Apple’s Counterkill and the AI Hardware Graveyard: Why Giants Are Never Toppled by Their Imitators?

Today, I want to calmly review a blood-and-tears lesson that has just occurred yet is already written into commercial history.

Right now, if you take a trip to Huaqiangbei in Shenzhen and look closely at those dimly lit stalls and warehouses, you will see a striking scene: corners piled high with electronic waste being sold off by the pound. These dust-covered items are not knock-off phones. They are the first-generation independent AI hardware that were worshipped as idols in the tech circle between 2024 and 2025, effortlessly raising hundreds of millions of dollars in funding — like that once-trendy AI pin you attach to your lapel, or that neon-orange pocket box that claimed it would replace all apps.

I am the Financial Veteran from the Wisdom Walkers channel. Once upon a time, the founders of these startups stood in the spotlight, proudly declaring they would end the smartphone era. But how was the script of reality actually written? When Apple deeply integrated the immensely powerful Apple Intelligence into iOS in 2026, rolling it out for free to over a billion iPhones, these independent AI hardware companies disintegrated in an instant. With valuations decimated, massive layoffs, and bankruptcy liquidations, they became incredibly expensive jokes in the annals of business history.

Why couldn’t disruptors backed by top-tier venture capital withstand a single free system upgrade from a giant? Many attribute this to Apple’s deep pockets and technological heritage. But that is merely the surface. From the perspective of my thirty-year risk management career, during which I have audited tens of thousands of enterprises, we might as well use the Four Forces Model today to review this textbook commercial slaughter. This is fundamentally not a victory of technology, but a ruthless game of human nature and economic laws.

To understand this game, we must see through the core forces driving the market.

The first force is the Expansion Force that startups attempt to manufacture using thin innovation.

Those teams building AI hardware desperately generated hype, trying to forge an entirely new hardware category with a single, flimsy AI feature. They naively believed that as long as the large language models ran fast enough and the concepts were cool enough, consumers would foot the bill.

But they ignored a second, incredibly cold force: the immense Contraction Force of consumer switching habits.

Human beings are inherently lazy. Asking you to clip a heavy AI pin to your chest in addition to carrying your phone before leaving the house, to adapt to an entirely new set of interactions, and even to pay a monthly subscription fee for it — this extra hassle, once the initial novelty wears off, becomes an unbearable burden.

This is the iron law of business: high-frequency behavior inevitably crushes low-frequency behavior. Those AI hardware entrepreneurs, wielding extremely low-frequency supplementary wearables to challenge the smartphone — a device humans unlock over a hundred times a day — were challenging the baseline of human nature from the very beginning.

Speaking of this, let me share a true story from my own experience. Over a decade ago, when I was still the vice president of a bank, the founder of an independent car GPS navigation company came to me for a loan. He drew diagrams on a whiteboard, spending two hours explaining how brilliant his navigation algorithms were and how precise his satellite positioning was. But after reviewing his financial statements, I vetoed that massive loan. I asked him only one question at the time: If one day Apple or Samsung directly stuffs a navigation map into the phone as a free app, who will still buy your GPS device? Will users be willing to spend thousands more to hang a plastic screen in their car, or will they prefer to directly use the constantly updated phone that never leaves their hands?

He argued vehemently back then that phone screens were too small and their chips too weak to ever replace professional navigation. The result? A few years later, as smartphones conquered the world, the standalone car GPS market was wiped out, and that founder remains on the defaulters’ blacklist to this day.

History is always strikingly similar. Whether it was the standalone GPS and MP3 players of the past, or the independent AI pocket devices of today, the core of the tragedy has never changed: a single-point innovation divorced from a high-frequency channel is like building an isolated island in the vast ocean. When the tsunami hits, it does not even leave a ripple.

Understanding this underlying logic, let us look at Apple’s open conspiracy. Here, Apple demonstrated the third force: the Balance Force based on its massive ecological moat.

With over a billion, perhaps even more than two billion active devices globally, Apple actually holds the most terrifying monopoly on distribution channels. The current tech arena has long entered a brutally zero-sum game for existing market share. The pool of resources is finite, and user attention is strictly limited. For startups to vainly attempt to dig a new pool outside of Apple’s ecosystem to divert traffic is nothing short of a fool’s errand.

Apple does not fight to be the first to launch at all. In the first two years of the AI frenzy, it watched coldly as startup teams engaged in trial and error, burning cash to educate the market. Once the technological path became clear and large models could run smoothly on edge devices, the elephant turned around. It did not go and build some Apple Pin. Instead, in a major system update, it directly pushed a background feature. It injected AI capabilities like a capillary network into your photo albums, notes, and text messages.

This was a bloodless harvest. Apple used its channel monopoly to reduce the so-called disruptive hardware that startups had painstakingly pursued into a readily available free software feature. You worked tirelessly to build a horse-drawn carriage, and they simply paved a high-speed railway right next to it, announcing that rides are free. This kind of asymmetric strike from a higher dimension defies all reason.

So, as ordinary entrepreneurs or professionals, what kind of cognitive leap can we achieve after seeing this? In this era dominated by giants, how should we find our own Evolution Force?

Please remember this survival guide from an old veteran: never attempt to reinvent the wheel in a track where a giant has already established immensely mature infrastructure.

True disruption often occurs at the fringes, what economics calls disruptive innovation. Facing a behemoth like Apple, what we must learn is not to compete with it on hardware, but to shift our personal logic of choice — learn to be symbiotic, to be the water seller who provides unique value.

During the American Gold Rush, most of those who went bankrupt trying to mine gold ended up dead in the wilderness; the ones who truly made a fortune were those selling shovels, water, and jeans next to the gold mines.

If you are an entrepreneur, do not think about how to build an AI device to overthrow Apple. You should think about how to integrate existing AI large models into your niche industry to help traditional enterprises cut their labor costs in half. If you are a professional, do not fret over whether new technology will steal your job. You should parasitize this AI ecosystem and become the person in your company who is best at using these new tools to solve specific problems.

The mistake of the dead independent hardware companies was that they wanted to be the mine owners and monopolize the gold mine. But smart people know: the giants built the highway to collect tolls; you must never smash their tollbooths. What you need to do is open a thriving auto repair shop or a roadside diner at the highway exit. The giants handle the grand narratives; we handle solving the specific pain points of ordinary people.

As the ancient wisdom suggests, the ultimate achiever does not possess innate supernatural abilities, but rather excels at leveraging external tools and environments to reach the pinnacle. [Note 1] Instead of clashing head-on in the giant’s main battlefield, treat the infrastructure built by the giant as a tailwind to climb and co-exist. This is the destiny of our times, and it is also the highest wisdom of survival.

I am the Financial Veteran of Finsages. In this era where truth is scarce, I am willing to deconstruct the maze for you. If you wish to find cognitive certainty amidst future turbulence, please follow me. Let us be the ones holding the torch in the cold wasteland of data. The world is magnificent, and I will see you at the top.[Note 1: This sentiment echoes a foundational principle in Chinese philosophical thought, articulated by Xunzi in his classic “Encouraging Learning” (Quan Xue): “君子生非异也，善假于物也” (The gentleman by birth is not different from other men; he is just good at utilizing things).]