Tech Giants Envision Future Beyond Smartphones
On September 25, 2024, Mark Zuckerberg stood on stage at Meta Connect and unveiled Orion, a pair of augmented reality glasses that weighed just 98 grams yet packed more computing ambition than a decade’s worth of smartphone launches. The prototype featured a 70-degree field of view through silicon carbide lenses, microLED projectors thinner than human hair, and an electromagnetic wristband for gesture control. Each unit cost approximately $10,000 to manufacture. Zuckerberg called it “the most advanced pair of AR glasses ever made.” He didn’t call it a product.
That distinction matters. While Meta showcased what could replace the smartphone, Apple was quietly scaling back production of its $3,500 Vision Pro headset after shipping fewer than 420,000 units in 2024—missing initial projections by nearly half. Samsung reported its strongest Galaxy S-series volume since 2019, leaning heavily into AI features while the global smartphone market grew a modest 7% to reach 1.22 billion units. The smartphone isn’t dying. But the companies that built their empires on rectangular touchscreens are betting $150 billion collectively that something else will eventually take its place.
The question isn’t whether tech giants envision a future beyond smartphones. They’re already building it. The question is whether anyone outside Silicon Valley boardrooms actually wants it.
The Smartphone Peak Paradox
The numbers tell an uncomfortable story for an industry built on perpetual growth. Global smartphone shipments in 2024 marked a recovery after two consecutive years of decline, but the 1.22 billion units sold represent a figure still 20% below the 2017 peak. Apple and Samsung, the two dominant players, both saw shipments decline by 1% despite the overall market growing. The average smartphone replacement cycle has stretched to 3.5 years in developed markets, up from 2.7 years in 2021.
This isn’t a temporary slump—it’s market maturity expressing itself in data. In the United States, Europe, and East Asia, smartphone penetration exceeds 85%. Nearly everyone who needs a phone has one. The upgrade triggers that once drove consistent sales have weakened. A better camera or faster processor no longer compels consumers to trade in year-old devices when their current phone handles messaging, navigation, and video streaming without complaint.
The economic model that sustained smartphone dominance for fifteen years is eroding. Average selling prices have climbed above $440 globally, up from $332 in 2017, even as the performance gap between premium and mid-range devices narrows. Consumers are increasingly opting for budget alternatives that deliver 80% of the flagship experience at 40% of the cost. China’s smartphone market, the world’s largest, grew just 4% in 2024 despite being a primary growth target for manufacturers.
For companies that generate hundreds of billions in revenue from smartphone ecosystems, these trends represent an existential pressure. Apple derives more than 50% of its total revenue from iPhone sales, while Services—the App Store, iCloud, Apple Music—contributes another significant portion tied directly to iPhone dependency. Samsung’s mobile division generates similar proportions of its consumer business. When the platform stagnates, diversification stops being optional.
The response has been a coordinated pivot toward what the industry calls “spatial computing,” “ambient intelligence,” and “post-mobile experiences.” These terms describe overlapping visions of technology that surrounds users rather than sitting in their pockets. But translating vision into viable products has proven significantly more difficult than the marketing suggests.
The New Computing Frontiers: AR, AI, and the Hardware Graveyard
Meta’s Orion prototype represents one endpoint of post-smartphone thinking: lightweight glasses that overlay digital information on the physical world. The technical specifications are genuinely impressive. The 70-degree field of view exceeds competitors like Snap Spectacles (46 degrees) and matches the Magic Leap 2 headset while maintaining a form factor that resembles actual eyeglasses. The silicon carbide lenses enable high refractive index optics in a compact design, paired with advanced waveguides featuring nanoscale 3D structures that project images directly into the wearer’s field of vision.
Yet Meta won’t sell Orion. The company admits manufacturing costs make commercial viability impossible at present. Even optimistic projections for a consumer version—dubbed “Artemis” in internal roadmaps—target 2027 at the earliest, with an expected price point closer to high-end smartphones or laptops. Translation: $1,000 minimum, possibly $1,500. For a product category consumers haven’t yet demonstrated they want.
Apple’s approach offers a contrasting cautionary tale. The Vision Pro launched in February 2024 with extensive marketing positioning it as the future of spatial computing. By October, multiple sources reported that Apple had instructed suppliers to wind down production, with warehouses holding approximately 200,000 unsold units from an initial manufacturing run of 500,000 to 600,000 devices. Analysts estimated sales of roughly 370,000 units through the first three quarters, well below Apple’s revised forecast of 400,000 to 450,000—itself a dramatic cut from the original 700,000 to 800,000 projection.
The reasons for underperformance are instructive. At $3,500, the Vision Pro priced itself into a narrow market of wealthy early adopters and enterprise customers. But price alone doesn’t explain the tepid response. The device weighs enough to cause discomfort during extended use. Its battery life, tethered via cable to an external pack, limits mobility. Most critically, the software ecosystem remains sparse. The same problem that plagued Google Glass a decade earlier—lacking a compelling use case beyond novelty—persists.
If high-end AR headsets struggle to find audiences, the low-end wearable AI category has fared catastrophically. The Humane AI Pin, launched in April 2024 at $699 plus a mandatory $24 monthly subscription, promised to free users from smartphone screens through voice-controlled AI assistance and a palm-projected laser display. Reviews were universally scathing. The device responded slowly, misunderstood commands, overheated during use, and struggled with basic tasks like setting timers. The laser projector proved nearly invisible in outdoor lighting. Battery life lasted two to four hours.
By August 2024, returns exceeded $1 million in value. In October, the company issued a recall for the charging case due to fire hazard risks from lithium batteries. In February 2025, Humane announced it was selling most assets to HP for $116 million—half the $230 million it had raised—and discontinuing the AI Pin entirely. The product achieved roughly 10% of its projected 100,000 first-year sales.
The Rabbit R1, a $199 AI companion device launched weeks after the Humane Pin, avoided complete failure by positioning itself as a smartphone accessory rather than replacement. But neither device solved the fundamental problem: voice-controlled AI in 2024 remains too unreliable for primary computing. Language models hallucinate, misinterpret context, and require connectivity for complex queries. The processing power needed for on-device AI inference at acceptable speeds still exceeds what current wearable form factors can accommodate without overheating or draining batteries in minutes.
Brain-computer interfaces represent the most speculative frontier. Neuralink’s 2024 human trials garnered headlines, but the technology remains years—possibly decades—from consumer applications. Surgical implantation presents obvious barriers to mass adoption. Non-invasive alternatives like Meta’s EMG wristband for Orion show more immediate promise, but they still require users to learn new interaction paradigms for tasks their smartphones already handle effortlessly.
The pattern across these attempts reveals a common failure mode: technology demonstrations that look impressive in controlled environments but collapse under the complexity and unpredictability of real-world use. Smartphones succeeded because they delivered immediate, obvious utility—communication, internet access, photography—in a single pocketable device. The challengers offer fragmented capabilities that require users to change ingrained behaviors without delivering meaningfully superior experiences.
The Ecosystem Trap: Why Apple Can’t Quit the iPhone
Apple faces a particularly acute version of the post-smartphone dilemma. The company’s Services division—App Store, iCloud, Apple Music, Apple TV+, Apple Pay—generated $96.2 billion in fiscal 2024. Nearly all of this revenue depends on iPhone users remaining within Apple’s ecosystem. The average iPhone user spends approximately $28 per month on Apple services, a figure that grows each year as the company adds new subscription offerings.
This creates a strategic contradiction. Apple must invest in potential iPhone replacements to prepare for an eventual decline in smartphone relevance, but success in replacing the iPhone would undermine the ecosystem model that generates its highest-margin revenue. Vision Pro sales, even if they had met optimistic projections, would have generated perhaps $2.5 billion in hardware revenue—less than 3% of iPhone’s contribution.
The company’s approach reflects this tension. Apple continues refining the iPhone while hedging with spatial computing devices that complement rather than replace the phone. AirPods add functionality. Apple Watch extends the ecosystem. Vision Pro, despite spatial computing marketing, requires an iPhone for initial setup and works best when integrated with other Apple devices. Tim Cook has repeatedly emphasized that the iPhone remains central to Apple’s strategy, with new technologies adding capabilities rather than replacing the core product.
This stands in stark contrast to Meta’s positioning. Zuckerberg can pursue aggressive smartphone replacement strategies because Meta doesn’t sell smartphones. The company’s revenue derives from advertising across platforms. AR glasses that keep users engaged in Meta’s services—Instagram, Facebook, WhatsApp—serve business objectives regardless of whether they displace iPhones. Meta can afford to lose billions annually on Reality Labs research because the advertising business remains profitable enough to subsidize the experiments.
Google occupies a middle position. Android dominates global smartphone operating systems with roughly 70% market share, but Google itself manufactures only a small fraction of Android devices. The company earns revenue primarily through search and advertising, making it theoretically willing to obsolete smartphones if a better advertising delivery mechanism emerges. Yet Google’s history of hardware ventures—Glass, Stadia, various messaging apps—suggests organizational challenges in executing hardware strategies at consumer scale.
Samsung faces different constraints. As a major hardware manufacturer, the company profits from both smartphone sales and the components inside them. The Galaxy ecosystem generates revenue, but Samsung lacks the services infrastructure of Apple or the advertising machine of Meta and Google. This makes Samsung particularly vulnerable to smartphone market stagnation but less capable of funding speculative alternatives. The company’s strategy emphasizes incremental innovation—foldable phones, advanced cameras, AI features—rather than paradigm shifts.
The asymmetric business models mean tech giants aren’t competing on equal terms to define the post-smartphone future. Meta can invest most aggressively because it risks the least. Apple must move cautiously to protect existing revenue. Samsung needs smartphones to remain relevant longer than its competitors do. Google’s hardware ambitions consistently underperform its software capabilities. These misaligned incentives complicate predictions about which approach will ultimately succeed.
The Business Model Crisis: When App Stores Don’t Translate
Smartphones created a remarkably lucrative business model: high-margin hardware sales supplemented by recurring revenue from app ecosystems, subscriptions, and digital services. Apple’s App Store alone generated an estimated $1.1 trillion in total transactions during 2023, with the company taking a 15-30% commission on many transactions. Google Play operates similarly, though with lower absolute values given Android’s fragmentation across manufacturers.
This model depends on consumers purchasing apps, subscribing to services, and making in-app purchases through centralized stores. The economics work because smartphones became essential devices people use dozens of times daily for diverse purposes—communication, entertainment, productivity, commerce. The large user base and high engagement create network effects that attract developers, who create more apps, which attract more users.
None of the proposed smartphone replacements replicates this virtuous cycle. AR glasses don’t have established app stores. The limited user base—even optimistic projections suggest single-digit millions of units for first-generation devices—doesn’t justify developer investment in creating AR-specific applications. Wearable AI devices like the Humane Pin attempted to bypass app ecosystems entirely through voice-controlled services, but this eliminated the third-party developer contributions that make platforms valuable.
The subscription fatigue phenomenon compounds the challenge. Consumers already pay for Netflix, Spotify, cloud storage, gaming services, and productivity software. Adding $24 per month for a Humane Pin subscription on top of existing expenses triggered immediate resistance. Even successful wearables like Apple Watch or fitness trackers position themselves as accessories to smartphones, not standalone products requiring separate data plans and subscriptions.
Hardware margins present another structural problem. Smartphones command premium prices because consumers recognize their utility. Apple sells hundreds of millions of iPhones annually at $800 to $1,200 because buyers understand they’re purchasing a device that will serve as their primary computer, camera, and communication tool for multiple years. Convincing consumers to pay similar amounts for AR glasses with limited functionality and unproven use cases requires overcoming significant skepticism—skepticism the Vision Pro’s underwhelming sales confirm.
The infrastructure costs of maintaining post-smartphone ecosystems further strain economics. Meta’s Reality Labs division reported $16.1 billion in losses during 2024 while generating just $1.9 billion in revenue, primarily from Quest VR headset sales. The company is effectively paying $14 billion annually to build AR/VR capabilities that may eventually replace some smartphone usage. This works only because Meta’s advertising business remains enormously profitable. Most companies can’t sustain such losses indefinitely while waiting for markets to materialize.
Enterprise markets offer a potential alternative revenue source. Vision Pro found more traction among businesses using spatial computing for design review, training simulations, and remote collaboration than among consumers watching movies. Microsoft’s HoloLens similarly targets industrial applications—manufacturing, healthcare, architecture—where the $3,500 price point falls within acceptable budgets for productivity-enhancing tools. But enterprise markets can’t match the scale of consumer smartphone adoption, limiting the total addressable market.
The business model question boils down to this: can companies build sustainable, scalable revenue streams from post-smartphone products before the costs of development exceed the patience of investors and the durability of balance sheets? Meta’s deep pockets buy time. Apple’s Services moat provides cushion. But absent a clear path to profitability, the entire category risks remaining a perpetual science project.
Regulatory and Social Headwinds: The Problems Technology Can’t Solve
Even if technical challenges resolve and business models materialize, AR glasses and wearable AI devices face social and regulatory obstacles that constrain deployment. The European Union’s Digital Markets Act explicitly targets large platforms, requiring interoperability and limiting bundling practices that could give incumbents advantages in new device categories. The regulatory framework that allowed Apple to tightly integrate hardware and services may not extend to AR glasses ecosystems.
Privacy concerns loom particularly large for always-on cameras and microphones. Google Glass failed partly because it triggered visceral discomfort—people didn’t want to be recorded without consent, and Glass wearers faced social backlash. Meta’s Ray-Ban smart glasses include a small LED indicator when recording, but skepticism remains about whether companies will respect privacy in practice. European privacy regulations require explicit consent for recording, creating legal compliance complexities for devices designed to capture continuous environmental data for AI processing.
The right-to-repair movement adds another constraint. Legislation in multiple jurisdictions now mandates that manufacturers provide spare parts, repair documentation, and reasonable access to device servicing. The EU’s Eco-Design directive requires five-year spare parts availability and repairability labeling. Complex devices like AR glasses, with intricate optical systems and custom silicon, present manufacturing and support challenges that increase costs.
E-waste regulations similarly pressure manufacturers. Extended producer responsibility laws make companies liable for end-of-life device recycling. Smartphones already generate significant e-waste—an estimated 5.3 billion phones were discarded in 2022. Adding categories of complex wearable devices accelerates this problem unless manufacturers design for longevity and material recovery, which increases upfront costs.
Social acceptance represents the most unpredictable variable. Smartphones became ubiquitous because they’re socially neutral—checking your phone in public carries no stigma. AR glasses invoke comparisons to surveillance devices. Talking to AI assistants in public spaces makes users self-conscious. The Humane Pin’s palm-projected laser display proved especially problematic, appearing both awkward and ineffective in social contexts.
Workplace policies will shape adoption patterns. Many employers already restrict smartphone use during work hours or in sensitive areas. AR glasses with continuous recording capabilities face outright bans in environments where confidentiality matters—hospitals, law firms, government facilities. Even absent formal policies, colleagues may object to sharing spaces with someone wearing always-on recording devices.
The addiction and mental health concerns that plague smartphones may intensify with more immersive technologies. Critics argue that AR glasses make screen addiction worse by making digital content inescapable, constantly overlaying the physical environment with notifications, advertisements, and distractions. Children’s exposure to immersive technologies raises developmental questions that regulatory bodies will need to address.
These factors combine to create adoption friction independent of technical capabilities or economic viability. A perfectly engineered AR device priced competitively could still fail if consumers reject it on privacy grounds, regulators restrict its use, or social norms make wearing it uncomfortable. Technology companies control engineering and business strategy. They can’t unilaterally overcome social and political resistance.
The 2025-2030 Outlook: Ambitious Roadmaps Meet Market Reality
The timeline for post-smartphone devices remains deliberately vague across most manufacturers. Meta targets consumer AR glasses around 2027, but internal roadmaps reportedly show contingencies for delays based on component costs and manufacturing scalability. The current $10,000-per-unit cost of Orion needs to drop by at least 80% before commercial viability. Achieving this requires breakthroughs in microLED manufacturing, silicon carbide lens production, and waveguide fabrication—all supply chain challenges without guaranteed solutions.
Apple’s public statements emphasize iterative improvement rather than revolutionary replacement. The company continues developing Vision Pro successors while reportedly exploring lower-cost versions targeting $2,000 price points. A spec-bumped Vision Pro 2 with M5 chip integration might arrive in late 2025, but volume expectations remain modest. Apple’s pattern suggests patience—releasing products when confident in ecosystem maturity rather than rushing to be first.
Samsung and other Android manufacturers face coordination challenges. Google’s Android XR initiative, developed with Samsung and Qualcomm, aims to create a unified platform for mixed reality devices similar to Android’s smartphone role. But Android’s fragmentation across hardware partners complicates this strategy. Without tight integration of hardware, software, and services, creating compelling AR experiences becomes harder. The announcement of Android XR partnerships doesn’t guarantee successful products, as Google’s hardware track record demonstrates.
Chinese manufacturers—Xiaomi, Oppo, Vivo—have home market advantages but face geopolitical obstacles in Western markets. Export restrictions on advanced semiconductors and optical components limit their access to the cutting-edge technology required for competitive AR devices. Domestic Chinese AR development may proceed independently, potentially creating a bifurcated global market with incompatible ecosystems.
The realistic near-term scenario involves continuation of current patterns: incremental smartphone evolution supplemented by accessory devices that extend rather than replace phones. AR glasses that work only when tethered to smartphones. AI wearables that handle specific tasks while phones manage complex operations. Gradual feature migration as battery technology, processing efficiency, and component miniaturization improve.
The 2025-2030 window will likely see first-generation consumer AR glasses reach market at premium prices with limited capabilities. Early adopters and enterprise customers will provide feedback that shapes second and third generations. But mass adoption—the installed base measured in hundreds of millions that would genuinely threaten smartphone dominance—remains beyond this horizon absent unexpected breakthroughs.
Smartphones retain massive advantages: mature ecosystems with millions of apps, established user behaviors, competitive pricing across market segments, reliable performance, and day-long battery life. Displacing them requires not just technical parity but meaningful superiority that justifies learning new interaction models and paying premium prices for less-proven technology. That bar is high.
The irony is that companies betting billions on a post-smartphone future still depend completely on smartphone profits to fund that future. Meta’s Reality Labs losses run into tens of billions. Meta can sustain this because advertising revenue from smartphone-based apps generates the cash. The chicken-and-egg problem persists: developing credible smartphone alternatives requires resources that only successful smartphone businesses can provide. But success in replacement threatens the revenue sources funding the research.
Perhaps the companies betting most heavily on post-smartphone computing will pioneer the technologies that eventually succeed, but only after competitors without smartphone dependencies commercialize them effectively. Or perhaps smartphones will simply evolve, incorporating AR displays and AI capabilities while retaining the form factors and interaction models users already understand. The “beyond smartphones” future might arrive through gradual enhancement rather than dramatic replacement.
What’s certain is that multiple expensive product launches over the next five years will test whether consumers share Silicon Valley’s vision. The wreckage of the Humane AI Pin and the underwhelming Vision Pro reception suggest that enthusiasm for disruption doesn’t automatically translate into market success. Tech giants may envision a future beyond smartphones. But getting there requires navigating treacherous terrain where technical capability, business viability, and consumer desire must simultaneously align—a convergence that remains frustratingly elusive.
Frequently Asked Questions
What will replace smartphones in the future?
Augmented reality glasses and wearable AI devices are the leading candidates, but no technology has demonstrated clear superiority over smartphones. AR glasses like Meta’s Orion prototype and Apple’s Vision Pro represent the most developed alternatives, though commercial viability remains years away due to manufacturing costs and limited use cases.
Why are tech companies investing in post-smartphone technology?
Smartphone markets in developed countries have reached saturation, with replacement cycles extending beyond three years. Major manufacturers see minimal growth potential in traditional smartphones and are diversifying into emerging categories where they can establish early leadership positions.
When will AR glasses become mainstream?
Most realistic projections target 2027-2030 for first-generation consumer AR glasses at prices around $1,000-$1,500. Mass adoption comparable to smartphone penetration likely requires another decade, dependent on significant improvements in battery life, manufacturing costs, and software ecosystems.
What happened to the Humane AI Pin?
The $699 Humane AI Pin launched in April 2024 but failed due to unreliable AI responses, poor battery life (2-4 hours), overheating, and a laser display that was nearly invisible outdoors. The device achieved only 10% of projected sales and was discontinued in February 2025 when HP acquired Humane’s assets for $116 million.
How much did Meta’s Orion AR glasses cost to make?
Each Meta Orion prototype costs approximately $10,000 to manufacture, primarily due to expensive silicon carbide lenses, microLED projectors, and advanced waveguide technology. Meta needs to reduce costs by at least 80% before considering commercial production.
Why did Apple Vision Pro sales disappoint?
The Vision Pro sold approximately 370,000-420,000 units in 2024, well below Apple’s initial 700,000-800,000 forecast. The $3,500 price point, limited content ecosystem, weight-induced discomfort during extended use, and lack of compelling use cases beyond early adopters contributed to weak demand.
Are smartphones declining in sales?
Smartphone shipments grew 7% in 2024 to 1.22 billion units after two consecutive years of decline, indicating market stabilization rather than collapse. However, shipments remain 20% below the 2017 peak, and replacement cycles have extended to 3.5 years in developed markets, constraining growth.
What are the biggest challenges for AR glasses?
Technical challenges include battery life, thermal management, manufacturing cost reduction, and display quality. Business challenges involve creating viable app ecosystems and sustainable revenue models. Social challenges include privacy concerns about always-on cameras and user discomfort wearing recording devices in public.
Will smartphones ever become obsolete?
Smartphones are unlikely to become obsolete in the next decade. More probable is gradual evolution, with new form factors like AR glasses emerging as complementary devices before potentially replacing smartphones as primary computing devices over a 15-20 year horizon—if technical, economic, and social challenges resolve favorably.
Which company is closest to launching consumer AR glasses?
Meta appears furthest along with its Orion technology, targeting a 2027 consumer release. Apple continues developing Vision Pro iterations and lower-cost alternatives. However, all major manufacturers face similar challenges in reducing costs and building compelling software ecosystems, making predictions uncertain.
Key Takeaways
The post-smartphone computing landscape remains far more uncertain than marketing narratives suggest. While tech giants have invested over $150 billion collectively in AR glasses, AI wearables, and spatial computing platforms, commercial success has proven elusive. Meta’s $10,000-per-unit Orion prototype and Apple’s underwhelming Vision Pro sales demonstrate that technical capability alone doesn’t create viable products.
The smartphone replacement challenge differs fundamentally from previous technology transitions. Smartphones succeeded by offering immediate, obvious utility—consolidating multiple devices into a single, pocketable form factor. Proposed alternatives fragment functionality across multiple devices, require learning new interaction paradigms, and don’t yet deliver meaningfully superior experiences for everyday tasks. The Humane AI Pin’s spectacular failure illustrates the gap between Silicon Valley ambition and consumer reality.
Economic models that sustained smartphone profitability don’t automatically translate to new form factors. App Store ecosystems, high-margin hardware sales, and subscription services all depend on large user bases and high engagement levels. Early AR and wearable devices lack the install base to attract third-party developers, creating chicken-and-egg problems where limited software constrains adoption, which discourages further software investment.
Regulatory and social obstacles compound technical challenges. Privacy concerns about always-on recording, right-to-repair legislation, e-waste regulations, and workplace policies all constrain deployment options for immersive technologies. Social acceptance—fundamental to wearable technology success—remains uncertain, as Google Glass’s failure a decade ago demonstrated and current AR devices haven’t definitively overcome.
The companies betting most heavily on post-smartphone futures paradoxically depend on continued smartphone dominance to fund their research. Meta’s Reality Labs can sustain $16 billion annual losses only because Facebook and Instagram remain profitable on smartphone screens. Apple must protect iPhone revenues that subsidize speculative projects. This creates strategic contradictions where success in replacement threatens the revenue sources enabling the research. The next five years will determine whether current investments pioneer successful new categories or simply repeat expensive failures in pursuit of markets that may never materialize at scale.
