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🥽 Upside Analysis: How the Apple Vision Pro Could Change the World of Sports for Ever
The Apple Vision Pro has been on of the most talked about topics in the world of tech in the past 2 weeks. With 1M Apple Vision Pro units expected to be sold annually initially, Apple has the opportunity here to create a mass market for consumer AR/VR glasses which is what OEMs / Tech companies (Microsoft, Magic Leap..) have not been able to do. So as part of that, I thought it would make sense to focus on some key areas such as Apple’s future multi price tier strategy, the use cases and future sports experiences that Apple is likely to offer over time for the Apple Vision Pro.
Apple likely to adopt a multi price tier strategy with the Apple Vision Pro over time
Over the past week many experts have complained about the fact that Apple Vision Pro is too expensive ($3500). I personally don’t see this as a major issue. Why? Because, as I pointed out before, Apple customers are (1) used to pay a premium for Apple products (2) Apple has the highest multiple device ownership than any other OEMs in the industry. Ultimately Apple only needs to capture 0.1% (1M) of its 1B+ iPhone install base to sell 1M Vision Pro units per year which is allegedly their initial goal. To me that’s a reasonable goal for Apple.
Picture: Apple Vision Pro
But more importantly what those people forget is that Apple typically have a multi price strategy. This is what they did with the iPhone which has various SKUs at various price points (Apple, iPhone mini), and the iPad (iPad, iPad Pro, iPad Mini..). I expect Apple to adopt a similar strategy with the Apple Vision Pro and introduce various SKUs (Vision Pro, Vision Pro mini, etc..) at various prices. Now will it happen overnight? No. I also expect Apple to offer a lower cost refurbished version of the Vision Pro in the future. In addition I expect Apple to team up with Carriers (AT&T, Verizon..) to offer a subsidized version of the Vision Pro embedded with cellular connectivity (5G).
All this will help drive future sales of the Apple Vision Pro over time. In fact, Gene Munster, a well known Apple analyst, experts the Vision Pro to be available for $700 in 5 years. Now it is too soon to tell whether or not Apple will be able to hit such price point in this timeframe but I believe that the Apple Vision Pro will be available for less than $1000 in this timeframe.
Apple is set to leverage the creativity of its large AR dev community to come up with the killer use cases for sports
One of the biggest assets that Apple has to make the Apple Vision Pro a success is its large install base of AR compatible iPhones and AR developers. Back in 2017, there were 381M ARKit-compatible iPhones active. Back then, ARtillry Intelligence projected 505M ARKit-compatible iPhones active by the end of 2017 and about 850M by 2020 (chart below). The point here is that Apple can leverage its large install base of iPhone users. They already gathered a ton of data on AR behaviors and use cases. And they can leverage the creativity of its AR/VR developers to come up with the killer AR/VR use cases for the Apple Vision Pro.
Picture: ARtillry Intelligence
Apple Vison Pro expected to capture 10% ($38B) of Apple overall revenue over time
Whenever Apple enters a new product category, the next question often is: How significant will this new product category become as part of Apple’s overall revenue over time?
Last week, Gene Munster, Deepwater Asset Management managing partner, joined 'Fast Money' from Cupertino, CA to discuss Apple's new augmented reality headset the 'Vision Pro' and why investors should be optimistic.
Gene Munster believes that Eventually 10% of Apple's revenue' will come from the Vision Pro. Assuming that his prediction is accurate, and given that Apple revenue for the twelve months ending March 31, 2023 was $385B, that would mean that the Apple Vision Pro would generate $38B in revenue annually.
Picture: Gene Munster, Apple analyst, on CNBC
If Apple adopts a multi price tier strategy with SKUs at various price points, and team up with carriers to subsidize the price of the Vision Pro, and build compelling AR/VR apps, we think this is achievable. How long will it take? That’s the $1M question right now.
Apple is not the first company to launch an hybrid AR/VR headset. Apple’s competitors are set to follow suit
I also expect Apple’s competitors (Meta, Samsung, Google, Huawei, Sony, Microsoft..) to come up with competing versions of the Apple Vision Pro. Will it look exactly like the Apple Vision Pro? It will have a similar look and feel. Essentially it will be an hybrid AR/VR headset. Each vendors will leverage their key strengths. For example Samsung and Sony will leverage their expertise in high quality displays while Meta will focus on offering more social hybrid AR/VR experiences.
Btw Apple is not the first OEM to launch an hybrid AR/VR headset. In fact, in 2021, we interviewed Stan Larroque, the CEO of French startup Lynx, a leading AR+VR startup that built the world's first AR+VR hybrid headset which enables users to switch from an immersive, virtual world (VR) to an augmented reality (AR) world, and they were among the first companies to do so.
Picture: Stan Larroque, Lynx CEO
You can check out our full interview with Lynx CEO below.
Apple has yet to unlock key built in AI/Neurotech functionalities on the Apple Vision Pro
I also expect the Apple Vision Pro to become much more capable over time. In fact, Apple has yet to unlock key built AI/Neurotech functionalities. Here is a post below by a former Apple neurotechnology prototyping researcher who worked on the Apple Vision Pro. The bottom line is that it is a lot more advanced than one thinks it is.
In his long post, he described below how Apple was able to leverage its eye tracking technology and other technologies to be able to create biofeedback with a user’s brain by monitoring their eye behavior and predict where a user was going to click:
“One of the coolest results involved predicting a user was going to click on something before they actually did. That was a ton of work and something I’m proud of. Your pupil reacts before you click in part because you expect something will happen after you click. So you can create biofeedback with a user's brain by monitoring their eye behavior, and redesigning the UI in real time to create more of this anticipatory pupil response. It’s a crude brain computer interface via the eyes, but very cool. And I’d take that over invasive brain surgery any day”
You can check out his post here.
I believe that this is the type of feature and capability that will make the Apple Vision Pro stand out from the crowd over time.
Apple likely to integrate players’ data into AR/VR and offer VR training experiences for Sports enthusiasts and teams
Now the next question is: What types of sports experiences will Apple offer through the Apple Vision Pro. Apple already announced that it is teaming up with Disney (which owns ESPN) to offer optimized AR/VR content so what could this AR/VR experience look like in the future?
AR & Live biometric data experience on live TV
I believe that over time Apple will offer compelling AR experiences with live biometric data for live TV. As we mentioned before, over the past few years, sports broadcasters in the NFL have also been early adopters of AR for live sports on television. As illustrated below, one of the best examples of this has been sports broadcasters in North America who have teamed up with the NFL and Zebra to show the performance data of NFL players in real-time as AR overlays on live TV.
NFL players are equipped with Zebra’s RFID tags located in their pads that track the speed, velocity, and acceleration of players. Sports analysts can tap into this information during the broadcast to add additional analytical color — “Devin McCourty jumped the route and took it to the house for an 84 yard interception return, hitting the 22.05 miles per hour.” McCourty’s return was actually the fastest touchdown based on speed in all of 2018.
By comparison, in Australia, the NRL, a leading rugby league, has gone one step further and shared with fans the heart rate of coaches and players, captured via RFID and HR sensors, on live TV as an AR overlay during crunch time. In Japan, Panasonic teamed up with the Panasonic Open golf tournament, in order to show the HR and stress level of pro golfers on live TV. They were able to do that via facial recognition and algorithms.
Picture: Upside Global, 2022
I believe that these types of AR sports experiences on live TV will become even more compelling — and ubiquitous — over time. The Apple Vision Pro is the perfect platform to enable these types of experiences.
Live betting capabilities will enable fans to bet on the next play after reviewing a critical play via an AR replay with valuable info (speed, hydration level, fatigue level) during live sports games on TV. These AR experiences will also help broadcasters increase viewership and bring new sponsors. Teams will also be able to attract new fans, new sponsors and drive the sales of their associated content (jerseys, hats, etc.) which will help increase their top line.
But these types of innovative AR experiences could also emerge in NFL stadiums as well. In fact, we see a world where NFL fans will be walking around Levi’s Stadium wearing a pair of AR glasses displaying live statistical and biometric data (hydration level, blood pressure, HR, stress level, etc.) of players in real-time as an AR overlay. They will also be able to bet in real-time via 6G on the next play after viewing live performance data through a pair of AR glasses or an AR app.
I also expect Apple to offer innovative VR training experiences on the Apple Vision Pro and use the playbook used by VR training companies like STRIVR Labs. In fact, as mentioned before, over the years, VR training has also gained in popularity among NFL teams. STRIVR Labs, a Bay Area startup, and WIN Reality, have done a great job building a solid business in this area.
A few years ago we talked to Derek Belch, CEO of STRIVR Labs, who talked to us about the immediate value of VR for athletes, and especially for American football. One of the key benefits were training the athlete's mind without exerting physical fatigue. Derek provided us with a relevant example stating:
"In February, I sat down with Kevin Hogan, the quarterback for the Stanford Cardinals. Kevin used our product every Friday to experience every play to enhance his visualization. When they played Notre Dame that year, his completion rate was 17-21, with 274 passing yards, 4 touchdowns and no interceptions. Because he could immerse himself into the footage, he said post-game it was a joke how easy it was to see blitzes coming before it happened."
This example illustrates the utilization of VR has proven itself as a useful tool for NFL quarterback performance as mental preparation drills through technology have been beneficial in reading scenarios during actual games.
Source: STRIVR Labs, 2022.
Here is a video explaining how STRIVR Labs’ VR training system works.
Video: STRIVR Labs’ VR training system.
So what could the VR sports training experience look like on the Apple Vision pro?
Over the past 12 months we have seen the emergence of a new generation of VR sports training systems. Those training systems are using players’ live biometric data (e.g. speed of swing, HR, etc.). As illustrated in the picture below, companies like Trinity VR have built VR training systems using players’ biosensor data for MLB teams enabling baseball players and coaches to get real time feedback of the quality, speed of their swing. I expect similar VR training systems to emerge in the NFL where coaches will be able to get real time feedback about the biometric data of NFL players as they are going through virtual scenarios.
Source: Trinity VR, Upside Global, 2022.
Picture: WIN Reality’s VR training system for baseball players
In the future, I expect those VR training systems to use more advanced biosensors that will enable NFL coaches to measure new types of biometric data such as hydration level, human power, fatigue level, lactic acid, core body temperature, electrolyte, protein…Startups like Flowbio built a smart patch that can measure hydration, electrolyte level in real time. This is the kind of startups that are likely to be integrated into those VR training system.
We could imagine a VR training system capable of both measuring the players’ hydration level as well as recommending how much electrolyte the player would need to be fully re-hydrated. That would be very insightful and would help the VR training systems get to the next level. I expect Apple to offer such experience over time on the Apple Vision Pro.
Source: Flowbio, NRL, Catapult, Upside Global, 2022
Apple Vision Pro with advanced ChatGPT based digital coaching systems and WiFi 6/5G capabilities set to become a “must have” to enhance the fans experience within stadiums
In 2023 and beyond, as mentioned before, I also expect Apple to start offering the Apple Vision Pro embedded with advanced ChatGPT based digital assistants, and WiFi 6/5G. Now let’s close our eyes for a second, and let’s imagine a fan sitting on the sideline of the Patriots Vs 49ers game and wearing a pair of Apple Vision Pro. The fan would say: “Ok Siri, show me the best highlights of the Patriots quarterback”. That’s step 1. Now step 2 would be this type of experience where a fan wearing the Apple Vision Pro would be able to say: “Ok Siri, what are the odds that the Patriots quarterback will successfully throw the ball to his wild receiver and score a touchdown?”.
The digital assistant (e. Siri) would then say: “There is a 70% chance that he will score a touchdown! Do you want to bet on it?”. Now this is from a fans experience perspective.
What about an AR/VR experience from a coach’s perspective?
Let’s imagine the Patriots coach sitting on the sideline of the Patriots Vs 49ers game and wearing the Apple Vision Pro. Siri, embedded into the Apple Vision Pro would tell the coach “Coach! Player #12 is getting tired. His load (KM ran) is up 40% compared to the last game, There is a 60% chance that he might get injured if he remains in the 4th quarter. Do you want him to rest?”.
Granted this is unlikely to happen right away but I believe that this is where the industry is heading. Why? Because we are getting at a point where AR/VR glasses will soon be capable to offer those types of experiences. Digital assistants such as Google Assistant, Siri or Alexa are also fairly advanced and can enable advanced dialogs and queries. ChatGPT and generative AI will be a key driver here. Most teams also use AMS systems, GPS systems, and HR monitors. The only 2 challenges will be to get access to live biometric and statistical data during live games. For example, broadcasters, together with Zebra’s in field’s player tracking technology (based on RFID + UWB), typically give NFL teams access to players’ biometric data (speed, acceleration, velocity..) 4 hours after each NFL games. but if this changes and NFL teams start getting access to such data in real time during NFL games, we believe that we could see the emergence of such AR/VR experiences in the next 2-3 years. It is not a matter of “if” but a matter of “when”. Apple ha the opportunity, with the Apple Vision pro, to make that happen.
Nowadays we are already seeing glimpse of what this type of fans experience could look like. For example ShotTracker released an AR app which allows fans at a stadium to hold their phone and look at a player on the field and see their statistical data just as an AR overlay simply by looking at them at a live sports event. You can see below the ShotTracker AR app and watch the video of this AR app here.
Picture: Shottracker, 2021.
Bottom line: There is a big opportunity with the Apple Vision Pro to help create a mass market for AR/VR consumer headsets. This is what Microsoft, Google, and Meta, and others, have failed to do. But this time I think that Apple has the ability to get it done. When it comes to sports, the Apple Vision Pro is set to become the new immersive experience of choice in pro teams’ suits and in some training facilities. And I expect Apple to offer compelling AR/VR experiences on the Apple Vision Pro leveraging players’ data (statistical and performance data). When that happens it will change the game of sports in a way that we have not seen before.
As always we appreciate your feedback.
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