$3500 + tax device won't scale. It's not something that most people have a budget for.
This is what long term planning looks like. You need to prime your audience to buy something, before they actually want to go out and buy it.
A few hundred millions wasted in the development of this device is pocket change for Apple.
When the Apple Watch was first unveiled, my opinion was something along the lines of, "What, I'm so lazy that I'll spend $400 to avoid pulling my phone out of my pocket?"
When the AirPods were released, I probably said something like, "What, I'm supposed to hate a little wire so much that I'll spend $200 to eliminate it and now I have another thing to charge? Hah!"
But with both of these, after enough exposure and seeing people I know use them consistently, I caved. And yeah, no way I'll go back to wired ear buds when I'm running or walking the dog. No way I'll ditch this watch now.
And it cost an unheard of $900 in 2023 money. The internet was awash in people howling that nobody would ever pay that much for a phone.
Yet here we are today.
(I still have my launch day iPhone!)
iPhone sales by year:
2007: 1.3m
2015: 231m
= 17669.2% increase over 8 years
Considering it's the only model with the cell tech in the name (there's no iPhone 5G), I think even Apple knew the first model was a ground laying device, not the "pave the world" model the subsequent versions would become. They still weren't even committed to the app store yet.