As I'm fairly conservative –quite the understatement– about the possible size and interest of the AR/VR market, I wanted to checklist everything positive about Apple's Vision Pro. The first reason is that it's always interesting to see both sides of a discussion for yourself, but also, we need to remind ourselves that Apple is not like Tesla announcing a Cybertruck, humanoid robots, or neural link systems. Apple never deals in vaporware. They always ship.
So what are the objective strengths and, in some cases, unfair advantages on Apple's side?
- Apple wage war on hardware and chip design. They don't manufacture 100% of their component, and some mission-critical ones are usually subcontracted to Samsung or Sony (screens, displays, cameras), but still, they master their hardware architecture from top to bottom. And they have years (decades by Intel standards now) of advance in chip design with their "M" and now "R" series.
- Unique OS capabilities honed on many different form factors. From the watch to the traditional computer, the TV box, the car, or the tablet, Apple has unique skills in creating the core software layer for an incredible number of form factors, usages, and hardware. And it isn't easy to come up with many companies that could beat them at offering a more robust developer platform to produce software and content. This is a very short list of two names. Microsoft and Google. Both of them without the same chip design integration as Apple, for now.
- A robust network effect with their large community of developers. Another older key advantage Apple has invested tons of time and money into is certainly its developers' community. Remember Steve Balmer's ill-fated "Developers! Developers! Developers!". This is what we are talking about. Not enough developers, and you have a product without any reason to buy it. In doubt, check how's the Xbox or the Playstation doing on VR games.
- The timing might be rather smart. Given all of the above, Apple might be earlier than usual to the market, but not too early. If only because they have at least six months before shipping anything, and they probably secured many major content producers a year ago or so (we only know about Disney for now). In any case, the message has been vastly broadcasted. This is a first iteration for early adopters, a launching pad that should (will?) open the door to more mass-consumer versions down the line.
- With AR above VR, the positioning of the experience is aggressively smart. Not forcing everyone to adopt a central 'metaverse' as a hub to do anything with the device, but a simple OS that can be shaped to multiple usages, many of them in AR and not forced VR, is interesting. Zuckerberg politely dumped the idea of people alone on their couches after Apple's keynote, but forcing everyone into a dystopian and cartoonish virtual world seems way more difficult to swallow. And let's not forget that Apple keeps on invalidating Meta's business model (high-level privacy, no activity tracking beyond what the OS requires to function, etc.)
- Worst case scenario, it's an affordable loss for Apple. Probably the smartest thing to consider is that if anything goes as Apple is currently planning, this device will only add 0.1% to its total turnover. Apple has less at stake here than Meta. The Vision Pro can just become a Mac Pro-category device that will give 100 or 300K units to the creative industry every year, and nothing bad will happen for the trillion-dollar market cap company. Cook's ego will be bruised for sure, but he doesn't seem to be the type that would care much.
- Lastly, this is now pushing everyone else in the market to be reactive, which means blundering half-baked product ideas in production to comply with a new global timetable. Don't follow Apple, and you won't catch up. Follow, and you will always be several steps behind. Ouch.
Am I now convinced this is a masterstroke from Apple? Not in the slightest. I'm still on the side of "There's no large-scale consumer market for AR/VR, and B2B is not Apple's forte." That being said, these guys are anything but dumb. The fact that they take an unprecedented risk with the Vision Pro is quite fascinating, and I've yet to read or hear anything that would make sense and justify this move.
Let's see one year from now where this goes... 🍿
