Apple's Next Big Thing
Is it 2007 all over again?
Hey all, Robin here—I hope you enjoyed my last Substack on Match Group’s plans to change dating forever. Today, we’re going to be doing something a bit new and looking into how Apple’s rumored AR/VR headset could change the future of tech, the metaverse, and possibly be as disruptive or even more disruptive than the iPhone.
What we know about the headset
We know just about nothing other than it is supposed to be like a set of ski goggles with a weight of “0.33 pounds”.
So basically nothing, but we do know it is being worked on.
Many people throw out details and theories of the hardware, but since there’s no way to confirm those key points (they don’t really matter anyways), I’m going to ignore them.
Apple is a mind numbingly secretive company.
However, we knew nearly nothing about the iPhone in 2006, yet we had a few rumors for years of a type of smartphone that had applications.
No app store.
Nothing.
We know just as much about the rumored headset—which is set to be both an augmented and virtual reality—as we did the iPhone.
Eventually, those rumors ended up being true.
For the sake of argument, let’s assume these rumors are true and look at some more evidence.
iOS 14 and material design
iOS 14 is Apple’s most recent version of the iPhone operating system that is actually pretty damn cool—they finally introduced widgets and largely changed key design elements.
The kicker is when you look at the preview page of the update you notice a lot of mentions of the word “compact” and “easy on the eyes”.
Now call me crazy, but this update seems like they were trying to test key design elements, especially with compact calls, widgets, maps, and picture in picture.
Above all else, the biggest indicator by far is “App Clips”.
App Clips are easy to discover and use right in the moments you need them. Like renting a bike, paying for parking, ordering food, and so much more.
Let’s say we’re actually all wearing those strange looking ski goggles and we want to use an app.
How on Earth do we do that?
Well one way to do it is the Oculus style which is to have these joystick style controllers in our hands (which is convoluted), or we can just have the majority of these things linked to our phone and the headset acts as some kind of monitor.
We’re going to need really simple apps that can serve really one-off purposes like sending a payment.
I’m thinking more of the latter based on what we know, but it’s possible Apple has something cooking behind the scenes.
Oh yeah, and there’s also this update for maps.
Overall, these rumors have substantial weight when we look at the latest IOS update’s design and the emphasis on “compactness” and augmented reality features.
The state of VR and AR and why Apple wants to enter
VR and AR have quickly gone from “that seems cool, we should maybe consider working on that” in 2014 to “holy moly, this is a massive opportunity and we need to jump on this now in 2021 - thanks to Facebook rebranding themselves as Meta and the success of the Quest 2 headset.
The augmented and virtual reality market size was valued at $14.84 billion in 2020, and is projected to reach $454.73 billion by 2030, registering a CAGR of 40.7%.
-Allied Research
It’s highly likely that Apple sees this as their next big thing in a similar way to how they saw the iPod, iMac, and iPhone.
After all, Apple has remained relatively stagnant these past few years and hasn’t introduced any products that are new or innovative. They have largely played hot potato in keeping up with tech and focused on becoming a profitable company.
However, now that Apple is armed with a massive balance sheet and relatively great growth for a large established business, they could see this as a chance to reinvent themselves.
Defections everywhere
The hiring of Andrea Schubert—Meta’s former head of communications in Augmented and Virtual Reality research—is a key indicator of their interest in the field and also makes no sense.
Why would you poach a communications expert to reportedly head up product?
Why would you poach a communications expert to reportedly head up a product?
It makes no strategic sense and it’s a very worrying sign of the strength of the team. Could Apple not find an internal product-focused engineer to head up the project?
Consequently, Apple and Meta have been waging a very quiet war in poaching talent.
According to Mercury News (Silicon Valley’s OG news publication), Meta has hired around 100 engineers from Apple in the last few months, with Apple hiring a few key Meta employees.
Apple has beefed up its defenses by dishing out lavish bonuses between “$50,000 to as much as $180,000 in some cases” for engineers in silicon design, hardware, and select software and operations groups.
All of those groups in the bonus category would be key for creating an AR/VR headset and is pretty damning evidence of Apple’s intentions.
2007 vs 2021
The Apple of 2007 and the Apple of 2021 are two very different companies.
Both of them are titans, but the men at the helm are radically different. One was a product obsessed CEO, Steve Jobs, and the other is a Sales and Operations CEO, Tim Cook.
Steve was a hardware heavy CEO.
Tim is a software heavy CEO as he thinks this is Apple’s next big move.
While this may seem relatively insignificant to most people, it’s the most important thing to me.
Sales and Operations are the kind of people you do not want to be in charge of products, you want customer-obsessed people in charge of products.
Tim Cook has largely fumbled Apple’s latest moves into Fitness and Television because, as it turns out, entering a market for the sake of entering a market is a surefire way to waste time, money, and leave customers unsatisfied.
TV+ is relatively insignificant and has lost to competitors like Netflix, Disney+, and Hulu.
It is the same case with Fitness—the move into Fitness with Fitness+ fundamentally solves no problem.
What exactly is the unique selling point here? Is it that you can see your statistics on a screen or something else?
The programming isn’t unique, which is the main reason why people subscribe to services like this, and there are no public details on how well the service is doing (it’s grouped in the broad “services” category”), so we don’t know if it is really a flop or not.
While these two businesses are extremely insignificant to Apple’s bottom line, it’s a very worrying sign.
Steve Jobs put it best in this interview during the early 90s.
What’s next and why does this matter?
Looking towards the future, Apple’s move into the AR/VR with a possible headset would elevate the Metaverse to the confirmed future of the internet.
It would also give Apple tens of billions of dollars in revenue on a potential app or experience store that they can create for developers.
When Apple moves into something, they normally do it because they know that it will be vital to the future (at least on paper).
As more and more companies move into AR and VR, the Metaverse isn’t that far off for a lot of these companies.
Could Apple be trying to do the iMac again?
It certainly looks like it as the iMac was Apple’s first computer that was specifically catered towards browsing the internet.
We’ll have the pleasure of watching and possibly even investing, if Apple does go down this road.
Disclaimer: This is not financial advice in any way shape or form. I’m literally just an angry and angsty bird writing down my thoughts on the future and technology. I can’t believe Amazon didn’t have my toy— this is rigged.