justin sullivan
Much has been said in the media about whether Apple (Nasdaq: AAPL) Mixed reality or a newly launched MR device could disrupt the market not only against meta-platforms (META), but also against other Apple computing devices.
In particular, it could be after the iPhone What era was promoted? Or could the Apple Vision Pro form a new category within Apple’s wearables segment that could see it boost many Apple Watches in the future?
Could CEO Tim Cook’s ‘space computing’ usher in a new era for Apple’s next computing platform, or is it too early for Apple investors to get excited? AAPL’s continued rally from its January lows is likely signaling to Apple bears that investors are confident it can be a thriving class.
Meta CEO Mark Zuckerberg’s negative response to Apple’s foray into its current market dominance may be one of the most Decisive battles in the mixed reality market over the next few years.
The New York Times (NYT) reported how Zuckerberg downplayed Apple’s new entry during a recent all-in-one meeting. He criticized what Apple has seen as more likely to support Meta development so far than Cupertino hasn’t. No magic solutions to the laws of physics, he [they] You haven’t explored it yet. »
Additionally, Zuckerberg also noted that Apple’s seemingly “isolated” view of mixed reality is markedly different from Meta’s “socially grounded” approach. He pointed out that the strategies behind Apple Vision Pro are fundamentally different from the Meta approach, since “every demo that Apple showed was a person sitting alone on a sofa,” just like a single person.
Some bears at Apple might suggest that Zuckerberg might have felt the “pain” because the Vision Pro received rave reviews from the financial and tech media. Apparently Ben Thompson was in Stratchery’s movie High Expectations Going to Apple’s WWDC23 The Vision Pro demo he received was not only well received, it was “much better” than what he expected. was waiting.
The Wall Street Journal or Joanna Stern of the WSJ confirmed that her Vision Pro demo was “Hands down the best AR/VR headset you’ve ever used.”
At $3.5,000, I think it’s pretty clear that investors shouldn’t expect Meta Quest Pro, Expensive At $1,000, to compete at the same level. What if they weren’t supposed to compete directly? Does that make sense? Before going any further, I think it’s imperative that investors consider whether Apple and Meta intend to compete in the potentially booming AR/VR market.
Gene Munster of Deepwater Asset Management (formerly Loup Ventures) pointed out that Meta and Apple’s “Huge Price Gap” show their “very different approaches to marketing” in a pre-launch preview of Apple.
Zuckerberg’s comment confirms this assessment by adding: “Our vision and our values are different, and what is at stake to shape this platform. As such, it’s clear why Meta would be so eager to push for wider adoption of its hardware sooner with cheaper versions like the Quest 3, when Apple shouldn’t have it. base “The $1,000 Version” until 2027.
Therefore, I find it interesting that Apple seems “ready” to let Meta dominate the mass RM market over the next few years. Are Tim Cook and his team confident enough to leverage their proven capabilities? Fast Track Strategies to get ahead later or is Apple Banking ensuring its developer ecosystem is ready before shipping in 2024 ?
DIGITIMES reminded Apple investors that they should view the Vision Pro as a “technology demonstrator and not a commercially viable product”, given its price.
Thus, the supply chain forecast for the initial shipment wasabout 200,000 to 300,000 units in the first year. However, Apple’s supply chain also starts a bullish scenario of 500,000 units in 2024. Using Apple’s $3,500 price generates an estimated profit of $875 million at the midpoint. revenue of $1.75 billion and given Apple’s FY24 revenue estimate of $410.9 billion, the mid-term shipping guidance indicates an impact on revenues of only 0.21% for the year.
With that in mind, I think it’s clear that investors who hope Vision Pro will have an impact in the short term may find themselves very disappointed. However, Apple investors will likely be looking forward to what Vision Pro might lead to.
Munster defended an adoption curve that could see the Vision Pro represent 10% of Apple’s revenue for the full year. He estimates that “Apple could sell 75 million Vision units in its eighth year” by 2030. Thus, his valuation suggests that Apple could generate around $53 billion in revenue, based on a $700 ASP. In essence, Monster thinks the Vision Pro could be a big hit, even surpassing the Apple Watch, which shipped “45 million units in its eighth year.”
Therefore, the Apple Bulls are likely to signal that they are eager to justify their exorbitant valuation. However, I think one thing that seems clear is that the Vision Pro is unlikely to be the “perfect” post-iPhone era originally envisioned.
Stratechery also argued that the Vision Pro appears to expand the Mac and iPad space. He first argued that the Vision Pro could be used as a workplace productivity device [Mac] and consumption device [iPad]. However, he followed that up with a later note adding that the Vision Pro is unlikely to enjoy “the greater openness Apple is offering Mac users.”
As such, it’s hard to imagine the Vision Pro being able to replace the Mac “if the same limitations as iPadOS are present in VisionOS”.
And so I think it’s clear that the use cases in Vision Pro aren’t very well defined yet. It’s unlikely to replace the iPhone, Apple’s main revenue engine, and support notes. It is not likely to replace a Mac. Given its price, it’s too early to consider trying to replicate the success of the Apple Watch. And I guess Meta is more successful in pursuing its core social device strategy with Quest. In this case, I find it very difficult to understand the level of optimism generated by AAPL’s current valuation.
AAPL hit all-time highs this week as Apple’s momentum buyers continued to press higher, defying calls about its exorbitant valuation, which I’ve highlighted in previous articles.
The launch of Apple’s biggest device in eight years sounds really cool. But I’m skeptical whether expectations mimicking the success of the Apple Watch are realistic at this point.
I’m still on the sidelines, although I admit I should have upgraded my previous sell notes to buy without holding in December 2022 and January 2023. However, we are no longer in January, so better not not run after.
Classification: contract (repeated).
Important Note: Investors are reminded to exercise due diligence and not to rely on any information provided as financial advice. The rating is also not intended to state a specific in/out time at the time of writing, unless otherwise stated.
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