The growth of Apple Vision Pro will be much slower than Apple Watch – News Block

Apple Vision Pro

The Apple Vision Pro will take a long time to become a major part of Apple’s business, according to a report, and the headphone business is far from reaching iPad sales levels.

Expectations for initial sales of the Apple Vision Pro are low, with claims that Apple has cut its initial orders for the headphones due to difficulties producing them, along with general complaints about cost. This may not necessarily be a big deal for Apple, as one report insists that it will take a long time for the headphone arm to make a major impact on Apple’s business anyway.

writing on Bloomberg’s In Sunday’s “Power On” newsletter, Mark Gurman compares the growth of the different branches of Apple’s empire and why Vision Pro might be glacial in growth by comparison.

The iPhone and iPad “made significant revenue contributors almost instantly,” Gurman writes, and the original iPhone derailed price concerns by selling a million units in less than three months and generating a third of Apple’s total revenue. in 2009. The iPad achieved 18% of total sales revenue a year after its debut.

The Apple Watch took much longer to get off the ground, but it has become “an important part of the business,” Gurman believes. While Apple hasn’t broken out Apple Watch sales into its own category, like the iPhone and iPad, it’s still part of the Wearables, Home and Accessories segment that brings in about $40 billion a year.

For the Apple Vision Pro, Gurman reasons, the very limited release schedule puts it on a much slower sales trajectory than the Apple Watch. Where the Apple Watch launched in nine countries for $349, the Apple Vision Pro will do so at ten times the cost, and only in the United States.

Expansion to other countries for Apple Vision Pro won’t happen until months after its launch in early 2024, and it probably won’t hit resellers until 2025.

culture and finance

Gurman also turns to history for his comparison, noting that society has been accustomed to wristwatches for 200 years, making it trivial to adopt a fitness tracker or smartwatch. A heavy headset that requires a separate power bank and must be worn on the face poses a challenge, as there haven’t been literal centuries of similar products on the market.

Breaking down the financials, Gurman says Apple’s original first-year goals a few years ago would have come in the “high single-digit million,” which soon became 4 million, then 1 million. Current sales projections for the first year are between 400,000 and 500,000 units.

At an average sales price of $3,700 for the headphones and extras like prescription glasses, Apple hitting the lower estimate would equate to first-year earnings of about $1.5 billion. To catch up with the iPad, Gurman believes headphones would need to grow 20-fold, reaching about 8 million units per year.

Despite the prospect of a cheaper model, reaching iPad revenue levels is “almost impossible for the foreseeable future.” Even with a cheaper model launching on the cards, Gurman reckons most people will stick with the “safer pick” of a Mac or iPad, at least until Apple comes out with a version closer to a couple of glasses.

The notion of the Apple Vision Pro being slow for the enterprise is not new, having been discussed in the past as being more of a long-term thing for the enterprise.

appleinsider He’s previously written about how the initial headset is clearly not “for everyone” and that it’s an aspirational product meant to convince a broader consumer base that they may want to wear it, or a future iteration, in the future.

Coupled with the march of technology making things smaller, faster, cheaper, and generally better, plus Apple having plenty of resources and cash to play the waiting game, no one can expect the Apple’s headphone project to become an iPhone-level seller. the bat.

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