Saying 'Yes' To The Apple Headset

Summary

• The Apple Rumor Mill Industrial Complex is on overdrive. The persistent expectation is that we will see the new Apple AR/VR headset on June 5 at WWDC.
• Apple says, “No” to most everything, but they said, “Yes” to the headset.
• This is despite the fact that rumors portray it as expensive with a lot of rough edges. I always await the actual device to pass judgement.
• But Tim Cook said, “Yes” to the headset because he believes the long-term survival of the company depends on it. I agree.
• If the rumored high price is true, then this will be a very low-volume product, with few network effects for partners, and will likely be portrayed as a failure. But so was Watch.
• This idea was discussed in more depth with members of my private investing community, Long View Capital. Learn More »

Tim Cook at WWDC when it was still a live event.

Justin Sullivan

The Apple Rumor Mill Industrial Complex

The Apple (NASDAQ:AAPL) Rumor Mill Industrial Complex has been on overdrive lately, and the subject is the upcoming VR/AR headset:

Kagi search screenshot

The rumor mill is much better than it used to be, largely due to the work of Marc Gurman and Ming Chi Kuo. It is also still terrible. As Apple (AAPL) got bigger, and then really, really big, it became much harder to control leaks from their supply chain, despite repeated efforts to clamp down. What emerges are little slices of truth, without any context. While I frequently cover Apple at Long View Capital, I last covered them on the public site in November 2021.

There are four main reasons rumors turn out to be wrong:

1. Just plain wrong, or a hoax. This is actually the least common now.
2. The leak is something that Apple was working on, but decided against.
3. The leak is true as far as it goes, but without context, misses the point.
4. Recently, Apple has started taking countermeasures, including “leaking” fake information, as well as measures to root out the leakers through identifiable errors.

The third one is why I always wait to see The Thing before I pass judgement, even if I believe the rumor to be true as far as it goes. Since Apple is creating the hardware, software and services in a wholistic fashion, it’s hard to understand what a hardware leak means outside the context of the software and services that go with it.

For example, pre-iPhone launch, there were rumors about gyroscopes and accelerometers in iPhone. Unlike most of the phone rumors from 2006, these turned out to be correct. But it was impossible to understand the meaning of those chips until we saw the whole package, and the features enabled by those components. It’s nothing now, but in 2007 a phone that knew whether you were holding it in portrait or landscape orientation was magical.

So, I don’t want to talk about specific rumors except two that are persistent and don’t require a ton of context:

1. That this thing is going to cost $3000, and even at that price Apple may be forgoing any profit on it. A purported bill-of-materials put that at $1400. Keep in mind, the persistent rumors about iPad were that it would cost $1000-$1500, and the first one was $499.
2. There is a separate belt-mounted battery pack.

This all adds up to something that, in a very un-Apple fashion, is a somewhat experimental product, maybe aimed primarily at developers, with a ton of compromises. It is not going to be a high volume thing that will make a large dent in their Wearables, etc. segment for some time. Gurman says internal estimates are 900k units in the first year, pretty close to my own estimate at that price, which was “I can’t believe they are thinking about even a million in the first year.” Kuo says 500k and others say as low as 100k.

If those two rumors are true, this is almost guaranteed to be portrayed as a failure in the media because of the low volumes by Apple standards, and the unfinished nature of it that the battery pack speaks to. It will add to the Tim-Cook-Can’t-Innovate Meme that defies logic and facts. I expect a lot of ridicule, the same ridicule to which Facebook has been subject.

At 900k units, and a $3,000 price tag, we are talking about $2.7 billion in the first year, 6.8% of TTM Wearables revenue and 0.7% of Apple’s top line. It will also likely be additive to Services, but at those volumes the effect will be very small.

For comparison, Facebook (META) has sold about 20 million Quest headsets total, 16 million of those in 2021-2022. The Quest 2 starts at $400, and the Quest Pro was announced at $1500, but the price was lowered to $1000 before launch. The Apple headset is a much more ambitious product than the Quest Pro, if even a portion of the rumors about it are true.

But more than any Apple product ever, this is one where development will bring the largest changes over time. Sixteen years later, iPhone 14 has more or less the same form factor as the original. Same for the original 2010 iPad and 2015 Watch. These are entirely recognizable as the same devices, years apart.

The headset is not going to be like that. This is the first step on a long road that ends in a pair of AR glasses that look and feel like a normal pair of glasses. Judging by where we look to be in 2023, that may be a decade or more off. But if Tim Cook is right (and I think he is), the entire company’s long-term survival is riding on it.

The Most Important Thing Apple Does Is Say, “No”

Apple executives have expressed this in may ways over the years: that they say “No” to things far more than they say “Yes”. This gives them the opportunity to focus on making everything “insanely great,” as Steve Jobs liked to put it. It stands in contrast to many of their competitors.

Most recently, we heard this from SVP of Services, Eddy Cue, in an interview on CNBC:

I think it starts with saying, “No” to a million things; we say, “No” to almost everything, to say, “Yes” to a few things.

And hopefully those few things you say, “Yes” to, they have two things in common. Number one they’re things we’re good at, or that we think we can be very good at. And number two, the things that consumers are going to value deeply and care about…

But it starts by saying “No” because when you get as large as we are, it’s easy to think you can do anything, or everything. And it’s just not true.

This goes all the way back to Steve Jobs’ return to Apple in 1997. One of the first things he did was kill a lot of projects, to the consternation of many developers who had invested time and money into these technologies. At 1997 WWDC, Jobs did a Q-and-A with developers. In response to a question about the killing of one of these technologies, OpenDoc, Jobs uttered the now-famous phrase, “Focusing is about saying, “No".” But that was an Apple with far fewer resources than now, and focusing was a matter of survival. As Cue noted, that is not the Apple of today.

So now here we are, 26 years later, and another WWDC is upon us. WWDC is the Worldwide Developers Conference. Unlike other presentations in the Apple calendar, WWDC has two audiences: developers and the media/general public. It tends to be more technical than the others, and mostly about software. Its ostensible purpose in June is to present beta versions of the new operating systems to developers, so they can have their apps ready in the fall when they launch. Hardware launches used to be unusual at WWDC, but recently Apple has used it as an opportunity to launch their back-to-school Macs, which sell well in the quarter beginning July.

In the Eddy Cue quote above, “hopefully” is doing a lot of work. If rumors are true, Apple said, “Yes” to this headset and we will see it at the WWDC keynote on June 5. Apple has made numerous pre-announcements in the past few weeks, generally an indication that the program is jam-packed, and these are the things that didn’t make the cut. I expect that the headset is what is pushing them out.

I don’t doubt they can do it well, the first of Cue’s criteria. But to his second criterion — something "consumers are going to value deeply and care about” — I have my doubts.

Go-To-Market Strategies: iPhone vs. Watch

When Apple was working on iPhone in 2005-2007, smartphones had been around for a while, and were both popular and terrible. Everyone knew what they wanted from these things in 2007, they just wanted them to work well:

1. Portable music and video.
2. A great phone for voice and texting (these were not common in 2007).
3. The internet, which at the time was largely email and web browsing.

iPhone launch video screenshot (Youtube)

Apple was able to laser focus on those three things, sell them like crazy at the keynote, and we know what happened next.

Watch’s debut in 2015 was very different. Smartwatches were a very new category, and there was not a lot of competition to look at, and assess the strengths and weaknesses like they were able to do with smartphones:

iPhone launch video screenshot (Youtube)

In contrast to iPhone, they didn’t quite know how people would want to use a small wrist-computer with a ton of sensors that was linked to their phone. So Apple took a different development and go-to-market strategy. They sort of threw a lot of things at the wall in the initial release, got a sense of what features were important to customers, and then focused on those things: health/fitness/safety, and helping people separate from their phones more. In effect, 2015-2017 Watch customers were a very large test group. Watch 4, released in 2018, was the first really good Apple-level version in my opinion, and is still better than a lot of brand new smartwatches.

So it started off very slowly, but now there’s this:

Apple earnings reports

So the headset is much more like Watch than iPhone in terms of development and go-to-market. They have one competitor, Facebook, and this looks to be a much more ambitious product than even the $1000 Quest Pro in many ways. But beyond gaming, it is unclear what people will want to do on this thing, and Facebook has proven that metaverse is not ripened yet.

The major differences with Watch:

• Watch started at $349, not $3k.
• People already wear watches, and many spend quite a lot more than $349 on jewelry watches. People wear glasses, but this is much more expensive, bigger, less comfortable, more isolating and cumbersome.
• Even though Watch was a little half-baked, it was immediately very useful for health/fitness, and as a phone peripheral.
• Watch was (and still is) a quick and easy way to wealth signal. No one is going to be wearing a face computer out of the house yet.
• That battery pack, which speaks to an unfinished product.

Apple is looking for a test group, not customers, to help them figure out what the killer apps are here. They are going to keep working on making this thing better, lighter, faster, and cheaper, focusing on how those testers are using it. Beyond gaming, I have little sense of what that will be.

There Is A Lot of Risk In This Product

I await the actual product, because so often these rumors get some details right, but still manage to miss the whole point of the thing. But I still don’t see where this thing fits in 2023. This is the first time I’ve thought this since Newton, but I feel like Apple is sending this thing out too early, because they have poured so much R&D into it, and they want to ship something to actual users.

The risk is reputational damage. No brand is stronger than Apple’s, so there is a lot to lose. I think it is almost inevitable that this thing will be framed as a failure by the media, but so too was Watch. But with Watch, there was a pretty obvious path to it becoming a core Apple offering:

1. Make the hardware faster.
2. Add more sensors.
3. Make the software smoother, and more feature rich, leveraging all the sensors and faster hardware.
4. Most importantly, focus on what was important to users.

They can do 1-3 here, but beyond gaming, I don’t know what 4 is.

There is a very shiny halo around the Apple brand that this product could tarnish.

Why Did Cook Say, “Yes?"

If these rumors are true, and we can expect very low sales numbers from a product with some very rough edges, why is Apple doing this? The quick answer is, “Because Tim Cook thinks the long term survival of the company depends on it.”

Someday, something is going to replace the touchscreen smartphone as people’s primary device. Many think that will be AR glasses, probably some time after 2030. Tim Cook and I are in that group. The interface will be a combination of voice and hand gestures, with AR lenses substituting for the screen. Cook thinks this is an existential project that extends out a very long way.

Gene Munster at Loup Ventures predicts that these headsets will be 10% of Apple revenue by 2030, on the scale of iPad and Mac. Munster is pretty smart about Apple, but I think he misses the point here. By 2030, this will be a very different device than we will see on June 5; it will be much smaller, lighter and much less burdensome to the user, while at the same time doing a lot more. Much more like a regular pair of horn-rimmed glasses. At that point, people may start wearing them out of the house, and for some, it will have replaced their iPhone as their primary device. If Apple is on a successful road, this thing will be much higher than 10% of revenue by 2030, and iPhone revenue will be declining, along with all smartphones.

We are nowhere near those glasses being a reality, but in the meanwhile, Apple wants to start understanding what this thing should do once we get there. This headset is going to keep evolving every year until it becomes those AR glasses. Unlike every other Apple device, what these become in a decade will be unrecognizable from what Apple is going to soon show us.

Collateral Winners?

Apple is a colossus astride the tech world, so a new product is a catalyst for many others. Typically we would look at the supply chain to see who benefits. If you sell Apple a chip for iPhone, be ready to make over 200 million a year of them. But if you sell a component for the headset, 900 thousand is probably enough.

Let’s take Apple’s foundry, TSM (TSM) as an example. If this were a high volume product, they would be sitting pretty. The most recent rumors are that the headset will have 2 main Apple Silicon chips: the M2 that goes in MacBook Air plus a new one just for all the sensors on the headset. Both of these will be fabbed at TSM, and TSM will probably see around $275 revenue per unit, over 9% of the purported retail price. That’s a lot! But at 900k units, that only translates into about a quarter billion a year for a company with $75 billion in revenue in the TTM. The rumor is that Samsung will make the micro OLED screens, even more expensive at around $300 per headset, about $270 million at 900k units. Samsung had $221 billion in revenue in the TTM.

That brings us to software and services, and that is really where this thing is going to live or die. Apple has reportedly already loaded this thing with software, but they are going to need the hive mind of Apple developers to really bring out the best in it. And this is where we get into the limp network effects that a product at that volume brings.

Apple does not have to do much convincing to get software developers on iOS. Apple has over 2 billion devices out in the wild, and most of them are iPhones. iPhone owners are also much easier to separate from their money than Android owners, which is why apps are typically released first on iOS.

But the potential market here is a much smaller group of big spenders. Either Apple will have to subsidize development the way they do with Arcade, or they may find they have a lot of reluctant developers who would prefer to devote time and resources to iOS apps.

But there will be a group of developers who will take up the challenge because they see themselves on the same road as Apple. Likely a few of them have gotten a peak at the headset, enough to do a 2 minute demo of their app for the presentation.

The most obvious application is gaming. I imagine Apple will have at least some Arcade games ready for this at launch, and maybe some other gaming partners. While Facebook continues to flounder in their metaverse pivot, a small group of gaming companies are already building it without an AR/VR headset, step-by-step, disguised as gaming platforms. Fun will be the killer app for the metaverse. It already is. One company that is pretty friendly with Apple and is also on this long road with Apple is Roblox (RBLX). I’m very much hoping they got an early peak so we can see a demo from them. Also, I can tell you from personal experience that AR Minecraft (MSFT) is tons of fun, and has been demoed before at WWDC on iPhone.

Beyond gaming there is the wider conception of the metaverse, a bit fuzzy: immersive social, business, and recreation virtual activities, also interacting with the real world. Facebook has shown us one thing with their pivot: outside of gaming applications, the metaverse is not ripe yet. Neither the hardware or the software is there, and there aren’t enough people to create the network effect necessary to make this work. Apple is about to take a big whack at the hardware and software parts, but you can’t buy network effects. No one wants to hang out in an empty metaverse.

There have also been rumors that Apple sees this as a creative device, and will have creative apps at launch. Some of the patents we’ve seen are pretty wild, like an app that lets you build 3D worlds with voice and hand gestures. Keep in mind that Apple patents everything, even their pizza box, and the vast majority of their patents never see the light of day.

Next Up

I’ll be sharing my thoughts on the actual product with Long View Capital members after the presentation.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of AAPL, MSFT, RBLX either through stock ownership, options, or other derivatives.

Comments

[Up and Away]

hmm. Come out with one model that is too expensive and then just days later say you are coming out with another one that may or may not be as expensive?Pumping up the price?

[metoo5]

@Up and Away - Apple has not said they're coming out with a cheaper one, though costs will come down one way or another in time regardless. But Zuck's product is almost certainly subsidized, even though a generic product based on Snapdragon and Android and it is incapable of allowing you to look through it clearly. A great price but still a poor value. Good luck with that.

[Up and Away]

@metoo5
It was announced today that Apple is coming out with a "budget friendly Vision Pro sibling." Approximately in 2025 but already in progress.

[metoo5]

@Up and Away - Nothing was announced, nor would anything be announced 9 months before the 1st product ships. That was a rumor.

[G H]

Mark Hibben thinks that the Vision Pro is the developer onramp to build apps for the REAL Apple AR product, which is just over the horizon:

seekingalpha.com/...

[Trading Places Research]

@G H I also think that. Publishing Tuesday,

[VulpineMac]

@G H : I won't argue, but it will remain as an enterprise tool as well as a developer tool. The next product is likely to be the first consumer-grade iteration.

[Up and Away]

A name from the past-Jony Ive. He is the one who may deserve credit for the Vision Pro. Apple bought headset company Mira a maker of augmented reality headsets. The link between the two companies is Jony Ive (who previously served as chief design officier and the last of the originals who worked for SJ and was instrumental in the design of the iPod and iPhone.
Jony Ive was also an advisor to Mira giving Apple a lot of help in the matter (which Cook would never give him credit for) With Ive gone since 2019 who is going to champion the next iPhone design if there is a new one?

[G H]

@Up and Away

I'm pretty sure we just saw "the next iPhone design".

FWIW - just my opinion - I was OK with Ive leaving Apple. Early on he was a game changer, such as designing the "bubble" macs, and being a counterbalance to Scott Forstall's skeuomorphism. But after Forstall botched Maps and was let go, Ive became too influential and pushed priorities that hurt product functionality, such as compromising laptop battery lifetime and keyboard reliability to marginally reduce thickness.

[Up and Away]

@G H
Never heard this before so I cannot dispute it. I think Cook is too hands on for most employees to be confortable with and it is why no one with talent stays.

[metoo5]

@G H - I doubt we've seen the next iPhone design. I think VP UI is awesome and a next step in lots of ways, but does it make touch UI and pocket computers obsolete? I don't see how. When people say "this is the future" I always see red flags and it is usually forgotten soon. It is the future where we have these devices and apps, but the future in my opinion isn't one thing. How could it be? No, the future is multiple things and VP is one of those things. I don't see how screens or touch Ui will be obsolete for all applications and uses. At all.

[G H]

Trendforce estimates 200K Year 1 sales:
trendforce.com/...

[Doggywag]

Meanwhile, the "cool set" of people have already rejected VR goggles. Apple is throwing good money after bad. These things are not profoundly different so the result is likely to be the same: A flop.

[Up and Away]

@Doggywag
A tease to what's to come. They have not had a new product in how long? Besides it is an obvious attack on Meta and not the first one.

[Doggywag]

I am saying NO to them. They are too expensive, make me look ridiculous, and I don't like that disoriented feeling.

[G H]

OK, well, having watched the entire presentation today, Apple has done a decent year's worth of improvements, particularly the health stuff on the watch, the AirPlay connectivity to all smart TVs, and the Facetime improvements especially direct to Apple TVs.

And then came the headset. Apple has put a lot on developers' plates - really, a better analogy is they've set up an all-you-can-eat banquet.

It's pretty clear this is a leap forward in immersion for interpersonal communications and for entertainment. The price is steep, but if the experience is as immersive as it appears, I think a million sales will happen before the 1-year anniversary of first customer ship. I've been waiting for a decent infinite Mac workspace since Tom's Window Manager on my old Motif-based workstation. It would be worth $3499 to me just to get that back.

[G H]

@G H

I'd add that I think it's smart not to try to hurry this into the 2023 holiday shopping season. Let the developers work through the early adopters' inevitable teething problems at low volumes. But don't sell any AAPL shares until Apple starts advertising it in late '24 and the lines start showing up outside the Apple stores. Better yet: (I know @Trading Places Research agrees with me on this): just never sell AAPL.

[metoo5]

@G H - The headset is more ambitious than I'd thought it would be. The interface is more developed and general than I'd thought we'd see at this point. I think those predicting a "post-phone" world are dreaming. But it is a tour de force, and it shows Apple's dominance that "spatial computing" is just another category for them. There is no historical parallel for the breadth and unity of the product line. With the headset no one else is even close and Apple has plenty of time to tweak it. I had predicted it would be perceived as a failure no matter what, but I may have been wrong about that. Apple may have succeeded in demonstrating how to introduce new products that the bear case isn't very convincing anymore. As far as investment, there is no need to wait to see how successful Apple is with the headset. Their current products provide a massive and sustainable freight train of FCF and justify the stock price on their own. It's crazy but true that this astonishing new piece of kit is just icing on the cake.

[G H]

@metoo5

The VOX article I saw last night that reviewed it derided it repeatedly as "just goggles". I think the article missed the long-term vision as well as its value as a productivity tool, but for those looking for an attempt to combine snark with some legitimate criticism, it's here:
www.vox.com/...

[Todd Kenyon, CFA]

#1 "Things we're good at" - I am sure that could apply to the headset, but cars?!

[nate311]

nice job!

[Samsara Growth]

Yes!

[Tom Wolf]

I think someone inside Apple made the wrong decision to have these be standalone products (the MR headset to be announced next week - and the AR glasses of some now distant future). If it had been decided that AR glasses were going to be - at least initially - companion products to the iPhone, most if not all the technical hurdles that caused this device to now be pushed into the distant future would not exist! Imagine a set of AR glasses that did nothing more than send sensor data back to an iPhone and displayed images sent to it from the iPhone. It would not need a big CPU/GPU/neural engine, it would not need much RAM or even an Internet connection. As a result, it would not need a big battery either. Those horn-rim glasses the author imagines for 2030 could have already been built in 2023. Even by simply extending a few iOS applications to overlay data on the real world - e.g. extend the Contacts app to show a name bubble above people you're facing - Apple could be selling these glasses by the millions at a price point closer to an Apple Watch than a MacBook Pro! And those millions would provide the network effect necessary to have developers write more AR applications.

Instead, we're gonna see this $3k monstrosity that won't sell in large enough quantities to get any developers interested in writing apps for. Developers are businesses and need to make money: they can't wait years and years to see a return on their time investment.

[metoo5]

@Tom Wolf - "I think someone inside Apple made the wrong decision to have these be standalone products ..."

Apple did not make that decision. A few pundits did, and most have now retracted it because it is not going to happen.

– "If it had been decided that AR glasses were going to be - at least initially - companion products to the iPhone, most if not all the technical hurdles that caused this device to now be pushed into the distant future would not exist!"

Yes they do. You are underestimating the difficulty of a complex peripheral.

[fredrik2109]

@Tom Wolf I believe you TOTALLY misjudge the challenges of creating the products you speak of. Apple will fix them as it becomes feasible. Once upon a time, Samsung used to rush out stuff like tech demos to market to "beat" Apple to it. It mostly stopped whence the exploding batteries and foldable screens became costly failures. It is not just that it must be TECHNICALLY possible, you also have to be able to produce a heck of a lot of them. See the possible VR set as a by-product and tech demo/service setter. If they do not release it now, they will do so when they AND the market is ready.

[davel]

@Tom Wolf

You have a point about the peripheral device being less complicated. It depends on what the use cases are. Is it just to overlay meta data on the field of vision? If so how much compute do you need on device for rendering and control? Will you be able to vary the transparency and how quick will it be?
A fantastic use case is vision. Fixing vision problems and/or binocular features would be great. But that means an all day ability which still means a robust battery.

This device promises to push miniaturization and processing further

[Mortadella]

A friend was diagnosed with atrial fibrillation. The Cardiologist wanted to implant a detection device under her skin. She checked out alternatives and bought an Apple watch which monitors her atrial fibrillation without any surgery. Her decision seemed rational.

[berylrb]

key takeaway, "Someday, something is going to replace the touchscreen smartphone as people’s primary device. Many think that will be AR glasses, probably some time after 2030."

[Trading Places Research]

@berylrb Your reading comprehension is excellent. That is the key takeaway.

[metoo5]

@Trading Places Research - Some time after 2030? You mean like 2040 or 2050? To think the pocket computer will be replaced in little more than 5 years is delusional. In fact as I've said before, no computing platform has ever been replaced to date, so thinking the smallest and most democratized form of computing is going to be replaced anytime soon is a pipe dream that romantically ignores the reality of human machine interaction.

[berylrb]

@metoo5 I don't think the date is as important as the "marker" that a change is coming. I would beg to differ in your premise, that no computing platform has ever been replaced.

A few "computing platforms" that have been replaced: abacus, slide rule, punch cards, ...

[john.fAIrplay]

Whenever I make a trade (which is not very often) I try to come on to the most recently published article and disclose it. This morning, I sold 6% of my AAPL shares for a 902 percent gain.

[Siswati]

@john.AI-AI-AI aka Fairplay And ?

[metoo5]

@john.AI-AI-AI aka Fairplay - If I sell any shares at all, it is to pay for stuff I want or need. There is no other reason for me to sell.

[nate311]

@john.AI-AI-AI aka Fairplay excellent...as is keeping 94%. that's the way to do it!

[justanopion]

This will no bode well for the share price at the next quarterly meeting. I’m looking for a big drop. AAPL is to far behind Microsoft and alphabet.The innovation is dead except for a few improvements on their phone

[berylrb]

@justanopion Maybe, but wasn't Apple "too far behind" Nokia, BlackBerry, Palm, and Motorola as well?!

[justanopion]

@berylrb Those were phone manufacturers who stopped innovation and failed to adapt to the consumer.I said that was their big winner.

[davel]

@justanopion
Too far behind in what way? Please explain

[astout1000]

Whatever the headset is or will be the launch will be a stake in the ground and we will be able to extrapolate the future knowing the baseline.

What's next? Here's a thought. Apple buys Lucid Motors. Regardless of their sales, production challenges, etc., the product is extraordinarily well designed and the most "Apple" like in the market IMO. The YouTuber Jason Fenske does a deep dive on his channel and does a great job explaining just how well designed the Lucid Air is. Lucid's drivetrain technology is the world's best. Lucid's market cap is going to continue to collapse an Apple could likely pick it within a year for less than $10B. All that said this isn't likely to happen but I have to believe that Cook and Company think about this if they are actually serious about the automotive market.

[Danoxx]

@astout1000 Apple has never bought anything more than $3 billion dollars (Beats). Apple ain’t gonna start now, they leave blockbuster deals/ write offs, to Microsoft and Google.

[berylrb]

@astout1000 Apple would have to contend with the Saudi Wealth Machine!

[fredrik2109]

@astout1000 They can buy the heirs/remnants of SAAB Automobile, now NEVS, with a finished EV car model included if they so wish. They did the best cars in the world in some aspects. The EV seemed very good. But Lucid and other candidates will be abound to buy.

[metoo5]

– "it is almost inevitable that this thing will be framed as a failure by the media"

Exactly. I've been saying the same thing.

– "Someday, something is going to replace the touchscreen smartphone as people’s primary device. Many think that will be AR glasses, probably some time after 2030. Tim Cook and I are in that group. "

Do we know Tim Cook is in that group? I'm not so sure. Remember when voice was the next iPhone, and Alexa was leading the way and Apple had supposedly dropped the ball? I never believed that. Did you? Many did. Why? Because we idealize human features like speech and vision, and we romantically think they are destined to replace things like gestures. Is that a sure thing in the next 20 years? Maybe, but I'm doubtful.

Even though this clearly is not a mainstream device initially, I suspect Apple thinks they have some killer app for it. It could be AR sports related. I'm not so sure that Cook doesn't think of this as a peripheral rather than a replacement for anything. Apple is deviating from the playbook in that it is not intended as a mainstream product soon, but otherwise I'm not so sure they're deviating so much. If it was a killer peripheral for a certain demographic, that would be enough.

And here is where people get so far ahead of their skis and claim Apple must have a new product like the iPhone or they'll be irrelevant. In so doing, people under appreciate the massive achievements they've made. Apple has achieved the MS vision of "Windows everywhere", which MS tried for so long and failed to do. That is HUGE. Absolutely huge. And the profits are nation-state level and sustainable. People get jaded by breathless gee-whizzery of self-proclaimed tech wizards and overlook what is right in front of them.

People will laugh and mock if you suggest the pocket computer will be a thing for the foreseeable future. But if I were a gambling man I'd put my odds on that.

stratechery.com/...

[davel]

@metoo5

The problem with voice is you may not want to talk but may want to interact with your computer. Voice is not useful in many cases, plus the voice interpreter needs to have a high rate of accuracy or else we get frustrated.
Steve came up with a really nice input mechanism. Maybe 🍎 will come up with a slick new way to interact with your computer with their upcoming Glass device. We shall soon see.

Also the windows everywhere vision was something both Bill and Steve agreed on. The difference was the computer hub turned out to be a phone.

[metoo5]

@davel - I think there are far deeper problems underlying voice control, though it obviously is very nice for certain things when your hands aren't free or voice commands are just easier. I think there are philosophical issues with machine interaction using speech preventing exclusive use for machine interaction. I bottom line this in my phrasing that people idealize speech and vision. But I don't think there is no ideal UI for machine interaction. I think we're in a world where various UI's exist for different use cases and we even mix and match them.

The UI that Apple has come up with for this device will most certainly be very interesting to see. But I still suspect it will be relatively primitive and use specific such that the reason to buy it won't be the UI as much as the mediation capabilities. Even simple UIs can have great utility. I just find it curious that most people think the iPad UI is a joke except for simple things, though I think Apple sees great promise for it. I've little doubt Apple does not think the UI on this upcoming device will replace the touch interface.

But we'll see what tomorrow brings.

[davel]

@metoo5

I guess I will have to spend more time thinking of this. You bring up some interesting points.

I agree with your central thesis that phones won’t go away, at least anytime soon. I have been waiting for a more natural, emmersive interface for some time now. Just as PCs replaced mainframes and phones replaced PCs does not mean the next new thing will vanish the previous leader, just move beyond them.

Mainframes still exist. In fact I understand IBM sells more today than a decade ago. And PCs are still here even if phones outsell them by 5x. I think a mixed reality mobile visual device is so much more compelling than a phone if you can get the physical and virtual aspects right. Miniaturization is hard which is why the rumors have been out for a long time and the offering is today.

Excited to see what is unveiled today.

[coolcatnip]

The headset maybe a bit pricey for retail consumers but could be a monster application / AI tool for enterprises as a teaching/training/education tool for complex systems where simulation and rote procedures are required and these units could be purchased in the 1000's and distributed to maintenance employees for example.

[metoo5]

@coolcatnip - Whether business or sports or both, I suspect you're right that initially Apple will pitch the usefulness of AR in ways such as this. People are way over their skis in predicting this will replace the pocket computer anytime in the next 20 years. I'll bet Apple thinks nothing of the sort and is wise enough not to even be trying or planning such a thing in the development of this device. I'm not saying it could never happen, but that we're so far away from that even if it eventually does that it is foolish to develop for that.

[Danoxx]

@coolcatnip All that takes OS software and hardware integration on a much higher level than most companies presently in tech can do under one roof. If you look at the present tech companies, who is closer to that today out of all the companies?

And what new SOC’S are coming out in that new hardware Apple apparently is introducing Monday, all of the present companies are probably going to need to go back to the drawing board, because Apple designed hardware that can’t be immediately duplicated. (certainly not by Meta)

The journey for an Apple to get to this point with their SOC took about 13 years and now they’re in a position where they can design something custom to what they need with their OS.

I am confused about how they are behind when their integration of hardware and software is beyond the competition. (Buying off the shelf hardware (SOC) isn’t going to win the so-called AI, glasses race if there is such a race)

Who is closest to building a functional profitable? New ecosystem with
in house hardware and software?

In the end that is why the disruption of the Apple designing a in house SOC and OS software together was and is a big deal and adds to Apple’s value as a long term investment. Is it? I don’t think off the bridge noticed android is shitty on tablets. Is it it

[Danoxx]

@metoo5 That’s true, but Apple, more so than most of the other companies can lay the groundwork behind the scenes because they control the OS and the hardware design, they really don’t have to rush it they can just make sure it works well.

I think we will see some of that Monday when they introduce their product?, they are in a position of being able to integrate the in house OS software and in house hardware in a way that most of the other tech companies they compete with cannot.

[Doggywag]

I think that, along with gaming, it has tremendous application in the sex and porn areas. Total immersion in virtual orgies, for example. The key goal, of course, is an actual live-wire connection with the brain's pleasure centers and hypothatamus, surgically implanted and with a "plug" into the VR goggles. The object will be to enable the brain to perceive actual sensations leading to orgasm. Perceived sensations could actually exceed the real-life stimulation responses.

[Trading Places Research]

@Doggywag Porn is often on the forefront of new tech (the web, for example), but not in this case, because Apple will not let porn apps on the App Store

[rsucre]

@Trading Places Research The app would not be for porn per-se. It would be for "virtual experiences". There would be different topics, many of them could be of sexual nature and restricted to adults, etc... Or think of it as an app like Teams, Zoom, etc. Apple can't control what people do in the virtual meetings. The difference is that those meetings would be enhanced by VR/AR.

[VoiceofSanitySometimes]

The idea of a battery pack in the pocket tells me they get it -- the big issue is the weight and bulk of the headsets. We will see how they execute it, but it makes me more optimistic about the product.

Back in the day, people wore their Walkmans and their iPods on their belt or with an arm band so that the earbuds were unobtrusive.

[Trading Places Research]

@VoiceofSanitySometimes The tether is the problem, not the battery pack.

[VoiceofSanitySometimes]

@Trading Places Research

Could be. It depends on how they do it.

The iPod and the Walkman had a "tether" and people managed to make it work.

Maybe you run the cord inside your shirt, or maybe there will be some clips to hold it to your shirt. I agree, you don't want a cord with a bunch of slack bouncing around, but I think that is a problem that can be easily solved. Security people did it for years to connect an earpiece...

If a slack tether is the biggest problem Apple has with this device, there will be 100 3rd party solutions on the market in weeks...

[Trading Places Research]

@VoiceofSanitySometimes With Walkman/iPod your vision wasn’t obscured, so the cord is less of an issue. When Quest was tethered, people constantly complained about that. There is a reason Apple sells so many AirPods.