This was never going to work.
It’s one thing for people to fool around with it…
And it sure was great for content, as the wave of content creators certainly tried to make it seem cool.
But it was never going to last…
The Apple Vision Pro is an impressive, augmented reality headset (AR) with a base price of $3,499. It’s a headset, not a pair of glasses, and at that kind of price point, it was never going to be a mass-market product in consumer electronics.
I made this case back in January 2024 when it launched…
There is no denying the utility of a product like this as a completely new computing platform. A computing platform that no longer requires a keyboard and mouse…
This is just the beginning.
At $3,499, this is clearly not a mass market product yet. The technology is, but the price isn’t.
Apple had to start somewhere, though, and it’s not known for selling products at a loss.
And we should remember: This is Apple’s 1st generation spatial computing device. Will it improve every year? Absolutely. Will the device get smaller and lighter? You bet.
And most importantly, will the price plummet to a mass market range?
100% it will.
Much to my dismay, we’ve not seen a new iteration since.
Meanwhile, Vision Pro has been a rare product failure for Apple, by my estimation, having sold only somewhere between 500,000 and 750,000 units since the product was launched in early 2024.
Despite the lack of uptake of the Vision Pro, all is not lost.
A product like this still has utility.
Apple’s Vision Pro can be used primarily as an entertainment device at home or in a work setting – enabling useful visualizations.
Shown below is a short video demonstrating the augmentation of a real-world object and the virtual manipulation of the object.
Augmenting and Manipulating Objects with the Vision Pro | Source: Apple
Earlier this year, it appeared that Apple was still moving forward with a new version of the Vision Pro – with an improvement of computational horsepower and additional artificial intelligence (AI) capabilities. There were rumors that a new version would be out later this year.
There was also talk of a cheaper version of the Vision Pro, codenamed the N100, which would have likely been in mass production by 2027. A price adjustment alone cannot fix this problem, however…
It’s kind of incredible that Apple has missed the mark by such a wide margin with augmented reality.
This product category should have been right up its alley – right in its wheelhouse. A mass-market consumer electronics product that is a computing interface, tightly integrated with Apple’s software stack, applications, and worldwide customer base.
Apple knocked it out of the park with the Apple Watch and became arguably the most successful watch brand in history.
By 2017, the Apple Watch had already become the best-selling watch in the world.
By 2019, Apple had outsold all of the Swiss watchmakers combined.
And today, the Apple Watch is the most successful and popular watch of all time.
Why didn’t Apple just follow the same product strategy with AR glasses as it did with the Apple Watch? Mass market price point, high utility for the user, tight integration with Apple iOS applications, and a form factor the same as what consumers are used to (i.e., a watch or a pair of sunglasses).
Who knows why? Apple’s strategy on augmented reality never made sense to me. And now it is paying the price.
If Apple doesn’t pivot quickly, it could be the biggest mistake the company has ever made.
It’s not a coincidence that days after Meta’s (META) latest product announcement – with the impressive Meta Display AI glasses, which we explored last week in The Bleeding Edge – Hands-Free Computing, Apple was forced to suck it up and make a major pivot.
Apple is now shelving its upgraded Vision Pro model and also putting the development of the cheaper N100 on hold.
All energy and resources will be shifted to the new product design of smart glasses and eventually AR glasses.
It’s about time.
From the outside looking in, it seemed so obvious. Smart glasses, AR glasses – or AI glasses, as Meta is now calling them – are the next mass-market computing interface. Hands-free computing… giving us seamless access to the information, data, calls, entertainment, and translations when we need and want it.
And the integration with an Apple Watch would have been so natural.
Think about it, the Apple Watch band could be made into a neural band just like Meta has done. Dual utility. Perfect.
Now Apple (APPL) is having to play catch-up. It is way behind.
The current plan is to develop a pair of smart glasses, codenamed the N50, which will not even have the ability to display anything in the lenses… to make this available to the Apple development community later next year… and then go to mass production by 2027.
Worse yet, Apple is planning on having actual AR glasses – something that could compete with Meta’s current version of its Display AI glasses – by 2028. Oof.
With the speed at which things are moving right now in high tech, that is an eternity.
The point that I’ve made on many occasions is that AR glasses are about the race to dominate the operating system (OS) for this new consumer computer interface.
It may not feel like it, but Apple lost the OS battle for smartphones. Google’s Android OS has 75% of the global market share, and Apple’s iOS has around 24%. Apple still has a phenomenal business, but Google trounced Apple in market share. And that resulted in a $1 trillion-plus business for Google’s advertising revenues.
We’d think Apple would have learned its lesson…
And yet, it has allowed Meta to lead the industry with a series of product releases that have culminated in the Meta Display AI glasses.
And Google isn’t far behind, with Android XR, its operating system for AR glasses.
We can expect Google to employ the same strategy that it does for smartphones, namely releasing its own consumer electronics product to demonstrate the capabilities of its Android XR operating system, and then licensing out the XR OS – for free – to consumer electronics companies, in exchange for enabling data surveillance and collection.
With the augmentation of artificial intelligence and advanced display technology, less of our time will be spent hunched over our phones or glued to a computer screen.
We’ll be doing less busy work on our PCs, which means that the computing systems that we’re using today won’t have the same pull on us in an AR/AI future.
And that’s why this competitive threat is so significant for Apple. The sticky ecosystem that it depends on so heavily for its business loses its gravitational pull if it doesn’t have an augmented reality operating system – its vision OS – running on hundreds of millions or billions of glasses.
And the two areas where Apple is the most behind – AI and AR – are where Meta and Google have been excelling.
Apple, it’s time for the biggest product sprint in your history. Your future success depends on it.
Jeff
The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
