Digital life after smart phones began this week. Settle in, it’s going to be a bumpy ride.
Executives at Apple
Traders should consider taking profits now in Apple (AAPL) shares.
It’s hard to bed against Apple, I understand. The Cupertino, Calif.-based company gets a lot of big trends right. This is mostly because Apple unequivocally controls its customers’ sense of perception. The company is more like a fashion business than a traditional tech titan. Dictating to customers what they need to be on trend is an enviable position. It makes corporate failures unlikely.
Unfortunately, however, an expensive, face-worn computer is going to be a difficult sale, even for Apple.
Well-meaning projects from other deep-pocketed tech companies have not fared well.
Alphabet (GOOGL) released Google
All of these products are impressive pieces of tech. Their downfall has been a lack of need. Advances in digital tech mean that engineers can build immersive personal, face-worn computers. The larger question is should they? So far, AR and VR are solutions in search of a problem.
Apple’s mixed reality headset will be priced at a whopping $3,499. At launch Vision Pro will feature immersive video conferencing, the ability to consume high definition media content while virtually scaling the perceived screen size up to 100 feet, and access to traditional Apple desktop apps. Executives claim Vision Pro wearers will be able to navigate desktop app interfaces with a combination of voice, eye tracking and hand gestures. The video presentation is slick.
Tim Cook, chief executive officer, spent most of Monday hard selling Vision Pro as the next big thing, after desktop, then mobile computing and tablet computing. So-called spatial computing via Vision Pro is supposed to change everything.
Not so fast. None of the applications featured in early June were “killer”.
A lack of compelling content to date has been the big problem for VR and AR. There is simply no reason for smart phone users to ditch their beloved devices in favour of a computer they wear on their face, even if the experience is more immersive. This could change. Apple has a huge ecosystem of developers. Perhaps some third party will develop the killer app that makes Vision Pro a must have device. The company has time; the devices will not ship until sometime in 2024.
The reaction from investors might be different if expectations were low. At $180, Apple shares are near their its record high. Big capitalization technology issues have ripped higher in anticipation of new revenue streams from artificial intelligence. Some investment analysts have even pumped up Apple shares based on the rollout of its AR plans.
AR is not AI. It lacks sizzle, even with the blessing of Apple.
However, I must admit that I was wrong about a couple new Apple products in the past. I thought the watch would flop because men were unlikely to give up their Rolex or Breitling for a cartoonish watch face — and initial software was hard to use and kind of a joke. And I saw no real need for the iPad. Again the first products were underpowered, the first screens were small and the device had no evident killer app. Couple years later, after the release of the larger but lighter Studio Pro version, I got hooked on the iPad for streaming entertainment and the NY Times Crossword when traveling. To my credit, I should add I defended iPods (remember them?) as a better alternative to Sirius radio (this was a hot topic in the early 2000s). Bottom line: I’ll stick to my guns here. Investors should be cautious. To be sure, the VisionPro is at least nine months away, but the market will price its expectations much earlier. Apple shares could fall towards $157 over the next month as recent gains are digested and analysts reduce forward guidance based on AR headset sales forecasts.
Investors with Apple trading positions should reduce exposure now.
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