“Awesome”, “historic”, “too expensive”, “totally dystopian”… The presentation of Apple’s virtual and augmented reality headset in early June stirred passions on social networks. The apple firm worked for years on the creation of this high-tech jewel which subtly positions virtual content (film, document, video, etc.) in our real environment. A launch that marks a profound shift in the reign of Apple CEO Tim Cook. Until now, this production and supply expert had indeed followed a more cautious strategy than the iconic Steve Jobs.
While Apple marked the 2000s with the launch of the iPod, iPhone and iPad, the group hadn’t ventured much into new territory since. The Titan project, which aims to create an Apple Car, is slipping. And if we except the very popular AirPods in the field of accessories, Apple had not launched a new category of product since the Apple Watch in 2014. Tim Cook does not have the talents of a perfect showman of a Steve Jobs and is less involved in product design than his predecessor. While the co-founder, who died in 2011, controlled every aesthetic finish with maniacal care, down to the shades of blue of an icon, his successor delegates much more willingly to his teams the task of making his vision a reality.
This discreet strategy is nevertheless devilishly effective. Cook pushed the group to diversify into services. In parallel with Apple Cloud, Apple Music and Apple Pay, the firm has also developed in-house platforms for streaming films and series (Apple TV), video games (Arcade) and sports coaching ( Fitness +). A great success, points out Emmanuel Longère, director of AR / VR projects at EY Fabernovel: “Services represented 20% of Apple’s revenues in 2022, or $ 78.1 billion.” Not to mention that this platform logic keeps customers in an ultra-closed ecosystem.
Security and performance
In 2010, a Mark Zuckerberg at the height of his glory bragged about the death of privacy. Tim Cook, he made the opposite bet and is committed to vigorously protecting the data of his customers. After standing up to the FBI in 2016, which was looking for a way to circumvent the encryption of the iPhone, as part of the hunt for terrorists in San Bernardino, the boss of the Californian company went a step further in 2021 by giving iPhone owners the ability to block app ad tracking. Although it is only the very first generation, Apple’s mixed reality headset already has strong locks: the user is recognized thanks to an iris scan and outside companies are not informed. what catches his eye.
This security approach has reinforced Apple’s positive image when Meta is now struggling to recover from the controversy over its data management. It also lays the right foundations for the shift to connected health, an ultra-sensitive information market with enormous economic potential. The Cupertino company is also betting big on it. It even made its Apple Watch pass the demanding validation process of the American drug agency: the FDA validated its detection of atrial fibrillation, a form of cardiac arrhythmia. A paid tactic. At the beginning of 2022, Counterpoint had calculated that Apple held a global market share of 36% for connected watches compared to 10% for its main rival Samsung. “In the decades to come, Apple’s healthcare ecosystem could prove more profitable than the iPhone,” said Neil Mawston, executive product director at TechInsights.
In recent years, Apple has made another major shift, although not very visible to the general public: the company has gradually abandoned the use of Intel processors and switched its computers to in-house chips (Apple Silicon M1, M2, etc.). A risky bet, but a success with flying colors: more efficient than commercial ones, its chips are now a strong selling point and give it complete control over the development of its products. Result ? Tim Cook turned Apple into a steamroller. Since his arrival, the company’s annual revenue has more than tripled – $394 billion in 2022 – and its stock price has increased thirteenfold. Its market capitalization – $2.850 billion – is higher than that of Meta (Facebook) and Alphabet (Google) combined. And Apple is one of the few tech stars to have made it through 2022 unscathed: while nearly 30,000 layoffs were announced at Amazon, 20,000 at Meta and 10,000 at Microsoft, the company barely touched anything. to its workforce.
Competition, ecology… The pips of the Apple
As powerful as it is, the group still faces many challenges. The legal saga which opposes it to Epic Games, creator of the popular game Fortnite, could drive a wedge into the lucrative model of the App Store: application publishers are demanding to put links to external payment solutions, thus escaping to the commission taken by Apple. This golden egg hen is also being scrutinized by regulators around the world. In Europe, Apple may even be forced to open iOS to competing app stores.
On production and material sourcing, the last three years have given Tim Cook a few headaches. The CEO of the Cupertino company has built a huge ecosystem of factory-cities in China, like Zhengzhou, nicknamed “iPhone city”, but today he sees the Sino-American tensions, as well as the policy of more and more restrictive of Xi Jinping, questioning this system. The relocations at work, in India or Vietnam, are by no means obvious. It will take time to train new highly qualified workers there for ever more complex devices, such as the Vision Pro virtual reality headset. And lots of money. Ditto for the group’s adaptation to current ecological constraints. Its batteries raise questions, such as the recycling or repair of its devices stuffed with rare metals.
“The macroeconomic context should not be underestimated, finally believes Alexandre Baradez, head of market analysis at the broker IG. With inflation and rising rates, there are strong risks linked to the overall drop in consumption. However, post-Covid US savings stocks have been consumed. And China’s post-Covid recovery, which Apple was counting on, remains average. This uncertain environment is a challenge, even for a gigantic tech company like it. .”
Apple’s recent strategic shifts therefore have an interest in paying off. However, the game is not won in advance. Connected health presents several challenges, including regulations that differ greatly between countries, and increasing competition. In addition to the start-ups that are being created in the sector, other giants like Amazon are advancing their pawns. Virtual reality headsets, on the other hand, are struggling to become more popular for three reasons. First, despite immense progress in graphic rendering, we are still far from the sophisticated virtual worlds that Mark Zuckerberg dangled in 2021. Developing headsets powerful enough to immerse the Internet user in a virtual world, while remaining autonomous, light and comfortable, is also incredibly complex. “At the industrial level, the task is even more difficult than for the iPhone 14 Pro, the brand’s most advanced smartphone model”, explains Stan Larroque, boss of the French start-up Lynx, who is preparing, she also, to launch a mixed reality headset. Last problem that Tim Cook has identified very well: these devices isolate the user from the outside world, which does not make you want to use them on a daily basis.
The headset unveiled by Apple on June 5, however, is promising. It skilfully mixes virtual and real environment: we see what surrounds us and our loved ones see our eyes, thanks to a technical prowess which makes the helmet artificially transparent. The image quality is high and the interaction well thought out: no joystick to hold, just look at the item you want to select and make a slight gesture with your finger. If the comfort is as good as the demo videos suggest, Apple might have found the martingale. Good “Jobs”.