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Just after the Mac’s 40th anniversary last February, Apple Vision Pro (AVP) launched. Both devices were/are first steps in a long journey. And both were/are prohibitively expensive – the original Mac weighing in even heavier in today’s inflation-adjusted dollars.
AVP’s price tag has been its biggest sticking point. But it’s the wrong thing to focus on. AVP is Apple’s way of planting a flag for a first-generation device, and to demonstrate what’s possible at any cost. Future generations will get cheaper and lighter – a typical Apple product lifecycle.
V1 can also be seen as a dev kit. Buyers will be fanboys, wealthy early adopters, and developers (‘Pro’ is in the title, after all). The latter will view it as an early-mover advantage in starting to build muscles for spatial app development – a potentially valuable skill if all goes well.
So on those levels, what is Vision Pro? Where will it go next? And how does it fit into Apple’s future-proofing plan? This is the topic of a recent ARtillery Intelligence report. As such, it joins our weekly report excerpt series, with this installation focusing on Apple’s motivations.
What’s Next
Picking up where the previous part of this series left off, one way to contextualize Apple Vision Pro is to ask the question of why? Why would Apple invest so many tens of billions and a decade of R&D on such a device? Answering the question of why is the first step to answering what’s next?
In that light, Apple these days is all about revenue diversification. As smartphones reach maturity and revenue deceleration, the company must find other ways to maintain revenue growth, and do so at massive scale. This is the raison d’être for Apple’s wearables and services divisions.
We mention those two divisions because Vision Pro feeds into both. For wearables, revenue each quarter mostly offsets year-over-year iPhone revenue declines. Services (e.g., Apple TV+) meanwhile reached 1-billion users last year, with revenues that likewise offset iPhone declines.
Consequently, wearables and services hold a great deal of importance, investment, and political capital in Cupertino. Anything that is aligned with those two endeavors is likewise bestowed with a favored nation status inside the walls of Apple. Vision Pro has been propelled by those tailwinds.
How does Vision Pro align with each? For wearables, it extends Apple’s device constellation approach, where continuity features compel multi-device ownership, which then drives ARPU metrics. And with entertainment, Vision Pro unlocks premium content and experiences.
Puzzle Piece
Going deeper into Wearables, Vision Pro syncs with sensory experiences in Watch and AirPods. Visuals join spatial audio and biometrics (think: immersive fitness). And Apple’s signature ARPU-boosting ecosystem approach justifies several devices for continuity, as noted.
Clues to that effect can already be seen. Apple has announced an AVP-like finger pinch to control Apple Watch. Similarly, Airpods’ spatial audio was recently upgraded for low-latency AVP-centric use cases. And the iPhone 15 records spatial video for stereoscopic playback on AVP.
As for services, including AppleTV+, AVP is positioned as an elite and immersive consumption experience. This is a prominent point of emphasis in AVP’s marketing, including massive virtual screens and serene viewing environments. In-flight entertainment is one use case.
Spectator sports is another one (we’ll explore in an upcoming article in this series), and we’ll see other AVP directions that expand Apple’s existing forays into healthcare and fitness. And several others will follow – some from Apple and others to be discovered through third-party development.
That plus hardware and other cascading revenue streams is where Apple is aiming. AVP won’t replace the iPhone nor be as ubiquitous, but it will be a key puzzle piece in Apple’s signature multi-device ecosystem approach. And like Mac and iPhone, this process will unfold over several years.
We’ll pause there and circle back in the next excerpt with more depth into the strategy that sits behind Apple Vision Pro. Meanwhile, check out the full report.
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