch software still reports to Williams, but hardware engineering has been moved under Ternus.

The company’s self-driving car team, which operates as the Special Projects Group, or SPG, is also an outlier. The unit has its own staff for software engineering, computer vision, machine learning, hardware engineering, industrial design, cloud services, project management and quality assurance. And given the complexity of building a car, that may never change.

Apple just launched new Macs, but more could be coming this fall. The company is gearing up for its busy season: It’s set to announce the iPhone 15 and 15 Pro lines in September alongside new Apple Watches. And there should be another launch in October, I’m told. The likely topic based on past history? Macs.

Now that Apple has gotten the 15-inch MacBook Air and new M2 Ultra-based Macs out the door, the October launch could feature the first Macs with M3 chips. October is too early for new high-end MacBook Pros or desktops, so the first beneficiaries of the new chip should be the next iMac, 13-inch MacBook Air and 13-inch MacBook Pro.

For those wondering about the iPad — another product that typically gets refreshed in October — I wouldn’t expect any major upgrades until the M3 iPad Pros with OLED screens arrive next year. But an iPad Air model that boosts its specifications is also in development.

Apple releases first iOS 17 public beta version and updated developer beta after security flaw discovery. With about eight weeks to go until the iPhone 15’s announcement, Apple has reached a key development stage for its latest software updates. The iOS 17 public beta is identical to the third iOS 17 developer beta from the week prior, so the public beta is mostly an indicator that Apple believes the software is now stable enough for non-developers to use. Public betas for macOS Sonoma, watchOS 10 and tvOS 17 were also released.

In other iOS news, the third developer betas were rereleased and a rapid security update for iOS 16 was issued to patch a WebKit flaw that Apple says was possibly exploited. To further complicate matters, the rapid security patch was pulled, then rereleased, after it was found to break several popular third-party apps. Even so, it’s a good reminder to update your Apple devices with security fixes as soon as possible.

Apple’s first unionized store in the US says the iPhone maker is negotiating unfairly. If you’ve been following the play-by-play of the unionization efforts at Apple over the past couple of years, this shouldn’t be too surprising. The union representing Apple’s outlet in Towson, Maryland, claims that the company is negotiating in bad faith by countering demands with existing policies, showing up late to meetings, not responding to key proposals (despite the sides tentatively agreeing on about a dozen topics) and sharing updates about the talks with employees at other retail stores. The union filed a charge with the National Labor Relations Board, while Apple maintains that it hasn’t done anything wrong.

Samsung Unpacked: July 26. Following its usual approach, Samsung is set to launch its latest devices in the weeks prior to Apple’s big iPhone unveiling in September. The Samsung event, called Unpacked, is likely to include the Galaxy Z Fold 5 and Z Flip 5, alongside a fresh tablet, multiple smartwatches and potentially a new version of its Galaxy Buds. The presentation gets underway at 7 a.m. New York time.

Apple Quarterly Earnings: Aug. 3. The company is set to release results for the fiscal third quarter, the last three-month period before the iPhone 15 is introduced. The quarter wasn’t packed with big revenue drivers, but it did see the release of new Macs: the 15-inch MacBook Air and M2 Ultra Mac Pro, as well as the M2 Ultra and M2 Max Mac Studios. Wall Street is projecting revenue of about $81 billion, which would mark the third straight year-over-year decline. Growth is expected to resume in the coming quarters. Bloobmerg

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