April 15, 2024
Brian Chiang tests the Apple Vision Pro headset during the first day of sales at the Apple Store in Palo Alto, California, on Friday, Feb. 2, 2024.  (AP Photo/Noah Berger)

Apple’s (AAPL) Vision Pro officially hit the market on Friday, marking the most significant product launch for the company since the Apple Watch in 2015. But Apple’s report waned enthusiasm on Wall Street for the company’s most ambitious product in years. China sales slump during the first quarter of the fiscal year.

Vision Pro, as Apple calls it, is a spatial computer. But for the average person, this is a high-powered AR/VR headset.

I originally used the Vision Pro after Apple launched it during its WWDC event in June 2023, and again just before its February 2 launch. And yes, it’s every bit as impressive as you’ve heard.

But a lot hinges on the long-term success of the Vision Pro as Apple looks for its next major product platform. And with storm clouds looming over Apple’s Cupertino headquarters, the company needs a win more than ever.

Apple’s tough start in 2024

Apple is facing many difficulties in the first few weeks of the year, and February is not looking any better. But the biggest problem the company is facing at the moment is the slowdown in sales in Greater China.

Apple’s third-largest market after North America and Europe, China has been a major catalyst in Apple’s growth story over the past few years as the country’s growing middle class and surge in smartphone sales have made the situation fertile for the iPhone’s popularity in the region. Land is provided.

According to Counterpoint Research, Apple was still the best-selling smartphone brand in China in Q4 2023, capturing 20% ​​of the market compared to local rivals Xiaomi, Huawei and Honor, which captured 16%, 15.2% and 15.1% respectively. Was. But Huawei saw a 71.1% year-on-year market share increase from last year thanks to its new 5G smartphones, while Apple saw a 9% decline.

Combined with China’s sluggish economy, this means Apple’s total Greater China revenue will decline from $23.9 billion in Q4 2022 to $20.8 billion in Q4 2023.

According to UBS analyst David Vogt, if Apple’s market share decline is permanent and the smartphone market grows an estimated 3% in 2024, “lost share in China could put a little more than $7B of pressure on iPhone revenues, up 3.5%.” iPhone revenue headwind and ~1.9% total company headwind.”

Regulatory headwinds abound

Apple also finds itself in the entanglement of regulatory problems in the EU as it works to navigate the bloc’s Digital Markets Act (DMA). Set to take effect this year, the DMA ensures that big tech companies don’t have too much power over the broader tech ecosystem. So far, Apple has announced that it will open up its platform, allowing users in the region to install third-party app stores and allowing app developers to provide users with third-party payment options beyond Apple’s in-app payment system. You will get the option to do so.

Brian Chiang tests the Apple Vision Pro headset during the first day of sales at the Apple Store in Palo Alto, California, on Friday, Feb. 2, 2024.  (AP Photo/Noah Berger)Brian Chiang tests the Apple Vision Pro headset during the first day of sales at the Apple Store in Palo Alto, California, on Friday, Feb. 2, 2024.  (AP Photo/Noah Berger)

Brian Chiang tries out the Apple Vision Pro headset during the first day of sales at the Apple Store in Palo Alto, California, on Friday, Feb. 2, 2024. (Noah Berger/AP Photo) (Associated Press)

but there is a problem. If developers decide to use external payment options, they will still have to fork over cash to Apple. However, the tech giant says this fee, which is equivalent to a 50 euro cent fee, only applies to developers whose apps are downloaded more than 1 million times a year. They will then have to pay that fee for each subsequent download.

Critics, including Spotify CEO Daniel Ek and Epic CEO Tim Sweeney, have hit back at Apple. One called the new rule “hostile.” And Swinney is saying it’s a “A devious new example of malicious compliance.” The EU has yet to determine whether Apple’s new rules comply with the DMA.

Meanwhile, in the US, Apple is dismissing a potential Justice Department antitrust lawsuit. According to the New York Times, the DOJ is looking into how Apple regulates its hardware and software as a means of keeping consumers locked into its ecosystem and fighting off competitors. Although any lawsuit could potentially take years to make its way through the legal system, it could distract the company at a time when it is looking to move into a new product category.

Here comes Vision Pro

The Vision Pro serves as Apple’s next-generation computing platform. At $3,499 it’s not exactly priced for the average consumer, but that doesn’t diminish its value to the company.

After years of development, the headset cannot fail. And while I’ve only been able to use it briefly in two separate sessions of about 30 minutes each, it’s hard to imagine a competitor coming along any time soon to match what Apple is offering.

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The display is the sharpest I’ve seen on an AR/VR headset, the fit is comfortable, and the interface is incredibly easy to navigate. Apple claims a huge library of apps for the Vision Pro, though notable big names including Netflix and YouTube are missing.

There’s also the fact that the Vision Pro is powered by an external battery, which Apple says gets two hours of battery life, which may be a turnoff for some users.

I’ll have a deeper understanding of what it’s like to use the Vision Pro when I have it for a longer period of time, but it’s safe to say that Apple has created an incredible piece of technology. Now it needs to be sold to the general public.

Just add this to the list of challenges the company will have to overcome in the year ahead.

Daniel Hawley is a technology editor at Yahoo Finance. He has been covering the tech industry since 2011. You can follow him on Twitter @DanielHawley,

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Source: finance.yahoo.com

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