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What are your thoughts about today’s show? We’d love to hear from you!
I have always agreed with Leo regarding the AR headset; I have no idea why Apple is so invested in this. However I’m guessing the iPhone was thought of the same way, that was a bit before my time…
Well, to be fair, I was very bullish on the iPhone and bought one immediately and have owned one ever since. I’ve never regretted it. Can’t say that about any of the VR headsets - even though I was an early supporter of the Oculus Rift Kickstarter.
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For me, it comes down to cost. If Apple tempers things by calling the goggles a “developer edition” (like Microsoft has done so far with HoloLens), then that seems ok. The problem seems to be, however, that all discussion about this product has been as if it’s a release intended for typical end-users (“typical” in this context meaning the average person who has $3000 to spend).
The adoption of this product hinges on functionality and cost. I don’t think anyone doubts that Apple will bring magical or “the best” functionality to this device, so the other fact (in my mind) will be how affordable it is. I see Alex’s point that if they shoehorn some incredible tech into this - then $3000 might be a ‘reasonable’ price. But even then - who is the market for this device? $3,000 is a lot to spend on a device - especially if Apple requires an iPhone to be paired with it as they do with the Apple Watch.
For true professionals like Alex - I can see this cost being worthwhile. It’s a business expense that will pay for itself over time. For those in an upper income bracket - of course I can see adoption as if you have the kind of disposable money to get this for entertainment, then you don’t have to worry about much. But for a typical person with the US median household income - I don’t see it being an option, especially with other VR options at much more affordable price points.
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Likewise, I saw an article in my feed today, that over 1,000,000 households in the UK have cancelled their broadband/landlines due to the cost of living increases.
For businesses who are looking into this technology, it isn’t that big an investment, for people with high disposable income, it is a new toy to show off for 5 minutes, until the next hot thing comes along.
For the majority, it if simply out of reach.
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I’m really skeptical about the leaked price. I believe we first heard the $3k price tag several years ago. Most of the rumors come from the supply chain, and price is not something that leaks, especially that far in advance. Who knows if this continued price push has been reconfirmed by the leakers, or stems from the one leak back in maybe 2021. Expensive? Sure. An exact number that’s 2x the current market high price? Doubt. They could use the same Keynote slide that cut the iPad price in half upon announcement and the press will be so giddy how less expensive it is compared to a supply chain leak from 2-3 years ago. That is IF this is meant for consumers, and not a developer platform.
MacRumors has an article that says the headset reportedly cost $1500 to manufacture. If that is close to accurate, and knowing what we know about Apple’s markup of their hardware - I can very easily see $3,000 as a possible price for this device.
The problem with these reports are, they just go through the hardware BoM, they don’t take into account research & development costs, software costs, marketing and other overheads, packaging, transport etc. (although, to be fair, transportation seems to be taken into account with at least one of those estimates).
It is a crazily stupid metric to use, because most people have no idea what other costs are involved and just think Apple is ripping people off.
How do you calculate the millions or billions spent on R&D into the unit price? How many do you expect to sell? Over what time period do you expect to recover those costs?
They might have high margins, but without knowing what all those hidden costs are, you can’t work out whether it is good value for money or not. That is why I hate these reports, they are next to useless, because they only include a very small part of the costs involved in producing these headsets, yet give the impression that that is everything that is involved.
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This is the problem they face. Apple has a certain cachet because they usually produce a well designed and executed product. I’m not sure that a wearable headset CAN yet be made the way Apple would do it if they faced no limits. So they’re going to be making compromises (like a belt clipping power brick/battery maybe) and so it’s not going to be as “special” as it would be if they managed to solve all the problems. So now they face the difficulty of deciding whether they introduce something at a lower margin because they want to make it approachable and figure they can increase the margin later, or do they keep the price high to keep it seeming “Apple” enough, but then risk the chance that it’s not good enough to sell well at the higher price.
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Likewise, I saw an article in my feed today, that over 1,000,000 households in the UK have cancelled their broadband/landlines due to the cost of living increases.
I looked into that earlier. It was actually a Citizen’s Advice survey of 6,000 low-income folks, 6% (so 360) of whom said they’d cancelled broadband due to cost of living concerns.
This was then extrapolated to the entire population to give the 1M number - which was then reported in the press as 1M people had cancelled broadband.
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I completely agree with you, but I think that supports my point that this will be an expensive piece of technology, even if it’s marketed toward end-consumers and not toward developers (as previous reports have suggested). I definitely do not see this in the $1500 range for cost - especially knowing how Apple rakes in the cash on its margins.
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