A well established dynamic in business is the “flywheel” or “virtuous cycle”. Yes, there is a chicken and egg problem here. That doesn’t in any way make it impossible to get the flywheel going. You just need to invest time, money, and energy to support/subsidize each part of the cycle.

The hardware is probably being sold near to cost, thus speeding up that side of the adoption cycle. And courting developers will allow them to build up the app ecosystem.