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Apple is finding out what's next



When you think about what's next, it's hard to miss the rising yellow line in the previous chart. Apple sees significant sales momentum in the battle against our wrists with Apple Watch and our ears with AirPods. These new form factors succeed in making the technology more personal to tens of millions of people. When you combine Apple Watch and AirPods, Apple's wear-out segment will soon outsource iPad when it comes to device sales.

Next wear resistance will be for our eyes. This battle is about a product that benefits from technologies now available with ARKit, Siri, and Apple's ML efforts. Apple sets the scene for smart glasses. A pair of smart glasses will initially boil down to an ML playground, cool looking and easy enough to wear all day long. There is one problem for Apple: The world is not entirely ready for such a product. As Jony Ive put it a few months ago, "there are certain ideas we have and we are waiting for technology to catch up."

Biding Time?

It's easy to believe that Apple can only spend its time until the world is ready for AR glasses. WWDC gave us a glimpse of how Apple is busy behind the scenes and preparing for what's coming next time. With ARKit, Apple uses hundreds of millions of iPhones and iPads to inspire 20 million developers with the potentials found with AR. A similar dynamic is about to make customers comfortable with items such as Animoji and Memoji ̵

1; items that are likely to be available today through a pair of smart glasses.

In many ways, Apple makes more than any other company to prepare the world for AR. Startup like Magic Leap has positioned itself as ambitious in order to control everything needed to develop a pair of mass market AR glasses. However, Magic Leap lacks some important ingredients needed to succeed. Unlike Apple, Magic Leap does not have a few hundred million units to see early technologies that will eventually form a pair of smart glasses. Instead, Magic Leap is forced to perform part of public R & D, releasing previous prototype versions of AR glasses in an effort to capture AR memory part that is increasingly flowing to Apple.

Another item that Magic Leap does not have, but that turns out to be incredibly useful for AR glasses, is Apple Watch. Apple has learned a lot about how personal technology can be used on the body by having nearly 40 million people wearing an Apple Watch on a given day. In addition, Apple Watch acts as a test bed to learn about proactive digital assistants. But the most important aspect of Apple Watch is how the device will likely end up playing a key role in serving as a place to put technology on the body that will help the power of smart glasses. In fact, Apple Watch may be more instrumental in Apple Glasses success than any other Apple product.

Apple Games To Lose

We see Apple withdrawing from the competition when it comes to grabbing real estate on our wrists and ears. The company has a good shot at doing the same in the fight for our eyes. Think of the different ways Apple is well positioned for AR glasses:

  1. Hardware and Software Integration. Apple has a few decades worth of experience, while competitors have only recently realized that hardware / software integration is important in terms of wear and tear.
  2. Controlling core technology . Apple's silicon efforts and wider ambition to control the core technologies that drive the devices give the company a head start that is likely to be measured for decades.
  3. Wearables production. Apple learns a lot about miniaturization with Apple Watch and AirPods. No other companies are close to Apple in this area.
  4. AR Technology . In just over a year, Apple has announced two major versions of its AR platform with hundreds of millions of supported devices. Years of extensive M & A activity in the ar arena begin to pay dividends.
  5. Developers. Apple has 20 million iOS developers focused on coming up with new experiences for a billion people. Enterprises such as Magic Leap and Microsoft lack this critical piece of the equation.
  6. Fashion and luxury . Apple has learned a lot about selling fashion with Apple Watch.
  7. Health / Medical. What could have started as an interest in Apple becomes a strategic mission. A pair of smart glasses stands to improve the well-being of hundreds of millions of people as one of the most important uses for such a device is an improved vision.
  8. Detailed demos . Apple has 502 stores around the world, with plenty of space for glasses.

There is an elephant in the AR room. This is Apple's game to lose.

Creating Tools

Five years ago, Apple leadership faced increasing pressure to announce something new. Wall Street and Silicon Valley were eager to see Apple reveal a new product category in the post-Steve Jobs era. For this group, the lack of a new Apple product category meant that management either struggled with innovation, or worse, suffered from a lack of imagination. The intense pressure to come up with something new probably played a role in Apple, which gives Apple Watch a huge product that was unveiled in September 2014.

Fast forward some years, and Apple faces a dramatically different environment. There is not so much call that Apple will come up with something new after Apple Watch. Instead, Apple's ability to monetize the iPhone experience in addition to hardware sales made people believe Apple is another type of company – one more focused on making money on existing users instead of dreaming about what which is next. In a way, many market observers are those who now suffer from a lack of imagination when it comes to Apple.

Apple is a design company focused on creating tools for people. Although some of these new tools can be placed as accessories for existing products, other tools will be able to initiate paradigm shift. The only way for Apple to be relevant in the future is to interfere with new tools that consist of a combination of hardware, software and services. Such groundbreaking tools will not likely be released every two or three years. In fact, Apple may go more than five, six or even seven years between announcing large new product categories. The point is that such paradigm shift is necessary.


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