Why Apple's Vision Pro will likely succeed despite the price
and why you shouldn't buy $AAPL yet...
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The audience gasped collectively 😱 when Apple finally unveiled their Vision Pro:
And so did the market.
Apple tends to price its products at a premium and this isn’t the first time they’ve done so. But at $3,499, the market isn’t too confident of that Apple can pull this off.
Let's go back in time, take a look the instances Apple made us question about their insane pricing and how things turned out.
When the iPod was launched in 2001, not everyone were sold.
Here’re some comments taken from the MacRumors forum:
I for one am disappointed and think that Apple is making a mistake by trying to get into this market.
Sure the iPod is cool, and hell yeah I'd love to have one, but only for half the asking price of $399.
Apple went on to sell ~450 million iPods before the line was sunset in 2022.
Today, most would agree that the iPhone had revolutionized the smartphone industry. But the iPhone wasn’t immediately embraced even by the tech community when it was launched:
“That virtual keyboard will be about as useful for tapping out emails and text messages as a rotary phone. Don’t be surprised if a sizable contingent of iPhone buyers express some remorse at ditching their BlackBerry when they spend an extra hour each day pumping out emails on the road.”
Six years on, Apple now owns 30% of the smartphone market, and continues to pull crowds every time it releases a new version of the iPhone.
Then, there’s the Airpods:
The launch of the Airpods (and the news that the iPhone7 wouldn’t come with a earphone jack), inspired a generation of memes.
While the internet complained that the Airpods were “for the rich”, it was completely sold on on release date in Dec 2016.
As of 2021, Airpods revenue alone surpassed those of Snapchat and Spotify:
I wouldn’t be doing you a favor if I only mentioned their success.
Apple have had its share of failed products like:
Apple Newton: a handheld Personal Digital Assistant (PDA) launched in 1993
Apple Pippin: Apple’s attempt to enter the gaming console space
Apple Macintosh Portable: their first (but failed) attempt at portable computers
So, there’s no guarantee that the Vision Pro will be a success.
That said, they have a good chance at success because of…
🍎Apple’s Pricing Advantage
Some would argue that Apple’s Moat lies in its brand; Apple has the ability to price its products at a premium, while sustaining sales.
It leverages its brand through its strategic pricing (and ingenious supply control):
The good news is, they have a year to do so.
They have already roped in Disney’s help to feature Disney+ videos with the Vision Pro.
And, feedback from influencers who had tested the current iteration of the Vision Pro sounds positive.
🥽Competition will be Tough
Despite Apple’s advantages, the company will have to content against VR headset incumbents who are already engaging in a fierce battle to snap up a relatively small market:
Being the highest priced option, Apple will have to build up strong desire for its Vision Pro before its release.
Given Apple’s track record with innovative products, they might just be able to crack the VR market and overtake Meta’s current lead.
The current VR market remains heavily focused on gamers, however, Apple might be able to change that (and expand the market size along the way).
Zuckerberg has reportedly slammed the Vision Pro on its pricing and lack of technological breakthroughs. Meta has also announced its upcoming Quest 3, which will be priced lower at $499.
That said, Meta had been struggling to sell its premium Quest Pro headset, and had to drop its price down to $999.
📈Hold up if you wish to buy AAPL 0.00%↑ !
Now, if you’re thinking about adding Apple to your portfolio, hold up.
Although Apple did experience a drop on 5 Jun after its Vision Pro launch, it is currently still trading near all time highs.
