Post Vision Pro, What Does Everyone Else Do?

Since our post yesterday on the Apple Vision Pro Launch, and also recording an episode of the Circuit on the subject, we have been thinking a lot about what this new device platform means for anyone else hoping to build a VR headset Spatial Computing device. Right from the start, you can already see the problem – Apple has just completely reframed everything about the category, and the problem is much bigger than the name.

On the Circuit, Bajarin made the point that the Vision Pro is now the bar for everyone else. Table stakes in this space are much higher than they were 48 hours ago. This is not entirely surprising, the industry has been waiting for years to see what Apple would do her. Looking for inspiration, to put it politely. The problem is those table stakes are really high. Just take a look at all of the technology in the Vision Pro it is a fairly staggering list, deliberately designed and constructed.

The most obvious company suffering in any comparison is Facebook Meta. They renamed the company to position for themselves as a VR company. We imagine they are spending this week entirely rethinking their plans. In fairness, they have long tried to optimize their Oculus headset to be as affordable as possible, and have recently started moving into the Pro category and price range. They also have immense internal hardware talent thanks to years of heavy hiring in this group. They could probably match the Vision Pro spec for spec if they wanted to sell a $3,500 device.

That being said, we think they have a big problem with software. They abandoned their operating system (OS) last year. If they want to remain competitive in this space they will have to reverse course and build that OS now, and probably have to design several of their own chips to boot. This would of course be spectacularly expensive. The Street hated the metaverse bet and cheered when the company scaled back their plans.

Absent this, Meta could continue down the path of using merchant silicon and a stock “open” OS. Which is exactly where everyone else with hopes to enter the space now sits. There are a dozen or so companies building stock Android VR headsets, leaving none of them with much in the way of a competitive advantage. The best case outcome of this scenario would look like the smartphone market where cheap Android handsets capture unit share, but Apple sucks up all of the profits. But this market could also end up like the tablet market where Apple has all the units, in addition to all the profits.  This outcome seems very possible as no one really knows how consumers will use this new compute platform, and it will be Apple to educate them.

Fortunately, all these companies have time to work something out. The Vision Pro does not hit the market for at least six months and probably closer to nine. The app ecosystem for Vision Pro barely exists today. Moreover, at $3,500 Apple is not going to sell too many units next year, and even if they could sell more, it will take them even longer to be able to manufacture these devices at scale. So in theory, anyone, especially Meta, has almost two years to respond.

Photo Credit: Apple

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