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Apple Mixed-Reality Headset Rumored to Cost ~$1,500 to Manufacture
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This is the key. Apple need enough excitement in the initial device to get the early adopters interested (in sufficiently large numbers), then they can iterate to add incremental improvements that will attract the mass market. They succeeded with eg the Apple Watch, but have so far failed to do that with HomePods (and I think with most of their service products - at least they're still offering me free trials with every new Apple device I buy).
I don't at this point see anything in VR/AR that interests me as a user (either professionally or personally). I have used other sets in the past (a bit clunky, slightly dangerous [to the extent that I wouldn't use them in an uncontrolled environment]). Maybe multi-player gaming or team/family communication?
They also don't have to succeed at everything or succeed with everyone. They have quite a lot of products that I don't use/need even as a heavy Apple user, but they seem to do fine despite that. I don't mind them having some fun as long as they keep making the things that I do want
This one looks a bit odd, though - they usually aim for a premium version of a cheap device with some clear mass market potential that allows them a good profit margin. Maybe the goal is to embed some version of the device within high value consumer items (cars, for example, or a large standalone panel) or they are just trying to get some return from a cancelled project (Apple Car => AR).
I disagree with your implications that Apple should follow Meta, Microsoft, and Google...suggesting that if they fail at something everyone will. Apple is fundamentally capable of avoiding those pitfalls and building something worthwhile if it operates from its culture of thinking differently and designing transformational technology which sets it apart.
Apples Stock is more like an ice berg than the Titanic.
We've had a century for wearable devices on our eyes. They are called glasses. As Apple refines its technology towards that market it will be increasingly successful. When they refine the tech they offer in their goggles down to the size and look of sunglasses, add an electrochromic feature, with prescription and non prescription models, they will have the core of what they need in order to be competitive...the real draw will come from the AR integration. Maps integration alone will be huge...seeing an obtrusive visual of the path you need to go through a city...being able to tell what various buildings are...heck even checking the menu of restaurant across the street before crossing the crowded intersection. Health integration...being able to scan users' eyes and be able to warn them they may be developing cataracts, glaucoma, etc. LIDAR support...being able to tell the measurements of everything in room just by glancing at it...etc. etc.
Don't get me wrong...I think the goggles have a use case of their own...just more industrial and business centered. I think they are a vital step that Apple will use to refine technology over time while building an app pallet, increasing features, miniaturizing components, etc. etc. to arrive at the glasses they are really interested.
I would be surprised if the main functionality of the googles approximates that of the models from Microsoft, Google, and Meta.
Except the reason you have glasses in the first place is due to impaired vision. There are some people who wear glasses without a prescription just for the looks, but it's far from common. Contact lenses and surgical treatment aren't really a choice for everyone either. Medically not recommended, can't afford, for minor impairment surgery might be overkill, and so on. I wear glasses because they look nice and my doctor recommended strongly against contact lenses which I would have preferred. A surgery is not feasible at the moment either. By your logic I am wearing glasses by choice, which is not the case: I'd rather have better eyesight and not need to wear glasses in the first place.
And when wearing VR headsets I need to use them without glasses and accept the blurry vision, because both never fit together and I initially ended up bending glasses with a headset. Some support inserting prescription lenses manufactured specifically for the headset, but that's obviously not a practical solution.
Huh? How do you come up with zero?
If the COGS (cost of goods sold: materials/labor/shipping) is $1,600 for the device, a conservative estimate mentioned in the story. And Apple sells it to customers for $2,300, then the profit margin would be $2,300 - $1,600 = $700.
Or, 43.75%, which is Apple's current GPM.
For all its faults I would say that just about every tablet but the iPad is still a failure.
I like the samsung tablets. Even a better screen (OLED) and it does everything an iPad does. And surprisingly, it's lighter than a similar sized iPad.
The parent poster just said "profit margin", which could be net profit margin. We can't ignore R&D, salaries, support, marketing and more. It's highly likely Apple's margins will be slim to non-existent for these. Apple has high margins with services and some products that could keep overall margins high.
Somehow Apple manages to limp by with 44% GPM across the board for their products, and manages to stay in business after overhead costs (R&D, utilities, marketing, legal, Tim Cook's and others' salaries, gardening, janitorial, rents, travel, etc) are subtracted.
I wouldn't worry too much. Their AR device will be a huge success. They've not become one of the most successful companies in the world from making bad decisions.
This was the state of tablets after Microsoft promised, tried and failed for a decade, with one product after another. Apple was ridiculed for iPad and was deemed as dead on arrival as the iPhone was supposed to be.
Apple has a way of making stuff work. Their mistake in the 90s was attempting to follow IBM and Microsoft in the commodity computer licensing model instead of making the best premium products available. Remember The Lisa computer was a $10,000 unit that setup the more affordable Macintosh to follow. It’s existence allowed developers to start creating apps in the new paradigm.
Apple is already preparing less expensive mass market units likely following the Lisa - Mac blueprint. 50 years later the impact is still being felt.
Most companies would be thrilled with those profit margins. In fact their margins tend to be so good, they have a cash problem. They are making more money than they can reasonably make effective use of.
Wow, a lot of gay VR content as well. Could be worth a 2 week try out. 😉
Fair points. I live just outside of Detroit, where housing isn’t as expensive as California, or just outside of NYC. A great example of perspective, I guess. 🙂
Indoors with no skis! Could be fun.. 😉This will be perfect for skiing
And the billions of dollars spent to create it, how is that factoring into your GPM mathmatics?
It doesn't, as with any other new Apple product research and development costs with respect to GPM. See my post #160, above.
Though it will likely enrage the "Apple is doomed" crowd, I have a feeling Apple will manage to survive.
The same thing that's stopping the competition from simply copying the Apple Watch, AirPods or AirTag.
You can have a laptop that looks like the MBA, but you can't replicate macOS or the M1 chip inside.
Your bluetooth tracker won't have a billion iPhone to power their find my network.
Your smartwatch won't support Siri, Apple Pay, iMessage or unlock one's Mac. Nor does it work with Lumihealth (a fitness monitoring programme that Apple is currently collaborating with my country's health board on).
They can copy the form factor, and maybe even the specs inside, but they won't be able to replicate the integration with the rest of the apple ecosystem, nor will they have the support of the entire developer community making AR / VR content accessible to their users.
At this point, tech companies are no longer competing based on individual products and hardware, but entire ecosystems, and this is the one area Apple continues to have a unique advantage in, because they were the only company willing to invest in having an ecosystem in the first place.
You may be right. However, when Apple makes something, the market takes notice.
Remember when the iPad came out? Man, that thing was **** on left and right. Not much else needs to be said.
Yeah just like in phones, it’s pretty much Apple, Samsung, and “other.”
