Apple Inc (NASDAQ:AAPL)'s highly anticipated augmented reality (AR) headset, the Vision Pro, failed to sustain its early stock price gains after it was unveiled at WWDC on Monday afternoon.
Despite reaching record highs earlier in the day, Apple shares slipped back into negative territory as concerns over the headset's high price point overshadowed its debut.
Priced at a staggering $3,500, the Vision Pro is seen as inaccessible to ordinary consumers, limiting its mass market appeal.
Most analysts are skeptical that Vision Pro’s “eye-watering” price will act as a barrier to uptake.
“The disappearance of the early share price gains is likely to have been disappointment over the price point, putting it out of reach of ordinary people, and this limiting its mass market appeal,” CMC Markets UK chief market analyst Michael Hewson wrote in response to Vision Pro’s debut.
“It’s too expensive to democratize and rivals’ efforts haven’t paid much so far,” Ipek Ozkardeskaya, senior analyst and Swissquote Bank agreed. “Giving a fancy design to a product of little-interest may not be the next big thing for Apple.”
And there’s the fact that existing devices from Apple’s competitors have already struggled to gain traction. Meta’s virtual reality headset, for example, encountered difficulties and incurred losses, despite being priced significantly lower.
“You only have to look at the problems Meta has had with its own virtual reality headset and the losses incurred there, and its price point are much lower with the most expensive price point being at $1,000,” CMC’s Hewson noted.
The prevailing sentiment among investors is that Apple's high-end design may not be enough to generate substantial interest for a product that already has limited appeal.
The skepticism surrounding the Vision Pro stems from its lack of affordability and the failure of competitors' efforts to make similar devices a mainstream success. While the AR headset's unveiling was met with anticipation, investors remain unconvinced that it will be the breakthrough product that propels Apple to new heights. Whether Apple can overcome these concerns and carve out a successful path in the competitive world of augmented reality remains to be seen.
Contact Angela at angela@proactiveinvestors.com
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