Apple’s Latest Tech Could Be a Tough Sell

by Jon Markman
By Jon Markman

Digital life after smartphones began this week. Settle in, it’s going to be a bumpy ride.

On Monday, executives at Apple (AAPL) revealed Vision Pro, a new “mixed reality” headset. The ski goggle-like device is being dubbed as what comes next after the iPhone.

While investors are likely to be disappointed, traders should still consider taking profits now in Apple shares. Let me explain why.

It’s hard to bet against Apple, I understand. The Cupertino, California-based company gets a lot of big trends right. This is mostly because Apple unequivocally controls its …

Customers’ Sense
of Perception

The company is more like a fashion business than a traditional tech titan. Dictating to customers what they need to be on trend is an enviable position. It makes corporate failures unlikely.

Unfortunately, however, an expensive, face-worn computer is going to be a difficult sell, even for Apple.

Well-meaning projects from other deep-pocketed tech companies have not fared well.

Alphabet (GOOGL) released Google Glass in 2013 for early adopters of adventure tech. Months later, those buyers were savaged when the rebirth of Glass as an industrial augmented reality product was shut down in March 2023 after dwindling enterprise interest.

Microsoft (MSFT) pitched its Hololens AR headset to the U.S. military as a next-generation fighting tool. Congress cancelled a $400 million contract after technical problems.

Then there’s Meta Platforms (META), which continues to struggle with its Quest VR headset for gaming and the metaverse. Prices for Quest were recently slashed from $1,500 to $1,000 to bolster slumping sales.

All of these products are impressive pieces of tech. Their downfall has been a lack of need. Advances in digital tech mean that engineers can build immersive personal, face-worn computers … but the question is, should they?

So far, AR and VR are …

Solutions in Search
of a Problem

Apple’s mixed-reality headset will be priced at a whopping $3,499. At launch, Vision Pro will feature immersive video conferencing, the ability to consume high-definition media content while virtually scaling the perceived screen size up to 100 feet and have access to traditional Apple desktop apps.

Executives claim Vision Pro wearers will be able to navigate desktop app interfaces with a combination of voice, eye tracking and hand gestures. The video presentation is slick.

CEO Tim Cook spent most of Monday hard-selling Vision Pro as the next big thing after desktop, mobile computing and tablet computing. So-called spatial computing via Vision Pro is supposed to change everything.

Not so fast. None of the applications featured Monday were “killer.”

A lack of compelling content to date has been the big problem for VR and AR. There is simply no reason for smartphone users to ditch their beloved devices in favor of a computer they wear on their face, even if the experience is more immersive.

This could change, though. Apple has a huge ecosystem of developers. Perhaps some third-party developer will create the killer app that makes Vision Pro a must-have device. The company has time; the devices will not ship until sometime in 2024.

The reaction from investors might be different if expectations were low. At the time of writing, Apple shares are trading around $180, near their record high. Big capitalization technology issues have ripped higher in anticipation of new revenue streams from artificial intelligence. Some investment analysts have even pumped up Apple shares based on the rollout of its AR plans.

AAPL price chart.
Click here to see full-sized image.

 

AR is not AI. It lacks sizzle, even with the blessing of Apple. However, I must admit that I was wrong about a couple of new Apple products in the past.

I thought the watch would flop because men were unlikely to give up their Rolex or Breitling for a digitally animated watch face, and the initial software was hard to use and kind of a joke.

Plus, I saw no real need for the iPad. Again, the first-generation iPads were underpowered, their screens were small and the device had no evident killer app.

Fast-forward a couple years, after the release of the larger but lighter Studio Pro version, and I was hooked on the iPad for streaming entertainment and The New York Times crossword puzzle when traveling. To my credit, I should add that I defended iPods (remember them?) as a better alternative to Sirius radio (this was a hot topic in the early 2000s).

Bottom line: I’ll stick to my guns here. Investors should be cautious. To be sure, the Vision Pro is at least nine months away, but the market will price its expectations much earlier.

Apple shares could fall toward $157 over the next month, as recent gains are digested and analysts reduce forward guidance based on AR headset sales forecasts.

Investors with Apple trading positions should reduce their exposure now.

That’s all for today. I’ll have more for you soon.

All the best,

Jon D. Markman

P.S. Just weeks from now, the Federal Reserve will roll out a new digital platform that gives unelected officials the power to spy on your financial transactions. Worse yet, they’ll now have the power to potentially seize your money at will. That’s why Dr. Martin Weiss has called for an Emergency Summit to Protect Your Money from Imminent Government Attacks. Click here for more while there’s still time.

About the Contributor

Jon D. Markman is winner of the prestigious Gerald Loeb Award for outstanding financial journalism and the Society of Professional Journalists' Sigma Delta Chi award. He was also on Los Angeles Times staffs that won Pulitzer Prizes for coverage of the 1992 L.A. riots and the 1994 Northridge earthquake. He invented Microsoft’s StockScouter, the world’s first online app for analyzing and picking stocks.

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