Can Apple's VR Headset Become A Top Seller? - Free Websites, Share News And Posts Publicly

FRI, JUN 09, 2023

Can Vision Pro Become Apple’s Top-Selling Wearable?

Did someone forward you this newsletter? Click here to subscribe.

Apple this week unveiled the Vision Pro, a $3,500 mixed-reality headset. It’s Apple’s most expensive new product category in a long time. It’s early days, but can Vision Pro eventually become Apple’s top-selling wearable? Jon Fortt is here to weigh in.

JON:

“Sure the Vision Pro can be Apple’s top-selling wearable.

And I want to make an important distinction here to illustrate why. For it to become the top-selling wearable, Apple doesn’t have to move more Vision Pro units than Apple Watches or AirPods. That’s because this mixed reality headset costs 10 times as much as those.

So right now, Apple’s averaging about $10 billion a quarter in its whole wearables, home and accessories category. Let’s say the Apple Watch is responsible for about half of that, $20 billion. That’s a big number. But that would be less than 6 million Vision Pro units at the starting price.

Here’s another way of thinking about 6 million: Sony shipped more than 6 million PlayStation 5 consoles in the first quarter of this year alone. Can Apple’s Vision Pro achieve game console levels of popularity? Yes. Sure it can.

Now, I don’t think that’s going to happen quickly. Not in 2024, and probably not 2025. But when the starting price comes down to $2,500, even $2,000? Totally within the realm of possibility. It will need amazing games, killer apps. But I can already imagine the driving and flying games.”

The Vision Pro is really expensive for a device only one person can use, though.

JON:

“On the other hand, Vision Pro is never going to be Apple’s top-selling wearable, and that’s why:

It’s an extreme luxury. It doesn’t replace a desktop computer that multiple family members can easily use. It doesn’t replace a laptop or phone that you can use unplugged for more than two hours. Even if the price gets chopped in half in a couple of years, it’ll cost as much as the standard MacBook Pro, Apple’s high-end notebook. That’s too much to subsidize through a broadband subscription or any other monthly fee.

Now, I’m not hating on it: I think the Vision Pro can be a powerful catalyst for Apple even if most people never use one. It can help turn Apple’s ecosystem into an environment for the most advanced gaming, which would drive a whole new level of services revenue. It can blunt Meta or Google or Microsoft’s attempts to use wearables or game streaming to disrupt the App Store.

So take the pressure off Vision Pro to be the next iPhone or even the next Apple Watch. This product will take years to mature, and it’ll probably be to the computing world what a motorcycle is to vehicles: Most households don’t have one, but great for solo runs.”

Enjoy this newsletter? Forward it to a friend. Click here to subscribe.

Vote in the LinkedIn poll and join the debate!*

*Why LinkedIn? On the Other Hand is about civil debate that illuminates the relevant facts. We’ve found that LinkedIn does a good job fostering that kind of environment.

On the Other Hand is Jon Fortt’s weekly segment on Squawk Box, Thursdays in the 7 a.m. ET hour. He’s been writing it just about every week since August 2020. The second (or first) argument each week isn’t necessarily the one Jon agrees with. He just makes an honest effort to construct the best argument he can for each side.

When he’s not debating himself, Jon co-anchors Overtime at 4 p.m. alongside Morgan Brennan. Jon also researches and writes the weekly Working Lunch segment on Power Lunch, Fridays in the 2 p.m. ET hour, where he introduces viewers to founders and CEOs through their origin stories and strategic goals.