Apple Vision Pro: Everyone Is Missing The Big Picture

Summary:

• The Apple Vision Pro is a groundbreaking spatial computing platform that has the potential to revolutionize various industries, from entertainment to remote work.
• Despite initial criticisms, the Vision Pro’s capabilities and integration with the Apple ecosystem make it an attractive option for a wide range of users, including movie enthusiasts, remote workers, and gamers.
• Apple’s technological lead and extensive patent protection will likely keep competition at bay for a significant period, allowing the company to capitalize on the growing demand for spatial computing experiences.
• However, everyone seems to be missing this critical strategic point!

It seems like almost everyone is missing the real strategic importance of the Apple (NASDAQ:AAPL) Vision Pro. It’s not a VR/AR headset – it’s the computing platform of the future.

I won’t spend time repeating the features and capabilities of the Apple Vision Pro. You can watch the video of its introduction to get those – and I suggest you do. I will keep it simple and focus on the significant point: The Vision Pro is the spatial computing platform of the future, and everybody will want to buy one! I’ll first discuss computing platforms, then explain why everyone will want to buy a Vision Pro, discuss the potential impact of the Vision Pro on Apple’s revenue, and then explain briefly why Apple will not have significant competition for a long time.

Most people expected Apple to announce a VR/AR headset device like Microsoft HoloLens 2, the Meta Quest 2, Meta Quest Pro, or the PlayStation VR 2. So, they looked at Vision Pro with that expectation. They were critical of the price. They kept wanting to know what would be the killer app. They positioned it primarily as a gaming device. They wondered why people would buy it, especially at that price. They are missing the real big point here!

The Apple Vision Pro is an entirely new computing platform

Apple has been successful because it follows a platform strategy. It builds common layers of technology, electronics, software applications, and services. Then it leverages these platform layers into new computing platform variations.

Apple Vision Pro is an entirely new computing platform. The MAC introduced a new type of personal computing platform. The iPhone created a mobile computing platform. The Vision Pro is creating a spatial computing platform.

The Original Mac Personal Computing Platform

The original Mac, released in 1984, introduced a new personal computing platform. It was a groundbreaking product introducing several innovative features to the personal computer market. However, it also faced criticism on various fronts. The Macintosh used a different operating system and had a graphical user interface (GUI), which meant that software written for other popular platforms, such as MS-DOS, could not run on the Mac without significant modification. The original Macintosh was not designed to be easily expandable or upgradable and had limited storage capacity. Finally, it was relatively expensive at $2,495 (more than $6,000 today). Despite these criticisms, Macintosh eventually changed the personal computer industry and laid the foundation for future advancements in GUI-based systems.

The Original iPhone Mobile Computing Platform

The iPhone created the mobile computing platform. Like the Mac, there was a lot of criticism. When the original iPhone was launched in 2007, it created the smartphone industry, introducing several innovative features. However, it also faced many criticisms. One of the most prominent criticisms of the original iPhone was its lack of a physical keyboard. At the time, smartphones, like the Blackberry, typically had physical keyboards that users were accustomed to, and many people found it difficult to adjust to the iPhone’s virtual keyboard. Initially, the original iPhone did not support third-party applications. Users were limited to the built-in apps provided by Apple, such as Mail, Safari, and Messages. And once again, it was too expensive. The original iPhone was priced at $499 for the 4GB model and $599 for the 8GB model. This high price was significantly more expensive than other smartphones available at the time. Today many people pay almost $1,200 for a high-end iPhone. Despite these criticisms, the original iPhone proved to be a game-changer, setting the stage for the dominance of touchscreens, app ecosystems, and a new era of mobile computing.

The Vision Pro Spatial Computing Platform

The Vision Pro is creating a spatial computing platform. And it may very well be the computing platform of the future. You need to step back and envision how it will change the way we use computers for work, entertainment, collaboration, and communication.

The Vision Pro essentially creates an unlimited visual workspace, using all of the space you can see in front of you and, by turning your head, all of the 360-degree area surrounding you. Like your regular vision, you can view your objects in 3-D. You can choose to populate your vision with multiple applications, or you can choose to enlarge one to fill your entire field of vision.

The Vision Pro enables you to integrate the applications you see within your real environment to the extent you want. This can be helpful in many specific applications.

Everyone expects that there needs to be a single killer app to make Vision Pro successful. They are missing the point here again; it will leverage all the apps in the Apple ecosystem, enabling them to be improved for its spatial platform.

Most criticisms argue that the Vision Pro has limited use and few people will buy it, especially at the current $3,500 price. Here again, they are missing the point. It provides new, unimagined capabilities that everyone will want it. Let’s imagine some of the possibilities.

Who will want spatial computing? The answer is everyone

Vision Pro’s spatial computing platform creates an infinite canvas for a wide variety of apps, as large as you want and as many as can fill the 360 degrees around you.

Who would want to watch a movie on a theater-sized screen in 3-D with spatial audio in your home?

Some people may still want to spend $6,000 on a “much smaller” 85-inch TV with a $3,000 sound system. The Vision Pro provides a bigger viewing screen and is less expensive, and you can even watch it in 3-D! If you live in an apartment, you can fill your limited space with a big screen without taking up any real space. The answer to the question is: Everybody who enjoys watching movies and videos will want a Vision Pro instead of a larger TV. It will cannibalize the big-screen TV market.

Who would want to use spatial computing to replace your laptop when you work from home?

You can have an infinite workspace not limited to your laptop screen. You can multitask like never before by turning your head, including your primary job, communications, side projects, and entertainment, all within your view. The answer to the question is: Everyone who works from home will eventually want a Vision Pro. I can see the requests to buy them flooding into corporate IT departments already.

Who would want to enhance video conference to life-size?

You can replace video conferencing with a life-size experience like people are in the room. It’s a little like the holograms on Star Wars — only better. The answer to the question is: Eventually, everyone will want to upgrade to this type of experience with the Vision Pro.

Who would want to capture precious family moments with panoramic 3-D to savor them forever like you were still there?

With the Vision Pro, you can record an event, such as a birth, birthday, graduation, family gathering, or reunion, in panoramic 3-D video with spatial audio. People will still use their iPhones to capture memories for a while, but eventually, they will see what others are doing with the Vision Pro. The answer to the question is: Every family will ultimately want a Vision Pro.

Who would want the experience of traveling worldwide without leaving their home?

Sure, you can argue that it’s better to travel in person. But few people have the time and money to travel everywhere. Maybe instead of a single cruise, you can buy a Vision Pro and get the experience of traveling everywhere with all of the sights full size or larger and in 3-D. It will be very close to the real thing. The answer to the question is: Everybody who wants to travel more but doesn’t have the money or time will buy a Vision Pro.

What video game player will want to play their games on an enormous 3-D screen that fills their entire field of vision and immerses them in the game?

Video games can be played on laptops, TVs, even large TVs, and iPhones now, which are very good. Many video game players spend thousands of dollars on their gaming equipment and may be satisfied with what they have, but eventually, they will want to enter the games with spatial computing. The answer to the question is: Eventually, every serious video game player will want to start playing games on the Vision Pro.

Who would want to watch live sports, such as NFL games, on a room-sized screen in 3-D instead of their regular TV?

Finally, technology is better than the real experience of being there at the game in person. Even if you could buy great season tickets, the cost is more than a Vision Pro. It has a wider and larger viewing angle than being there in person, and you don’t get wet when it rains. You can create your own sports bar in your home or apartment. The answer to the question is: Every sports fan will eventually want to watch live sports with a Vision Pro.

How will Vision Pro Increase Apple’s revenue?

The Vision Pro won’t be released until the beginning of 2024 and only initially in the United States. It is a very complex product to manufacture, maybe one of the most complex and sophisticated consumer products ever. Demand for the Vision Pro will exceed supply for 2-3 years. It will become one of the hottest products that everyone wants but can’t get. Because of this, Apple will be able to keep it at a high price point.

It could add $17 billion to Apple’s revenue next year if it can manage to build 5 million of them, and less than that if it can’t. Eventually, supply will catch up with demand, the price will decrease, and Vision Pro’s revenue will be substantial. At 20 million units worldwide, it could exceed $60 billion, overshadowing the $40 billion in sales from the Mac. Of course, eventually, there will be cannibalization of Mac revenue along the way, but a higher price and an acceleration of switching because of the benefit should offset much of that.

Eventually, the Vision Pro will have some competition, but not for a long time.

There won’t be any serious competition for the Vision Pro for a long time

Generally, you would expect serious competitors for something this big. However, Apple has a commanding lead for several reasons.

• The technology in the Vision Pro is extraordinary. The Apple-designed M2 and R1 processors are difficult to replicate. The product design is intricate and very difficult to copy and manufacture. The embedded technologies for switching between seeing the environment and the apps and how people see the user are very sophisticated. Using eye motion, hand motions, and voice to control the platform is ingenious and probably costs billions to develop.
• Apple is building on its life-long platform strategy of processes, hardware, system software, user interface, and applications.
• Apple has an enormous ecosystem of applications and developers working directly on this new spatial computing platform.
• It filed 5,000 patents to protect this new technology, including a method and system for tracking the user’s head and eye movements, a method and system for creating a three-dimensional model of the user’s environment, a method and system for using voice commands to control the Vision Pro, and a method and system for using eye tracking to control the Vision Pro.
• Finally, it surprised everyone so much that most people don’t really understand what it is yet. Most likely, no other companies are putting billions into spatial computing like this.

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Analyst’s Disclosure: I/we have a beneficial long position in the shares of AAPL either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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