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#91 - It's (almost) here

description: A white cardboard box, open, on a table. Photo by Kelli McClintock on Unsplash.

There’s that old William Gibson line, that the future is here but it’s not evenly distributed. We can say the same about the Apple Vision Pro: the device exists and some journalists have been able to take it for a test drive, but it won’t be in consumers’ hands for another week or so.

It’s (almost) here

Did you sense a disturbance online last Friday? That was Apple opening up preorders for the Vision Pro, its mixed-reality (AR + VR) headset.

I’ve mentioned the device a few times before. (See newsletters #58, #59, #60, and #63.) There’s been plenty of speculation around whether Apple would even create a headset, how it would look, what it would do … And now that the official release date looms near, there’s the big question: will Apple be able to pull this off?

Setting expectations

Release Day is an inflection point in your product’s lifecycle. It separates your expectations from those of actual buyers. Bottomless optimism gives way to harsh reality.

This goes double for releasing tech hardware. If the thing doesn’t sell, you aren’t just left with the sunk costs of what it took to build and advertise it. You also have tons of inventory lying around. Maybe someone will steal it by mistake, or you can bury it in the desert. People will eventually find out, though, and that’s just more time in the PR penalty box for you. But I digress …

One way to set buyers’ expectations is to show people using the thing. Real people, not your company’s employees. That’s probably why Apple let a few journalists give the Vision Pro a test run. (I first saw this in Der Spiegel for the German-speakers out there. That article pointed me to coverage in The Verge if you’d prefer something in English.) Sum total: It’s fancy. It’s everything you’d expect from Apple, from the sleek design to the wow factor.

All that’s left to figure out is what will run on it.

Apps

Back in newsletter #58 I noted that the Vision pro will need a rich app ecosystem, so that people will have something to do:

Apple certainly won’t be the only company to offer AR headsets. But over time, we can expect vendors’ hardware and OS feature sets to converge. That leaves apps as the only meaningful differentiators. Especially when certain apps or games are exclusively available on one platform.

Don’t believe me? Compare a recent Android and iOS phone, side-by-side. Or try the same test with modern game consoles. Which do you prefer, and why? Consumers may hold some degree of loyalty to the hardware itself, but the real draw is what they can do on it. And that responsibility mostly falls to app and game developers to make these devices fun and useful.

I understand the Vision Pro will run existing iPad apps alongside Vision-native apps. The purists will call this cheating, a way for Apple to fluff the number of available apps, but it’s an effective way to seed the ecosystem.

Then again, the initial release won’t have Netflix, Spotify, or YouTube. You were hoping to binge-watch The Brothers Sun on the small screen? Sorry. You’re stuck having to prop up your iPad. Or drag out your laptop.

Bloomberg calls Netflix’s decision a “snub” to Apple. I’d call it a not-so-subtle middle-finger emoji in response to Apple launching its own video streaming service. I’ve pointed out elsewhere that companies could have partnered with Netflix – leaning on its decade-plus experience in operating a streaming video platform – instead of going their own way. But here we are.

I wager other developers are in a wait-and-see mode. It takes time and effort to build a device-native app, and then you have to iterate a few times before you really get a feel for the user interface and user experience (UI/UX) unique to that platform. That’s enough of a gamble that the Vision Pro will have to prove itself before those groups join the fray.

Competitive landscape

Meta’s Quest 3 is the Vision Pro’s closest competing headset. Probably the only one, realistically speaking. (I’m sure to get angry e-mails about other headsets, but let’s be honest: these are the big players right now.)

Meta certainly has first-mover advantage here. The Quest has been around longer and Meta has been able to learn from the last few years of real-world, in-the-wild usage. That also translates to first-mover disadvantage because Meta had to learn those lessons the hard way. Sometimes it’s nicer to peek over the shoulder (or the smoldering wreckage) of your predecessors than to sort things out first-hand.

The biggest lesson Meta has learned – or “has yet to learn,” even “doesn’t want to learn” – involves tying the Quest to Horizon Worlds. That metaverse play that has yet to really take off. Which is saying a lot when you consider that Meta has spent more than $36 billion trying to make it happen.

The Vision Pro has additional competition in the form of … Not Buying A Headset. My fellow consultants will recognize this as “the cost of doing nothing.” A phrase which, despite the terminology, sometimes yields a benefit. Maybe we should rename this the “return on doing nothing,” as it’s easier to see returns as being both positive and negative.

As much as we could all use some digital escapism these days, technically no one needs a Vision Pro. Weigh that alongside the economy’s rather weird state, and “do nothing” is a rather nice alternative for a lot of people. “Buy this headset and cross your fingers that it’s worthwhile. Or, don’t buy this thing and you’ll save $3,500 plus tax.”

Price

Ah yes, there’s that pesky price tag.

Money’s worth what it can buy. That leads people to frame price tags relative to other purchases: “this [whatever] that I’m looking at will cost the same as a modest vacation.” (Or “a mortgage payment” or “a semester of my kid’s college tuition.” Whatever is most on your mind these days.)

Will people actually shell out that kind of cash for a headset? Some will, yes. There’s always a market. It’s more a question of whether you can reach a large enough market to make it worth your while. The startup founders out there will know this as total addressable market, or TAM.

When you consider the number of Apple devices out there, the company’s TAM is theoretically rather large. It has an established track record of releasing pricey tech gear to an eager audience – one that has a strong attachment to the company and plenty of disposable income. (For reference, see: the Mac Pro, the iPhone 15 Pro, and any other Apple device marked “Pro.”)

Then again, thanks to widespread layoffs in the tech sector, I wager a portion of Apple’s fan base is having a second think. Which takes us back to the cost of doing nothing.

Still, for the low low cost of $3,500 (plus accessories) they can have a VR/AR headset that doesn’t require a Facebook Meta account. And that is something the Vision Pro will always have over the Quest.

Bottom line

All in all: do I think that the Vision Pro will be a success?

Hmmm.

I’m not saying that Apple will definitely win out here. I’m saying that if any company is poised to pull it off, it’s Apple.

Time will tell.

In other news…

The wrap-up

This was an issue of Block & Mortar.

Who’s behind Block & Mortar? I'm Q McCallum. I've spent the past two decades in the emerging-tech space. And I'm very interested in web3 use cases.

Credit where it's due. Big thanks to Shane Glynn for reviewing early drafts. Any mistakes that remain are mine.

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