Despite its hefty price tag and a lack of support from established content providers like Netflix, Spotify and YouTube, early sales of Apple Vision Pro appear to be positive given how quickly shipping times started lengthening. While it remains to be seen whether Apple will be able to sustain this early demand, the company can bank on its strong ecosystem to satisfy the demand from early adopters, who are usually hardcore Apple fans.
Meta is not a fan
Meta Platforms Inc (formerly Facebook) is the undisputed market leader in AR/VR headsets (where Apple Vision Pro is trying to penetrate), with a 44% value share in 2022
Source: Euromonitor International
Mark Zuckerberg, CEO of Meta, posted his comments on the Apple Vision Pro and opined that the Apple Vision Pro, as compared to Meta’s Quest, comes in at a very high price point of USD3,499 per unit, is heavier and has wires attached, which affects useability and comfort. He concluded that Meta’s Quest 3 is “the better product, period”.
However, the Apple Vision Pro seeks to prioritise seamless integration with its Apple ecosystem (the visionOS) and is not designed to be a direct competitor to Quest. Meta’s Quest was Mark Zuckerberg’s trojan towards the metaverse, with a focus on the video games market that is projected to be worth USD208 billion in 2027 and for casual entertainment to combat Meta’s declining active users.
A bigger slice of pie – Entertainment
The pandemic has created a shift in consumers’ home entertainment activities, especially in how they play or have fun. While most pandemic restrictions have now been removed, consumers are still spending large pockets of time at home watching shows, connecting with friends and family virtually, and playing video games, even in 2023.
The shift towards online activities for home leisure is helping to create a large potential base of digitally entrenched consumers, who are looking to expand their online experience beyond gaming. Based on Euromonitor’s Voice of the Consumer: Lifestyles Survey, fielded January to February 2023 the number of respondents who paid for digital streaming services (video, music and live sporting events) increased in 2023, even as the consumer world emerged from pandemic-induced lockdowns and consumers started going out. As competition for subscribers starts to intensify, streaming incumbents like Netflix are also experimenting with extended reality (XR) services in a bid to grow its stagnant subscribers base and generate additional revenues via new business models.
Mobile games are hugely popular, due to the free-to-play mobile games. Revenues are generated as casual gamers proceed to buy in-game items, which are priced affordably to entice purchases. Another key interest catalyst is that mobile games also allow gamers to play anywhere and anytime.
In addition, online and console games are still gaining traction, as many gamers who started with mobile games soon realise the graphics and processor limitations on their phones and take to online gaming and console games to level up their gaming experience.
With the continued expansion of potential gamers, this presents an expanded market for new technologies. Gamers are inevitably keen and willing spenders, and often are the early adopters of new technologies like AR/VR headsets, currently valued at USD4.5 billion and projected to expand further by a 14% CAGR over 2022-2027. The advent of generative AI enables game developers to generate immersive, highly personalised, and fully adaptive XR gaming experiences. Each game play will be based on the user’s individual preferences (established from previous preferences), and the difficulty of a game can be tailored based on the user's progress, skill set or age. This significantly enhances the play experience, stimulating the interest in AR/VR headsets.
Wooing the digitally entrenched
Admittedly, the first generation of Apple Vision Pro is saddled with a hefty price tag and a lack of support from major, well-established content providers like Netflix, YouTube, and Spotify. Nonetheless, Apple can bank on its huge installed base of over 2.2 billion active devices to drive interest in XR and to support its Apple Vision Pro. As consumers spend more time online and in gaming, companies like Apple and Meta will be looking to woo these digitally entrenched consumers in the digital domain.
To succeed, companies must be able to engage with their customers at any time, any place and at the convenience of their customers. Companies cannot afford to sit on the fence, as the virtual world will become a way of life for consumers to socialise, shop and entertain themselves as they become more comfortable with the technology.
Read our article, Extended Reality (XR) Reinventing the Customer’s Experience, to understand why businesses need to utilise XR to engage with their customers or risk losing them (online and offline).