Apple & the Metaverse – Mixed signals

Will he or won’t he?

• Tim Cook’s change of tone combined with endless leaks suggest that a Metaverse device is imminent however it still makes no sense to launch now and I have my doubts it will launch at WWDC.
• Despite the probability of further delays to the launch of a Metaverse device, the Apple marketing machine is already beginning to gear up for a launch with Tim Cook sending a very different message to the position that he has previously taken.
• In an interview in GQ, Tim Cook talks up the possible enhancement that a Metaverse device can bring to communication and collaboration which is a far cry from positions he has taken before.
• Previously, he has questioned why anyone would use VR given how intrusive it can be wearing cameras all day long in addition to the poor user experience.
• However, now he states that his thinking is always evolving thanks to his mentor Steve Jobs and that one should not be married to the convictions of the past.
• I completely agree that one should always be ready to change with market conditions and trends but in this instance, I think he / Apple marketing is way too early.
• Hence, I suspect that the decision has been taken to launch a device sometime in the next 12 months (which I still think is too early) meaning that the message that the company puts out needs to be 100% behind it.
• For the company as a whole, this is clearly not the case as there are significant groups within the company that think that going now is a bad idea.
• I have always thought that Apple has no choice but to address this segment regardless of whether it takes off or not.
• This is because love it or loathe it, the Metaverse is currently the biggest threat to the smartphone in terms of a device where consumers live their digital lives.
• The Metaverse is still very uncertain but if it takes off and Apple is unsuccessful in replicating the success of the iPhone with its Metaverse products, then it will go the way of Nokia and many others.
• However, the technical limitations of head-mounted displays mean that a winning user experience is not yet possible which combined with its cost is likely to hinder take-off for some years to happen, if it happens at all.
• It looks to me like the device will not launch at WWDC but may be launched as a “one more thing” at the usual September hardware event.
• However, I still think it will be predominantly aimed at developers given its limitations and $3,000 price.
• That means that it will sell in very low volumes and represent an example of the kind of consumer device that Apple eventually intends to produce so that developers can start developing for the platform.
• This would help developers get up the learning curve so that when the technology is finally consumer-ready, Apple can produce a more accessible device with better capability and have the developers ready to go.
• Hence, I think that this launch puts Apple’s reputation for devices that everyone wants to own at risk which is why I was expecting it to delay a launch until the technology problems are largely solved, which I am still expecting in 2005 or 2026.
• This device is going to make no tangible difference to Apple’s financial performance which looks set to stagnate with the smartphone market and the lack of economic recovery in China.
• Hence, I continue to be ambivalent about the shares as there are plenty of other places to look in this market.