I work on an AI based product at my company. It's more in the role of assisting the user with automated tasks than in raw content creation, so it's mildly analagous to Apple Intelligence.
I often describe the LLM as "squishy" or liken it to a recalcitrant teenager who misunderstands what was asked, smarts off, or refuses to do what's asked. It's not deterministic like a piece of Python or Swift code. It's ...squishy... like trying to talk to a person.
It is really easy to put together a demo that works well, especially when people unconciously prompt in a way the AI understands. Then, when you release to the real world, and people use different phrasing or aren't specific about what they want, you get strange results. It's like the LLM tries to give a pleasing or placating answer, and if there's not enough to go on...that's when it hallucinates.
I deal with this all the time. It can take a lot of system prompt engineering to get something that delivers results to a wider audience. The effort to get all the prompting, and maybe even fine-tuning the model, correct can be a huge time sink compared to the coding.
Given that, I'm not surprised that Apple had a hiccup between demo and execution. And, I think they'll figure it out.
On the other hand, I'm an avid, daily Vision Pro user. Not all success is measurable by financial success. The Vision Pro is a technological marvel, and I think, a bit ahead of its time. More than a year later, I'm still in awe of the thing, realize it's got flaws, enjoying every improvement. Makes me feel like the Macintosh in 1984 again. Paul Meade taking over leadership on Vision Pro is a hint that development will go on.
I think we're too used to Apple hitting every ball out of the park. This isn't a failing company. This is a company that's facing reality. Not everything is a blockbuster. Apple is having its Cars 2 moment, and...look, Pixar is still making great movies, and a bad Pixar movie is still pretty darn good.