Tuesday, industry experts praised Apple’s (AAPL.O) Vision Pro for its cutting-edge technology, but they also cautioned that it will be several years before the augmented reality headset, which costs $3,499, achieves broad acceptance.
It was the first new product line for the firm since the introduction of the Apple Watch almost ten years ago. Investors were not very enthusiastic about the item, which represented the beginning of the company’s first new product line.
Tim Cook, Apple’s Chief Executive Officer, believes it has the potential to usher in a new era of computing known as “spatial computing,” in which digital content is seamlessly integrated into the real world, similar to the way the iPhone revolutionized the mobile phone industry.
Analysts believe that it may take some time for that vision to become a reality because the exorbitant price tag is likely to discourage the majority of purchasers, and the device does not have any clear application other than entertainment in the market for augmented reality (AR), which is still in its infancy.
“Apple proved that they have a vision for the role AR technology could play for consumers… and Vision Pro looked sleek/differentiated versus incumbents and performed with clear potential,” analysts from Morgan Stanley stated.
“However, the Vision Pro is not ready for mass consumption,” they continued, citing a cumbersome external battery pack and the absence of a “killer app” as two of the many problems with the product. “However, the Vision Pro is not ready for mass consumption.”
The Meta Quest 2 can be purchased for $299, while its successor, the Meta Quest 3, was introduced last week at a price of $499. This has caused some analysts to caution that cheaper AR options from market leader Meta Platforms (META.O) could be an obstacle.
According to Harmeet Singh Walia, senior analyst at Counterpoint Research, “Although Apple will give Meta the biggest challenge since the Facebook owner’s entry into the segment, it will not be able to overtake Meta in terms of shipments.” Apple will give Meta the biggest challenge since the Facebook owner’s admission into the category.
However, he emphasized that in order for Apple to become the most significant participant in the industry, the company may not need to dominate the market in terms of the quantity of shipments.
“As with smartphones, in which Apple usually has well over 80% share of profitability with around 20% share of shipments, it may become the most successful player without becoming the most widely adopted,” Walia added.
The lack of confidence around Vision Pro sales has also led to a diverse set of projections regarding the amount of shipments that may be anticipated once the device goes on sale the following year.
Analyst Christine Wang from KGI Securities stated that she anticipated shipments of 200,000 devices in the first year, whilst analysts from Credit Suisse forecast that Apple may ship over 1 million units over the period.
As a point of contrast, in the first year after the iPhone’s launch, Apple sold more than 1.4 million units, bringing in a total of $630 million in revenue.
On Tuesday, a loss of 0.7% was recorded for Apple’s stock.
Despite this, a number of industry experts feel that the business has put itself in a position where it can “no longer lose” by expanding into AR.
James Cordwell, an analyst from Atlantic Equities, stated that “if the device were eventually to drive a platform shift from mobile to AR, Apple has positioned itself to extend its leadership from the era of smartphones to that new epoch.”
“If it does not succeed in gaining traction, then it will most likely be because VR/AR is a technological dead end, thereby extending the dominance of the smartphone as the primary consumer device.”