Yahoo Finance Apple’s vision extends far beyond its cumbersome new headset
When Apple boss Tim Cook took to the stage at the tech giant’s California headquarters on Monday night, he knew the significance of the moment.
After almost 12 years at the helm of the world’s most valuable company, Cook was finally unveiling a radical new product – the Vision Pro, a $3,500 (£2,800) headset that Apple says will change computing forever.
The device, which resembles a pair of ski goggles, combines virtual and augmented reality. In plain English, that means people can either overlay apps and videos on top of the real world or view pure virtual worlds through the headset.
Controlled through hand gestures, voice commands and even eye tracking, the Vision Pro is designed to transform the way we watch films, play games, make video calls and work.
62-year-old Cook described the goggles as a first move into “spatial computing”. So far, the Vision Pro does not offer any new services, but rather a new way of experiencing them. As Cook put it, it is the “first Apple product you look through, not at”.
While the launch event was impressive, many observers were left asking the question: why exactly would I use this?
Apple shares dropped during the launch event and fell 1pc at the opening of the stock market in New York on Tuesday morning. Investors are clearly concerned about the tech goliath’s latest big bet.
Virtual reality is by no means a new technology. Efforts to develop a headset date back to Nasa in the early 1970s, while users of Nintendo’s Virtual Boy device complained of nausea and headaches when it launched in 1995.
Google was forced to abandon plans for its own augmented reality glasses because of a lack of interest and, more recently, Mark Zuckerberg has been trying to push his own version of virtual reality, dubbed the metaverse, without much success.
The Vision Pro – a long-running and costly project that has seen Apple file more than 5,000 patent applications – is the most advanced iteration of the technology to date.
Telecoms analyst Paolo Pescatore says: “Apple has worked tirelessly to ensure it offers a seamless and consistent, intuitive experience that goes a step further than other products in the market, and this is no exception.”
Yet to truly be transformative, Apple will have to convince people to put a computer on their face. Can it succeed where so many others have failed?
The device has attracted widespread acclaim from analysts and product reviews sites who were given an early hands-on with it. Those who have tried the Vision Pro praise the device’s spectacular display quality and sleek design.
However, Apple’s new goggles are not without their flaws. The Vision Pro requires an external battery pack that has to be carried in the wearer’s pocket and offers only two hours of use.
The company is hoping that its track-record of launching paradigm shifting innovations and sleek, intuitive product design will tempt consumers to try its device where others have fallen flat.
Leo Gebbie, an analyst at CCS Insight, says: “Apple’s advantage over rivals is that the operating system on the new headset will be immediately familiar to existing users, and much of their favourite content, services and apps are all instantly available.
“It’s a logical extension to everything Apple has built over the last decade.”
More concerning, however, is the eye-watering price tag. At $3,499, the Vision Pro will cost more than twice as much as the iPhone 14 Pro Max, the company’s most expensive smartphone, and will be well out of reach for most people.
Inevitably, this means the headset is likely to achieve only modest sales, rather than mass-market appeal. Analysts at Wedbush estimate the company will sell just 150,000 units in the first year, rising to 1 million in the second year if prices come down.
UBS predicts that the Vision Pro could generate $6bn in revenue for the company in its first year of sales. That’s less than half the $12.4bn in revenues it pulled in from the iPad in its first year.
“Don’t expect Apple to sell millions of these – the manufacturing capacity isn’t there, for a start,” says Joseph Teasdale, of Enders Analysis.
“Success will be the early adopters finding new and useful ways to fit the device into their daily lives, and developers building a software ecosystem for it. Failure will be a few hundred thousand Vision Pros languishing in drawers, or being dragged out at parties as a novelty.”
Shares in Apple surged to an all-time high ahead of Monday’s launch show, giving the company a market valuation of $2.9 trillion. However, a higher-than-expected price and late release date (the device will only launch in 2024) left many investors reassessing their bets.
Developers will be among the first customers to receive the device and Apple hopes they will create a whole new slate of apps and programmes to expand the experience.
Analysts at Wedbush called the share price wobble a “knee-jerk reaction”.
They wrote: “We believe ultimately Apple is now building out its own AI ecosystem within its iOS developer community, starting with the launch of this product that will lead to more applications and use cases over the coming years.”
Ultimately, Apple wants to refine the cumbersome headset into reality-enhancing glasses that would embed technology into our field of vision and – as a result – every waking moment of our lives.
Getting to that stage will require significant advances in technology, including whittling down displays, processors and batteries into microscopic sizes.
More important, however, is the societal change required to usher in this new world vision. Are people really ready to live and work in their own goggle-encased universes?
Reviewers have raised concerns about the appetite for this kind of tech, describing the experience of putting on the headset as “oddly lonely”. Another branded the Vision Pro’s EyeSight feature – which displays the user’s eyes on the external display – as “creepy”.
New technology is often met with uncertainty, or even aversion. But while the revolutionary benefits of the iPhone were self-evident, Apple will have to work much harder to build demand for the Vision Pro.
The venture has echoes of Mark Zuckerberg’s push into the metaverse, which has raised eyebrows among investors and consumers alike. Unlike Meta, however, Apple has not bet the house on an uncertain technology, and continued strong iPhone sales mean it can take a patient approach.
“This is going to take a lot of time and money to get right, but the end vision is pretty compelling,” says Teasdale. “Apple’s latest product gives us just a hint of something that could one day replace the other screens in our lives.”
