Will Apple Launch A Glass Product?
With the Apple Worldwide Developer Conference going on, I have been contemplating if / when Apple will launch their version of glasses.
On March 2, an Apple employee “reported eye pain after working with new prototype, thought it may be associated with use. A source inside Apple speculated that this injury may have something to do with an augmented reality product Apple may be testing, something like glasses with an overhead display.”
If this rumor is true, it sounds like Apple could be launching the next big product investors have been waiting for, Apple Glasses (or maybe iGlasses?).
I am sure you are probably thinking, “Google has already tried this and failed.”
Why Google Glass failed
First and foremost, the general public wasn’t quite ready for this technology. There was no worldwide PR effort to educate the public about augmented reality. In fact, you probably believe several of these 10 myths that Google posted about Google Glass. Due to this lack of information, people who didn’t understand the product were worried that the glasses were being used to violate copyright and privacy laws. Additionally, this ability to film in relative obscurity led to privacy concerns among private citizens and caused Google Glass to be banned from many public places such as theaters, concerts and museums. On top of that, they were pretty ugly and severely lacked the “cool” factor one would expect from a product like that.
Why this time will be different….
By now you have probably heard of AR/ augmented reality. If not Macmillan Dictionary defines it as “the technology of combining real world images, video, etc with computer generated information or imagery.” Think Terminator 2 if you remember that movie.
Imagine being lost in a foreign country and trying to navigate where you don’t speak the language.
Or better yet, you aren’t lost and just are curious what is around you.
The odd looks you may receive from strangers will be well worth it when you can have all the life-enhancing features that A/R brings. I am sure you will still not be allowed to wear them certain places but the same goes for using cell phones now.
And as far as aesthetics, there is no denying that Apple has luxury appeal. Some have even accused Apple of being more of a luxury brand than tech company. This should position them firmly in the sweet spot on luxury/tech which will be desired from consumers of an A/R glass product.
The new “reality” – Could Apple over take the current leaders?
Take a look at Terminator 2 – 25 Years Ago:
Now take a look at a screenshot from the Snapchat app (5/31/17):
As you can see, these technologies are already here. The way you see the world will quite possibly be dictated by which brand you choose. Just as Google, Yahoo and Facebook searches may yield different results on what you are looking for, the same will go for information and ads you will see in this AR world.
Keep in mind, this technology has been around for a little while. Do you remember Pokemon Go? People everywhere were running around staring at their phones, nearly getting hit by traffic. Advertisers flocked to the app for exposure in this new hybrid real / virtual world. They see this as an opportunity to attract a whole new client base to their businesses.
If you have used Snapchat, then you have already gotten a taste of this technology and probably have noticed how certain filters are only available in certain locations. For instance, spectators of a sporting event can see exciting ads and filters specific to that event engaging audiences in a brand new way. Advertisers are still adjusting, but a glimpse into the future of advertising is here.
AR May be the end of Texting and Driving
It’s obvious that the days of us walking around staring at our phones are coming to an end. If this technology can help to eradicate the extremely dangerous practice of texting and driving, it may speed adoption.
Clearly, glasses are the next step as we move away from the phone. And the company that can successfully pull this off will have a product that will make the iPhone look like the iPod.
Snap has also launched Spectacles, which has been better received, possibly due to Snap’s nature of self-destructing videos or the really obvious light that lets others know when they are being filmed. I would imagine that these are going to be a predecessor to AR glasses by Snap.
Apple investors should be happy
After we looked at this potential market, think about the splash that Apple could be making if these rumors are true. They have $200 billion in cash and the ability to buy up any and all pieces necessary to launch the best product available.
Apple has clearly being hoarding cash and Tim Cook has already said he believes AR could be huge.
During his recent trip to the UK, Cook talked to The Independent about augmented reality. He said:
“I regard [augmented reality] as a big idea like the smartphone. The smartphone is for everyone, we don’t have to think the iPhone is about a certain demographic, or country or vertical market: it’s for everyone. I think AR is that big, it’s huge. I get excited because of the things that could be done that could improve a lot of lives.”
Apple should be a good horse to bet on
Look for the battle between Google, Apple, Amazon, Facebook and Microsoft to intensify in the space but Apple appears ready to make its first move.
Apple is positioned well because of the brand positioning and consumer loyalty, and is already considered stylish whenever they decide to enter this space.
The time seems to be right for the product as the glasses could be a lens into each person’s universe.
Apple has been considered a value stock for years now but maybe its time to start thinking about it as a growth again. Tim Cook has gotten flack for years for not making a huge splash with a new innovative product. This may very well be his moment.
Disclosure: Clint Kirby is long AAPL, SNAP and GOOG
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Clint Kirby – Chief Financial Strategist
DreamWork Financial Group
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