It sounds to me like the design team fundamentally disagree on what the product should be.
Sounds like Tim is happy to ship 1 million units of a very limited product.
It sounds more like a sibling product rivalry over a fixed set of resource allocations to me. The design team wants the AR only product to succeed more and not enthusiastic about the VR aspects of the larger headset. To kneecap one product to help out another product smells like a 'rivalry'.
If put out the AR/VR product and customers/developers only push the VR features of the larger head set then that might suck all of the resources up and the lightweight AR product gets 'starved and dies'.
I suspect the expectations here are way off though. I'd be very surprised if Apple sold 0.5M AR/VR headsets, let alone 1M at the $2.5-3K price points. One rumor said that Apple was already looking at a less expensive AR/VR headset
January
" .. ,
Bloomberg says that Apple is delaying the augmented reality
Apple Glasses that it had been working on. The rollout of the Apple Glasses has been postponed indefinitely, and work on the device has been pared back. ..."
Multiple rumors have indicated that Apple's first AR/VR headset coming later this year will be priced somewhere around $3,000, but a future...
www.macrumors.com
The more AR/VR products there are to keep up to date in design the less likely there will be gobs of extra , free flowing money for the AR only product. Even more so if the AR/VR headset SoC(s) design skew the Silicon team off into a slightly different tangent that what AR lightest possible folks will slap constraints on that SoC. If the gulf is big enough there is relatively overlap between the silicon dies then that is a threat to the AR Glasses product also.
The yearly iPhone pace is a design resource consumption monster. Basically a hamster on a treadmill trying to keep up. the AR/VR products could turn into a 'black hole'.
[ I wouldn't be surprised if the lightweight AR design had not painted the SoC into such a corner that Apple might need to wait for TSMC N2 (or later) fab process to get them out of the hyper narrow battery and physical constraints. ]
If Apple delayed the AR/VR updates to the same time as the AR glasses (and kept the AR/VR headset much, much higher in price ) , then the momentum would far more so be on the AR lightweight glasses side. It would have a larger installed base.
The notion that the AR/VR headset would be a 'fail' at 1M/year run rate reminds me of the first several years of 'doom and gloom' thrown at the Apple Watch. " Oh it will never be as big a product as the iPhone so doom , fail , etc." There are a couple of vendors shipping multiples of millions of units but at what cost. Subsidizing the below costs to just shovel them out the door. Apple doesn't do that. They don't do 'loss leaders".
It is more important that the AR/VR headset be cash flow positive and profitable. If it can pay for itself then there is likely likely a design resource constraint that will block the lightweight AR headset. The upper execs pushing very hard for a lower cost AR/VR doesn't really build confidence that the higher end one is going to be able to support itself. Likely that is part of the 'push back' about pushing the lightweight AR further out to 'fix' the VR/AR part of the line up.
I think Jobs did a better job of making ID think they were almost always getting their way with the decisions and that completely spun out of control when Ive was left unchecked and unquestioned for so long. He seems to left behind lots of remnants of that same attitude. sometimes have to adapt to help out other folks that contribute to product realization.
P.S. the M-series migration on the Mac side largely left Industrial design out of the mix also.
M1 MBA ... same old case.
M1/M2/M2 Pro Mini ... same old case
MBP 13" M1/M2 ... same old case.
iMac 24 ( iPad on a stick) ... new but comatose for over two years.
Mac Studio .. largely a derived off the Mini case.
Mac Pro ... latest rumblings same old case with slight mods .
When deliberate time to market speed matters, Apple industrial design is a lability; not an asset. ( the Mac Pro has been in Rip van Winkle mode how many times over the last decade. The Mini similar boat.) ID has lots more leverage of 'demanding' that things go their way when there isn't an alternative design readily available. I think there is a small amount of "hey you are bypassing us too often" grumbling mixed in with the headsets also.
