Article – VisionPro impact on the future of technology and the global markets

Leave a Comment / Articles

Joana Garganta

Financial Markets

Rodrigo Roque Neto

Financial Markets

Overview

In an era where technological advancements are constantly reshaping our world, Apple presents a rewrite of the VR headset, the Vision Pro. 

On the fifth of June of 2023, Tim Cook unveiled to the world how Apple sees the future of technology with the Vision Pro, what they call a “spatial computer” that brings all of your devices into one. Apple’s main premise with this is to blend the digital world with the physical space in a way that is ready for the consumer to use and complement with Apple’s ecosystem. And with that, Apple Vision Pro was launched in the second of February of this year and surpassed sales expectations. This has happened thanks to all the “hype” behind the product during 2023 and all that the Vision Pro promised to deliver. 

In fact, the Vision Pro delivered both in terms of hardware (taking into consideration that it is a first-generation product) and software (behind, as previously mentioned, integrated into Apple’s ecosystem, and built on the new VisionOS software). Besides, we could compare this to the first iPhone, back in 2007 when it was released – a product in a new package and a more consumer-friendly interface. And the VisionPro delivers just that when compared to rivals like the Meta Quests. But, similarly to the original iPhone, what made the product what it is today are all the apps and the functionalities that they bring to the consumers. With that in mind, the sea of apps that we see on the App Store in the IOS, IpadOS, and MacOS does not yet translate to the VisionOS platform, so it was to be expected that the functionalities that you could bring to the VisionPro were to be quite limited. And with that, the hype behind the product was expected to slow down, but not as much as it did. Apple even had to reduce its sales expectations for the VisionPro from millions of units to only half a million.

All of this comes at a time when Apple has not been having the best year, with a 12% decrease in share value. This might be happening, as analysts say, due to the stagnation of the iPhone improvements in recent years with continuous upgrading instead of revolutionary upgrading every year. Besides, the supply chain issues with the component shortages, the slowing demand for the products amongst Chinese consumers, and the regulatory constraints from the EU show investors that sales volumes might shrink in the future, which is supported by the latest financial results. This slowdown has made Apple the only big tech company to have a decrease in value in the last few months, and grow at a slower rate than the other companies in the Magnificent 7, being even surpassed by NVIDIA in market cap.

Apple’s market capitalization drops below $3 Trillion

Source: Bloomberg

Taking that into consideration Apple hoped for Vision Pro to invert this trend and make the stock value jump and the company grow at a steadier pace, something that has not quite happened, yet at least.

The “Magnificent Seven” tech stock performance

Source: Reuters

Sales

Recent reports suggest a slowdown in sales for Apple Vision Pro, despite exceeding initial expectations. This slowdown is attributed to various reasons, such as the ones previously listed and a few more like the price tag or the economic conditions as a whole. But Apple still maintains a desire to sell 350 000 Vision Pro’s by the end of the year and taking into consideration that they already fulfilled 75% of this goal in the first two quarters of the year, analysts say it’s a very tangible goal to target.

Number of reached consumers with the Vision Pro

Source: Apple’s Financial Statements

 

Besides, Tim Cook’s team is expecting a pickup growth of the product in the next five years, something that will certainly surpass expectations given future updates and lower prices of the product itself.

Market reaction

When Apple announced the Apple Vision Pro’s release date, the company’s shares went up 1.5%, showing the trust the public had in the success of the product and how it would help the company. Since its release, the product has shown great appeal to the public, having sold over 200 000 units in the first 10 days of pre-orders despite its high price, resulting in a rise in the company’s stock price, which dropped in January.

Around the time of the release date, Apple also announced over 600 apps made specifically for the Apple Vision Pro that explore the product’s distinct abilities to give customers exciting new experiences. This gives Apple an advantage against Meta, its main rival in this market, since the Meta Quest Store doesn’t provide that many apps for its VR headset. Speaking of Meta, in a recent video, Mark Zuckerberg revealed he’s unimpressed by the Apple Vision Pro after trying it, claiming Meta’s Quest 3 is better and much cheaper. This shows that despite the initial success of the product, its main competitor isn’t worried about losing sales. Nevertheless, Meta announced it will be adding better features to its VR headset in a new update, which is rumored to happen later this year, however, not many details have been given about what exactly will be in this update. After a company as big and successful as Apple enters a new market it’s only logical that its competitors will respond to it by improving their current products, just like Meta is planning to.

The augmented reality market

Due to the development of its technology, the augmented reality (AR) market has grown and evolved and is expected to keep doing so in the upcoming years. From gaming companies to the retail and healthcare industries, more and more companies seem to be trying their luck in this market, introducing AR technology in their products or services. With Apple now joining with the Vision Pro, the AR market will grow even more and will likely become a more attractive bet for other companies.

Consumer trends

A developing landscape characterized by numerous applications, expanding content ecosystems, and technology developments is revealed by consumer patterns in spatial computing and VR sets. According to reports, enterprise solutions, instructional simulations, and immersive entertainment experiences are driving the increasing adoption of these technologies across a range of industries. Consumer interest is mostly influenced by accessibility and pricing, with standalone VR headsets and cheaper VR headsets making immersive technology more affordable for general customers. Furthermore, the growing acceptance of communal and cooperative virtual experiences emphasizes how revolutionary VR and spatial computing might be. Technological developments, such as improvements in display technology and UI design, contribute to the immersive qualities of these platforms and increase customer engagement and market expansion. The market for spatial computing is expected to grow in the face of platform wars and ecosystem growth, driven by consumer demand and changing use cases in various industries.

Spatial Computing market size

Source: Global Markets Insights

Conclusion

In summary, the release of Apple’s Vision Pro VR headset represents a major advancement in how technology is incorporated into our daily lives. Despite the early excitement and fanfare surrounding its release, the device has had trouble growing its ecosystem of applications and, with that, fulfilling its sales projections. But just like when the first iPhone was introduced, the Vision Pro has enormous potential and marks the beginning of a new era of immersive experiences and spatial computing.

 

Leave a Comment

Your email address will not be published. Required fields are marked *