I'm not saying Vision Pro won't eventually justify itself, but $560m revenue is likely nowhere near the cost for this programme so far.
This project has been rumoured to have hundreds of engineers for 5+ years, that's that revenue already (let alone profit), then the manufacturing setup, new chip development, etc.
Even if this product makes $2bn revenue, which could be unlikely just based on the rumoured manufacturing limitations and number they expect to manufacture this year, it probably wouldn't be justified once you figure out the profit margins. This is clearly all about the next product, or the one after. It's about the iPhone 4 launch, for this product, not the first, 3G, or 3GS practice runs.
Apple have a history of healthy margins, but huge production costs on their high end stuff, so while this is $3500, I wouldn't be surprised if it's still only 50% margin. That's great, but it's not the 70% one might expect from such a high price, and it will be because of things like maybe the body costs $200 rather than $50 because of some silly uncompromising design choices that don't make sense for high volume consumer hardware.
A lot of the individual tech pieces to make it work have been going into other products for years. Like head tracking in AirPods, face id, Memoji, probably lidar, certainly other things that aren't coming to me right now.
A lot of things that seemed like gimmicks that turned out, it seems to me, were really for Vision Pro.
I highly doubt that the head tracking on AirPods is the same implementation as VP. VP uses iris ID, not Face ID. Memoji is a non factor. Lidar’s usage is probably also very different.
There’s minor overlap but I feel like the R&D cost of the VP didn’t have much overlap with other products. Except the M2 SoC.
Yea but the inherent costs are not in the implementation. The complexity of integrating something like head tracking is only 10% to do with the “type” of head tracking.
So even if VP head tracking works differently, the groundwork has been laid for that category of feature.
Why wouldn't the head tracking be the same? They use the same H2 chip as AirPods. FaceID probably implemented ideas used by iris ID. Learnings from Memoji almost definitely underly the personas. Lidar in the wild I am sure provided valuable data and got developers used to working with AR.
From what has been reported - a lot of the AR things, including RealityKit and ARKit came from the TDG which are also who made VP.
The project could be 7-10 years old but they didn’t start on day one with hundreds of people. Let’s say a core of ~50 people for 5 years as proof of concept then ~350 people for another 5 years at 300k per person on average, that’s a 600 million dollar investment.
Sure they could have a larger team, but they also don’t pay testers anything close to 150k year.
$300k/annum is the carrying cost of low to mid engineers at big tech. For the kind of talent you need to pull this off, I’d at least double it (and maybe closer to $1M/year for the early folks)
Employees are expensive. That $200k salary comes with 100k in RSUs and then 25+% overhead.
Then factor in bonuses for leadership when they finally get the thing to ship…
And 350 people sounds like way too few, considering the novel R&D. Maybe 2000 would be my guess.
What’s the ratio of testers:developers and how much do testers make? Not everyone on a this kind of a project is making even low end software developer salaries, and not every RSU vests which is a big part of why they are so popular.
I’ve heard people quote hundreds of people working on the Vision Pro which is already a lot of people for Apple. The company only recently broke 150k employees globally and a large fraction of that are working retail at their stores. Now split the remainder across iPhone, Mac, iPad, App Store, Apple TV, Air Pods, Watch, marketing, this car project, back end infrastructure etc and ~2,000 people on Vision Pro for 5+ years just doesn’t line up.
I agree that for the Vision Pro headcount 2000 is unlikely, but you also have to include all the other functions – chip design, marketing, all the people that interface with the manufacturing partners, the manufacturing partners themselves, the people who design the production lines, the people who design and program the machines on the production line, the people embedded in TSMC overseeing chip fab, the people TSMC will have embedded in Apple overseeing chip design... it goes on.
For an idea of the scope, a number of years ago it was reported that Apple had 40 business class seats from SFO to Shenzhen pre-booked every single day. That's how much it takes to interface with manufacturing. Now this isn't the iPhone, the scale is smaller, but this stuff is hard and takes a lot of people, it's practically why Tim Cook got the CEO job.
I completely agree manufacturing takes significant oversight, but only a tiny fraction of that manpower goes back 2+ years on a small scale production project like this.
Apple has a pipeline and they move experts between projects. The team making commercials is another late yet critical addition.
IME, having worked at big tech on moonshots, outsiders wildly underestimate how many people it takes to build a new platform. There is just so much work needed. I could be wrong on the AVP, Apple might make it work, but my prior is what it is.
Now discuss the millions spent on the physical R&D, corp acquisitions (Apple was for a while averaging 1-2 acquisitions/day), whatever licensing fees they need to pay out for initial access, this is easily a multibillion dollar bet.
This project has been rumoured to have hundreds of engineers for 5+ years, that's that revenue already (let alone profit), then the manufacturing setup, new chip development, etc.
Even if this product makes $2bn revenue, which could be unlikely just based on the rumoured manufacturing limitations and number they expect to manufacture this year, it probably wouldn't be justified once you figure out the profit margins. This is clearly all about the next product, or the one after. It's about the iPhone 4 launch, for this product, not the first, 3G, or 3GS practice runs.
Apple have a history of healthy margins, but huge production costs on their high end stuff, so while this is $3500, I wouldn't be surprised if it's still only 50% margin. That's great, but it's not the 70% one might expect from such a high price, and it will be because of things like maybe the body costs $200 rather than $50 because of some silly uncompromising design choices that don't make sense for high volume consumer hardware.