Industry analysts praised Apple’s Vision Pro on Tuesday for its impressive technology but cautioned that widespread adoption of the $3,499 augmented reality (AR) headset may take a few years, reported Reuters. Despite the lukewarm reception from investors, the device marked Apple’s first foray into a new product line since the introduction of the Apple Watch almost a decade ago.
CEO Tim Cook expressed his belief that the Vision Pro could ignite the era of “spatial computing,” where digital content seamlessly blends with the physical world, akin to how the iPhone revolutionised the mobile industry. However, analysts cautioned that realising this vision might take time due to the high price point, which is likely to deter many potential buyers. Additionally, the product lacks a clear use case beyond entertainment, which is still an emerging market within augmented reality.
While Apple showcased its visionary approach to the role of AR technology in consumers’ lives, Morgan Stanley analysts emphasised that the Vision Pro is not yet ready for mass consumption. They pointed out concerns such as a bulky external battery pack and the absence of a “killer app” among other factors.
Analysts also raised the concern that Meta Platforms, the market leader, could present a challenge with its cheaper AR offerings. Meta’s Meta Quest 2 retails at $299, and its recently unveiled successor, Meta Quest 3, is priced at $499. They predict that Apple, despite posing a significant challenge to Meta, may not surpass Meta in terms of shipments. However, Apple’s strength lies in profitability rather than sheer market dominance, akin to the smartphone industry where it consistently commands a large share of profits with a smaller share of shipments.
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The uncertainty surrounding Vision Pro sales has led to varying predictions regarding its expected shipments once it hits the market next year. While some analysts like Christine Wang of KGI Securities anticipate shipments of around 200,000 units in the first year, Credit Suisse predicts Apple could surpass 1 million units during that period. For comparison, Apple sold over 1.4 million iPhones in the first year, generating $630 million in sales.
Despite the uncertainties, analysts believe that Apple has created a “no-lose” situation for itself by venturing into AR. James Cordwell of Atlantic Equities noted that if the device eventually drives a platform shift from mobile to AR, Apple is poised to extend its leadership from the smartphone era to the new epoch. Conversely, if AR fails to gain traction, it would solidify the smartphone’s dominant position as the primary consumer device.
On Tuesday, Apple’s shares experienced a 0.7 per cent decline in response to the news, as per Reuters.
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