Elnora H. and William B. Quarton Professor of Business Administration and Economics, Coe College, Iowa
Bullish on Apple Vision Pro, 6/6/2023
After seeing Apple’s new product, Apple Vision Pro, I decided to upgrade my rating on $AAPL. I am very bullish on Apple. Steve Jobs laid the groundwork for Apple to keep inventing highly integrated tech products. Facebook can't compete at all. To pull off the integrated user experience of Vision Pro, Apple requires expertise in both hardware and software. When we mention hardware, it’s not merely about assembling various off-the-shelf parts, which is precisely what Facebook is doing. Apple vertically integrates every aspect from chip design to finger gesture recognition. Only Apple can do this. Neither Google, nor Microsoft, and certainly not Facebook can achieve this.
The only other integrated tech company I can think of is Tesla. The clash between Tesla and Apple is bound to happen in the future, but currently each is busy conquering its own territory.
Warren Buffett shies away from tech companies because he doesn't believe he can discern a winner in a crowded new industry. I never agreed with that. One could have foreseen GM and Ford emerging from the auto industry a century ago. One could have predicted Tesla's victory in the EV battle. Similarly, one can see Apple's dominance from miles away.
The moat Apple is building is its platform status. The Apple ecosystem is expanding daily, and the market shares of iPhones and Macs are continually increasing. The switching cost for any iPhone user is enormous. Apple is poised to be the AR/VR (or spatial computing, as Tim Cook calls it) platform. This platform is a natural extension of the Apple ecosystem. I can entirely envision using all my apps in the headset.
What's truly astonishing about Vision Pro is that this demonstration is only the beginning, much like the iPhone unveiled by Steve Jobs. Its applications are expected to explode in the next decade. I read on Twitter (@Molson_Hart) about a possible application. A plumber, lacking training or knowledge about a specific type of problem, can put on Vision Pro. AI can identify the problem and provide step-by-step instructions on how to fix it. This will forever change how we interact with our physical world. Do I still need a plumber? Why can't my Vision Pro AI guide me?
The possibilities are limitless. What if you could have a Vision Pro tutor to help you work on any homework problem? What if accountants could work using their headsets? What if a personal trainer lived in your Vision Pro? What if a surgeon could have a Vision Pro guide overseeing the procedure?
AR/VR and AI are rapidly changing our lives. It's clear that Apple is at the forefront of this new development. Therefore, I am upgrading Apple to “Dollar Cost Averaging.” I will regularly purchase Apple shares, especially when they are down.
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