Steve Blank Apple Vision Pro – technology that finds its market

A version of this article previously appeared in Fortune.

In case you haven’t noticed, Apple has started releasing the Apple Vision Pro, a headset that combines virtual reality (VR) and augmented reality (AR). This product is an incredible technological masterpiece.

But the product/market fit of this first iteration is swing and miss.

I have seen other world-class consumer goods companies make the same mistake.

1. Discover amazing hardware that creates completely new capabilities
2. Forecast demand based on previous consumer product quantities
3. Consumer confusion by defining new categories without a frame of reference
4. Discover if your hardware does not match the needs of your existing consumer customer base
5. They work hard (read: spend a lot of money) to “push” sales to existing customers.
6. Revenues are woefully short of projections. Marketing and capital costs (new plants, high R&D costs) were predicated on selling at consumer scale. New products are burning up tons of cash
7. They ignore or fail to understand adjacent niche markets that would have “pulled” the product out of their hands if they had developed niche-specific demos and outreach.
8. Eventually, it turned into a niche market that was passionate about the product.
9. Niches are great beachhead markets, but they are too small to handle the inflated forecasts and burn rates built into consumer-scale sales.
10. Which one…
    • Product abandoned after multiple market transitions and leadership changes
    • Stay centered and keep going

Deja vu once again
I lived the equivalent when Kodak (remember him?) released a product called PhotoCD in 1990. Kodak wants consumers to movie Save your photos to your CDROM drive at home and then display them on your TV. When you put your film in the hands of a film processor, it scans the film and burns it to a compact disc rather than actually printing the photos. You will go home with a compact disc of your photos.

I got a preview of PhotoCD when I was head of marketing at SuperMac, a supplier of hardware and software for graphics professionals. The moment I saw the product, I knew every professional graphics client (ad agencies, freelancers, photography studios, etc.) would want to use it. In fact, they might have paid a premium for it. When Kodak said they were going to release PhotoCD, I was shocked. consumer product.

The problem was that consumers didn’t have CDROMs in 1990. drive Display photos. Even most personal computers at the time lacked these features. However, while every graphics professional owned a CDROM drive, most did not own a high-resolution film scanner, and PhotoCD would have been perfect for them, and was the perfect launch customer. To this day, I remember hearing the following lecture from a senior Kodak executive: “Steve, you don’t understand. We are consumer sales experts. We will also sell them CDROM drives.” (Kodak CDROM drives were the size of professional audio equipment and ranged from $600 to $1000 in today’s prices, depending on the model.)

(And when consumer CDROM drives became available, they couldn’t play PhotoCD discs because they were encoded with a proprietary Kodak standard to stick in their drives!) As a result, PhotoCD failed miserably as a consumer product. The subsequent shift to professional graphics users (a segment with which Kodak’s other divisions knew well) came too late, as inexpensive scanners and a non-proprietary standard (JPEG) became widely available.

So what lessons can Apple learn?

1. Apple is trying to push Vision Pro into their products. existing consumer customer
2. All demos and existing applications are aimed at consumer customers.
3. Apple hasn’t made a demo of how Vision Pro can be used to: new market This is where users purchase Vision Pro. for example,
   1. There’s evidence ( here , here , and here ) of demand in the adjacent mass market, helping millions of homeowners fix up things around their homes.
   2. There is evidence of demand for industrial applications outside of the consumer space (here). Every company with complex machinery has been experimenting with AR for years. Imagine car repair with Vision Pro AR tutorials. Or jet engine maintenance. Or the entire gamut of complex machinery.

All of this would have made a great Vision Pro demo for training and repairs. It’s hard to understand why Apple ignored such an easy victory.

correct
Apple’s entry into new markets by creating new product categories such as the iPod, iPad, and iPhone is unprecedented in modern corporate history. $300 billion (75% of sales) comes from non-computer hardware. They have also created an entirely new $85 billion+ subscription business model. App Store, iTunes, Apple Care, Apple Pay, Apple Cash, Apple Arcade, Apple Music, Apple TV.

It’s hard to remember, but the first versions of these products were released with serious limitations that were addressed in subsequent versions. The first version of the iPhone ran only Apple software, was a closed system with no app store, couldn’t copy and paste, and couldn’t record video. Originally, Apple Watch was positioned as a fashion accessory. It wasn’t until later that Apple realized that the killer app for Apple Watch was fitness and health. Finding the right markets for all these products while also correcting technical deficiencies took time and effort.

The same goes for Vision Pro. Apple marketers will find that unfamiliar adjacent spaces will provide their first “must-have” beachhead markets. The latest version will ride the wave of lighter and cheaper versions of the technology.

Apple CEO Tim Cook has made a personal investment in Vision Pro. More than any other company, they have enough resources (cash and engineering talent) to create the real product/market fit needed.

Here’s hoping they find it.

Filed under: Customer Development |