More than half a decade has passed since Apple’s last new product launch, yet once again the tech giant has shaken up developer communities and the general public alike with the announcement of their latest product innovation. Much has been written about Apple’s latest product, the Apple Vision Pro, a mixed reality (AR / VR) headset based on the concept of “spatial computing”. The product received so much attention that for at least a day, the headlines were not dominated by some mention of Generative AI.
With the Vision Pro, the user – with the headset on – is able to layer digital content, such as their home screen of apps, into their physical space. By using their eyes, voice and hands, they can navigate, select and interact with their virtual space. For example, Vision Pro users can create multiple screens to interact on FaceTime while reviewing a presentation on their virtual screen. It also means instead of a physical television, the user can display and adjust the screen size to their liking. This is just the initial set of functionality and use cases introduced by Apple in their WWDC keynote.
Lens to assessing the product
Reviewers alike examined the Vision Pro across multiple dimensions.
Reviewers examined the innovation behind the Vision Pro. They looked at the technology, design and engineering needed to create such a product. For those that live demoed the Vision Pro, they looked at latency, accuracy of the eye, vision and hand gestures, as well as the overall build and comfort. Unlike the current leader of the headset space, Meta, the Vision Pro has no hand controllers.
Reviewers also examined the potential societal and wellness implications. With the nature of the Vision Pro designed for a single user, questions are understandably raised on what impact that will have on the user and the user’s wellness. Questions still surround the Vision Pro and the impact it will have on social interaction and engagement.
The relatively individual-centric product also raised questions on potential market demand. Would families purchase a headset for each member of the household? Given the sluggish demand for other AR/VR headsets, how will Apple build a market? Apple has a history of taking on small nascent markets and not only dominating them, but transforming them into massive markets.
And yes, there was a commentary on the pricing. A LOT of commentary on pricing.
Apple announced the Apple Vision Pro would start at $3,499 when it is released in early 2024. Many reviewers already dismissed the price as too high to generate demand. Others speculated who the Vision Pro was actually for, while some speculate that a cheaper version of the Vision Pro is already in the works.
What is overlooked in the pricing discussion, is not the price point itself – we’ll get to that in a bit – but the pricing strategy and testing Apple is doing for the Vision Pro’s eventual launch.
This offers a number of helpful insights for companies looking to establish their positioning and value in the market, and also experiment and test their prices.
Let’s examine four pricing takeaways from the Vision Pro launch.
Frame pricing for your customers
For most customers, there is very little reference to what an Apple headset should cost. Some might compare the Vision Pro to Meta’s Quest or other headset manufacturers.
Instead, Apple made it a point to help frame the Vision Pro not against other headsets, but against the products that the Vision Pro replaces or enhances. In the presentation, Mike Rockwell, Apple VP of Technology Development Group explains the comparison in this way:
“If you purchased a new state-of-the-art TV, surround-sound system, powerful computer with multiple high-definition displays, high-end camera and more, you still would not have come close to what Vision Pro delivers.” (see 02:01:00 from WWDC 2023 presentation).
Is this a truly accurate comparison? Perhaps not, but Apple is helping customers frame the comparison to make. Apple is also asking customers to do some mental math on what one or more of these other products would cost. A “new state-of-the-art TV”? At least $1,500 if not more. A “powerful computer with multiple high-definition displays”? If it’s one of the latest Apple computers announced at the same event, this can range from $1,299 to $6,999 (launch price for the new Mac Pro).
Help customers opt-in to the value proposition
Rather than leave customers wondering what the value of their latest product should be, Apple is helping customers to mentally wrap their heads around it (no pun intended).
Will this convince everyone that $3,499 is either affordable or reflective of the product’s value? Not necessarily.
When asked if he believed the average customer will be able to afford the Vision Pro, Apple CEO Tim Cook stated “I don’t know. I think people will make different choices depending on their current financial situation.” Apple understands the product in its entirety – from the technology and its price – is not for everyone to start and they are not trying to pretend that it is.
What Apple is working hard to do is establish that this is a very premium product and a sophisticated piece of technology. As Tim Cook describes it, the Vision Pro is “the most advanced piece of electronic equipment out there.” Note, Apple does not refer to the Vision Pro as a headset and makes no mention of virtual reality (VR).
The potential customer has to opt-in to this perspective and association. This may be the early adopters, those motivated by aspiration (think Apple Watch 1 and the rose gold band), or those buying to the argument that this is a substitution for existing electronics. For now, the value proposition is still being developed, and right now it may not include the mainstream customer.
Gather insights to enhance your value dimensions
There are plenty of skeptics or at least questions why this product is valuable and worth the $3,499 price tag. While some reviewers marveled at the technology and innovation, they still raised the question of “why?”. This is an important question, and not one that was fully fleshed out at WWDC.
Is it enough that the Vision Pro has impressive cameras, a soft fit, and advanced technology? Perhaps not alone. Gathering feedback from professional reviewers, technology pundits, and writers is helpful especially for a still-to-be-released product. Collecting this type of feedback on potential resistant points is valuable for product development. This feedback is also invaluable insight into pricing and willingness-to-pay, and ways to market the product.
While the polished demos showed some potential use cases, Apple is also leaning into their developer community – part of the reason why the Vision Pro was announced at WWDC. This will potentially help identify different use cases and test what connects for Apple customers . They will also get feedback from developers of potential limitations or challenges that may arise via the developers own customers and users.
Identifying value – and the challenges to it – helps you to work on the value narrative. For Apple, this feedback cycle – good and bad – helps the company develop reasons for potential customers to be willing-to-pay for the Vision Pro and defend its value and pricing.
Test and iterate
While this was not announced at WWDC, it is clear Apple will actively collect feedback about the product across all of its dimensions. This will in part be done via Apple’s developer community.
They will also use the time between the announcement and the Vision Pro’s launch to not only make potential updates to the product, but will also use the feedback to further refine the value proposition messaging and use cases for the target customer. They will most certainly focus efforts on improving the cost to manufacture a very complex and advanced piece of consumer technology. This is to improve margins, but also create financially viable pathways to alternative versions of the product.
Through this testing and iteration, will we see a lower priced Vision Pro? If history serves any guide, this is unlikely.
Final Thoughts
Apple is a master at connecting the trifecta needed to execute a successful pricing strategy: the right product matched to the right customer willing to pay the right price. The Vision Pro announcement provided insight into Apple’s pricing strategy, and how it is applied to premium new technology. Companies should consider Apple as an example of how to frame niche products and create value with a premium price..
For the Vision Pro, there remains many unknowns including the use cases, apps and developers, and the willingness-to-pay. This is one of the key reasons Apple will not be releasing the product for at least another six to nine months. Instead of working in the background, this can be viewed as live testing. During this time Apple will be actively working on not only readying the product, but ensuring the product is ready for the right customer willing-to-pay the prices Apple have been known for throughout its history – premium.
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