Point (unexpectedly) proven regarding Vision Pro

So this happened.

Reading between the lines here, sales of the Vision Pro have not only failed to hit the expected levels, but also fell far enough short that Apple will be "reviewing and adjusting" their strategy for this class of device.

In simpler terms that means that resources will be pulled off. Perhaps not completely, but definitely reduced. And that means decreased likelihood of future generations of the product as well.

As the title indicates however, I didn't expect to be proven right on this? But what was I correct on?

Favorable reviews frequently concluded on the product, not in the current state, but where they felt it would be in time. And consequently, such reviews mislead the masses and perhaps even helped convince consumers to buy a product which did not currently and had a chance of not ever delivering on the reviews promises. 

In general, no other company would ever have been afforded such leeway. Especially not on a product costing several multiples over the best competitor. 

It it the difference between saying "This headset is current a 5/10, but if they sort out features X and Y and address these bugs then I could see it being a 9/10" and something more like "Sure the X feature is currently a bit gimmicky, but it is in beta and Apple will polish this experience, I give the headset an 8/10".

If you think I'm mis-categorizing let me quickly dig up some reviews.

• Here: Review admits that the device is heavy, battery life is poor, you can't really do much gaming on it and talks about how it is paving the way for a spatial computing future (a statement which acknowledges that the future isn't here but also gives Apple the benefit of the doubt and asserts with absolute confidence that it is coming). Despite all of this, scroll down to the conclusion and voila! 
• "And yet if I had the cash and the chance to buy one right this second I wouldn't even think twice about it."
• This is more prototypical again. And it's from CNet which is a somewhat reputable source people might regularly use for trusted reviews.
• Under the "Where are all the magical new apps?" heading is this gem: "Indeed, where are they? This is what I keep waiting for, but I know I have to be patient: it's been only a month."

There are a small handful of positive reviews which ignore all of the pitfalls or justify them away. And I think that these people know what they are doing and are intentionally going this as I don't believe a demographic actually exists in which this product can be reviewed favorably at this price point and the current level of completion.

Issues I have with the product are:

• Device weight: Product is heavier, even with the battery offloaded externally to the Quest 3 which is itself seen as a product which should aim to be lighter
• Cost: Fairly self-explanatory at $3500 USD it costs more than most established Apple products
• Is a Beta Product: Despite the marketing and branding, at launch key features used to sell the device were in an incomplete state like Personas. If the features you're using to sell the device are still in beta then the device itself is still in beta.
• Ecosystem: Insufficient number of native apps at launch. Even devices like the iPad which had to be targeted separately had more native apps at launch when compared to this which launched years later.
• External battery pack: Not only does this add insult to injury on the weight of the device, but it is a move which would not be considered acceptable for anyone device maker, it impacts mobility of the device and limits use cases. While I personally don't have an issue with this, it is clear that the general public should

What infuriates me most is that Apple is not unaware of any of this. This product, was more like an Apple Watch launch than an iPad. Both of these are products which I feel Steve Jobs would not have allowed to see the light of day. Worse? The potential fixes here would have been relatively simple. Here are some suggestions:

• Drop the "Pro" from the name. It is a first gen product and clearly still a beta product. Microsoft had the balls to target Hololens to industries where it made sense first. And Apple could have easily crushed Microsoft on this avenue and even at this price point. There is nothing wrong with allowing consumers to buy it. Though, maybe it should have been online only.
• Drop the price. If you're going to sell a beta product to mainstream consumers, have the guts to accept that on your bottom line. A lot of people like to defend Apple's margins, but in this case the product itself is more akin to the original iPad and I'll talk on that below.
• Wait. This is a pretty simple one... wait until Personas and the creepy eye thing are out of beta. Send out some dev units or provide an emulator and encourage some partners to get on board. Perhaps even pay them to do it. And when the key experiences are ready and there is a decent presence in the store... then release it.

I want to take a little extra time to talk about margins. Every review, both good and bad talk about the price point because it is unavoidable. The price tag is astronomical. The Quest 3 is the nearest mainstream device, it is very similar in terms of design and offers many of the same features at about 1/7th the cost. So, price is VERY important here.

Had Apple released this with margins similar to competitors they would likely have exceeded their shipment estimates and then in turn accelerated the industry resulting in a "margin lag".

Where most Apple products are just a small iterative improvement over a current gen product (new iPhone and iPad releases) or a new product which is just a minor iteration on current gen competitors (original Apple Watch), this product is much more like the original iPad release. The hardware is a significant leap over what exists.

With a small iterative improvement margins will only grow slowly. Manufacturing costs of the device are likely to improve over time, but not by much. So, your initial margins need to be high if you want them to remain or end up high. And, you're also in a more well established space and do not need to use price as a carrot to drive the masses to your product to help maintain or grow those margins.

With first gen products that push the industry far enough ahead it is a different story. It is hard to sell a $3500 MR headset to the masses. However, there are SO many bespoke components in that headset and if you can drive the demand up enough... the margins will increase at a higher rate than on a typical product over time. Basically, at the moment Apple is the only one using such high resolution MR headset panels at any volume. The same goes for their chipsets. And the assembly process for the device itself is also new and novel. There are some many pieces to this device which are only as expensive as they are as a direct result of being both so new and produced in such small batches.

A $1600 USD Vision Pro would have had razer thin margins at launch (estimated at just over $1500USD to make) but could have ended up closer to the 20-25% that the original iPad ended at and then growing that over time. By the time a 3rd or 4th generation rolled out, they could be back up to their usual 60% margin and owning the industry segment. 

Greed killed this product.