The Evolution of Vision Pro: Apple’s Multiproduct Ambitions

When Apple Inc. introduced the Vision Pro headset, it promised to revolutionize the tech landscape with its concept of spatial computing, aiming to transform how people interact with technology and consume media. However, nearly five months after its release, the Vision Pro remains a costly niche product with limited consumer uptake, prompting Apple to reconsider its strategy for the device.

The initial slow reception of the Vision Pro parallels the early trajectories of other Apple products like the iPhone and Apple Watch, which also took time to gain widespread popularity. The first iPhone, for example, did not become a revolutionary product until a few years after its launch, following significant price reductions, the introduction of the App Store, and 3G connectivity. Similarly, the Apple Watch found its niche by focusing on fitness and health tracking. This historical context provides some hope that the Vision Pro could eventually become successful, given enough time and strategic adjustments.

Despite its potential, the Vision Pro faces significant challenges. The $3,500 price tag is a major barrier, and even a substantial price cut might not make it accessible to a broader audience. Additionally, the lack of a compelling "killer app" and the general reluctance of mainstream consumers to wear a headset for extended periods further complicate its market adoption. These issues have led to introspection within Apple’s Vision Products Group (VPG), the division responsible for the headset. Top executives have re-evaluated their road map, deciding to focus on mainstreaming the Vision Pro while planning to expand into a multiproduct category, similar to Apple's approach with other product lines.

One early step in this revised plan is the Vision Pro’s international rollout. Apple plans to launch the headset in China, Hong Kong, and Singapore later this month, followed by France, Germany, Canada, Australia, and the UK in July. This international expansion requires slightly modified hardware, with the new model code-named N301A compared to the US version’s N301.

A more significant challenge lies in developing a cheaper version of the headset. Apple has been working on a lower-cost device, code-named N107, aiming to price it between $1,500 and $2,000. This version is intended to follow the Vision Pro’s high-end introduction. However, Apple is grappling with the difficulty of reducing costs while maintaining essential features. Potential cost-cutting measures include removing the EyeSight display, which shows the user’s eyes on the outside of the headset, and lowering the specifications of the internal virtual reality screens. Other considerations include using a less powerful chip and reducing the quality of the augmented reality passthrough visuals.

These compromises, however, risk diminishing the product's appeal. Even at a reduced price, the N107 would still be significantly more expensive than competing devices from Meta Platforms Inc., which raises concerns about its competitiveness. Additionally, prototypes of the N107 have a narrower field of view than the Vision Pro, and Apple is contemplating making the device dependent on a tethered Mac or iPhone to save on processing power and components. This approach could further detract from the device’s usability and attractiveness.

Despite the focus on developing a more affordable headset, Apple continues to work on a second-generation Vision Pro, internally code-named N109. This model is expected to feature a faster processor, improved external cameras, and potentially lighter and more comfortable hardware. However, the release of this second-generation model has been delayed, with the timeline pushed back from a planned 2025 release to the end of 2026 at the earliest.

In parallel, Apple is renewing its efforts to develop augmented reality (AR)-only glasses, envisioned as lightweight spectacles that users can wear comfortably all day. These AR glasses have long been considered a "holy grail" in the tech industry, but their development is still in the early stages. Although a launch date around 2027 has been speculated, internal sources at Apple are skeptical about achieving this timeline.

Apple's current predicament with the Vision Pro highlights the broader challenges of introducing groundbreaking technology to the market. The company is navigating a complex landscape where high costs, consumer habits, and the need for compelling applications play critical roles in determining the success of new products. While the Vision Pro holds potential, its future depends on Apple’s ability to address these challenges through strategic adjustments, international expansion, and the development of a more affordable version without compromising essential features.

Moreover, Apple's broader strategy involves balancing innovation with market realities. The cautious approach of introducing the Vision Pro at the high end, followed by a more affordable model, reflects a pragmatic recognition of the need to build a product ecosystem gradually. This strategy also underscores Apple’s commitment to sustaining its reputation for high-quality, innovative products, even as it faces significant hurdles in the consumer electronics market.

In conclusion, the Vision Pro’s journey so far has been marked by slow adoption and significant strategic rethinking within Apple. The company is focusing on expanding the device's market presence and developing a more affordable version while continuing to innovate with a second-generation model and AR-only glasses. The outcome of these efforts will determine whether the Vision Pro can eventually fulfill its promise of ushering in a new era of spatial computing and achieving mainstream success. Apple’s experience with the Vision Pro serves as a reminder of the challenges inherent in pioneering new technologies and the importance of adaptive strategies in navigating these challenges.