It looks like Apple has caved to pressure and is going to press ahead with the launch of a metaverse device this year. But without the guiding hand of Steve Jobs or Jony Ive, this is a risky proposition.
I have long been dubious as to whether Apple would launch a metaverse device before 2025 or 2026, because RFM research has indicated that the consumer market is very unlikely to be ready to take off before that time. However, multiple sources have reported that the manufacturing of the device has begun, which is by far the strongest indicator that Apple intends to launch a device now.
Any metaverse device launched into the consumer space is likely to struggle for traction, given the likely high price point and the lack of content available for the platform. Furthermore, given the mooted $3,000 price point versus the Quest Pro at $1,000 and Quest 2 at $400, volumes are going to be low because the draw of the Apple ecosystem in the metaverse is very weak compared to Meta Platforms.
VR developers will develop for Oculus first because it is the only platform upon which they have any hope of making any money. Apple will need to overcome this. This means a range of in-house developed content or paying developers to develop for its platform, given that economic rationale is likely to make many developers sceptical (notwithstanding that it is an Apple product).
A device for developers, not consumers
With a price point of $3,000, this looks like it will be a developer device to me. That means that it will sell in very low volumes and represent an example of the kind of consumer device that Apple eventually intends to produce so that developers can start developing for the platform.
This would help developers get up the learning curve so that when the technology is ready, Apple can produce a more accessible device with better capability and have the developers ready to go.
Apple has no choice but to address this segment because love it or loathe it, the metaverse is currently the biggest threat to the smartphone in terms of a device where consumers live their digital lives. The metaverse is still very uncertain, but if it takes off and Apple is unsuccessful in replicating the success of the iPhone with its metaverse products, then it will go the way of Nokia and many others.
This is why I have always thought that Apple has no choice but to address this segment, regardless of whether it takes off or not. It’s just the timing that I’ve been uncertain of, and it looks like Apple has decided to go sooner rather than later.
Apple is risking its brand
This is also risky from a branding perspective. This will be the first major product line created without the vision of either Steve Jobs, Jony Ive or even Evans Hankey, who took over design when Mr Ive left and then subsequently left himself.
Apple prides itself on making nice-looking devices with an excellent user experience, but given where we are on metaverse technology, this is next to impossible to achieve. Tim Cook has been incredible at sorting out Apple’s supply chain and building an ecosystem of manufacturing partners, but a creative genius he is not.
Furthermore, I’m not convinced that he has the depth of character to be willing to take the kind of risks that may be required to be successful in the metaverse.
Hence, I think that this launch puts Apple’s reputation for devices that everyone wants to own at risk. That’s why I was expecting it to delay a launch until the technology problems are largely solved, which I am still expecting in 2005 or 2026.
I do not think that Apple will push this device very hard, given its limitations. And I suspect that it will be low volume, predominantly for developers. This device is going to make no tangible difference to Apple’s financial performance, which looks set to stagnate with the smartphone market and the lack of economic recovery in China.
Hence, I continue to be ambivalent about the shares, as there are plenty of other places to look in this market.
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