Apple’s (AAPL) highly anticipated Vision Pro headset has finally taken its place on store shelves. This comes a day after the tech giant announced first-quarter results that disappointed investors.
DA Davidson General Manager Gil Luria says Vision Pro “changes perceptions of Apple’s ability to innovate”; This is a problem that arises because the company has not launched a new product category in several years. Luria thinks the device will “change the way we compute” and that “Apple will take us into the future.” Luria also explains that future devices will look more like glasses than the large headphones consumers deal with today.
One of the sore points for investors in the earnings report was Apple’s China sales. At this point, Luria described the outlook as “dark,” saying there was “very little visibility” into China sales. Luria argues that there are many factors affecting Apple’s business in China, including the country’s weakening economy, a competitive mobile phone market and a government that can be protectionist.
Watch the video above to hear what Luria had to say about advances in the iPhone and how Apple could use generative AI.
For more expert insights and the latest market moves, watch this entire episode of Yahoo Finance Live by clicking here.
Editor’s note: This article was written by Stephanie Mikulich.
video transcript
JULIE HMAN: Apple’s Vision Pro hits shelves today, with CEO Tim Cook unveiling it at the company’s flagship store on Fifth Avenue in New York City. With a price tag of around $3,500, it’s Apple’s first major new category since 2015. This comes on the heels of last night’s gains, of course, but the stock has been on the decline and is actually rebounding due to weakness in China. It’s well away from the day’s lows. Let’s bring in Prosecutor Davidson general manager Gil Luria to talk more about this topic. Hello Gil. It’s nice to see you.
GIL LURIA: It’s nice to see you.
JULIE HMAN: Let’s start with Vision Pro and then we can extend this to earnings. It’s a great product for $3,500, most reviewers say. What does this do? What does Vision Pro do for Apple?
GIL LURIA: The first thing it does is change perceptions about Apple’s ability to innovate. We haven’t had a new product category in a while and this is a huge new innovation. It will change the way we use computers. Spatial computing is very different from what we do now, how we interact with apps, how we see what we see, where the battery is, where the screen is. So Apple is taking us to the future. For now, it’s at a price point that most people won’t be able to afford, but it will at least give some people some perspective on where things are going, especially so developers can build new apps and tools better suited to spatial computing.
JARED BILKRE: Gil, maybe I’m reading this personally, but I see photos of Tim Cook and the new headset on. He doesn’t look very happy. And, you know, Jony Ive has never actually been interested in AR and VR. I’m not sure he would approve of this. He actually left Apple before this was actually developed. Just wondering if there’s something there. If you think people inside Apple are really keen on this.
GIL LURIA: Again, the point is that this is not what will happen to us in five years. No one is going to have this heavy, bulky device that has an external battery, weighs half a kilo, and has multiple straps that need to be adjusted. It won’t look like this in five years. In five years it will be just glasses. We will have glasses that will allow us to see only our surroundings, multiple screens and multiple applications at the same time, and we will use this device in this way. It won’t look like today’s big ski goggles.
JULIE HMAN: Gil, even as this spatial computing innovation was happening, can we assume that the iPhone was also some kind of innovation, right? It looks like this: Will we see more leaps of innovation in smartphones, or how far will it go with existing technologies?
GIL LURIA: I think there are a few more opportunities for innovation. So phones can still be lighter, thinner, and perhaps transparent; Some other mobile phone manufacturers also make them foldable. But what’s really worth paying attention to is that Apple will likely introduce new generative AI capabilities at the June WWDC event, and they may tie that into the next iPhone cycle.
So they can make the iPhone 16 the only phone that can run such applications. And if that’s the case, we’ll have a major upgrade cycle. The last time we had a major upgrade cycle was the iPhone 12, which was the first phone that could connect to a 5G network. If they make a phone that’s the first and only one that can run things consumers want, like productive capabilities, that could trigger another upgrade cycle.
JARED BILKRE: I have to ask you about China because this has been a sore point not only for Apple but also for the entire exporting world. What do you think is the future of Apple, especially in China?
GIL LURIA: We have little visibility and the outlook is dark because there are many factors contributing to the performance in China. First of all, the Chinese consumer, the economy there is weak, the market is weak, the real estate markets are weak, the sources of wealth for the high-end Chinese consumer are running out. Then you have the most competitive mobile phone market with a local incumbent that is very price competitive and also has some rich features that they are introducing.
And finally, the government decides how protectionist it wants to be. There are reports from China that state-sponsored institutions are not allowing people working in such institutions to own iPhones. Possibly in retaliation for our measures to limit AI chips. Possibly as part of a larger political statement. Either way, these are things that will be very difficult for Apple to predict. It will continue to be in this market. In fact, with all this, they had the highest share in China last year, but it will be very difficult to predict what will happen from now on.
JULIE HMAN: Gil, you mentioned artificial intelligence in passing, right? And Tim Cook has teased something is coming from the company on the AI front. I mean, Apple tends to leak a bit. Maybe we’ll get a little more insight into what could happen. But I mean, do you have any theories? And I guess it’s a three-part question. Do you have any theories? When do you think we’ll know more? So what will this do to Apple?
GIL LURIA: So it’s usually not Apple that leaks, it’s theirs, they have such an extensive supply chain that the person who leaks it is usually an Apple salesman somewhere. Apple is actually trying really hard not to highlight its product because there is so much speculation. And that’s what they’re doing here. All we know for now is that artificial intelligence already has uses. When we use our text for, and they auto-complete a text, that’s the use of artificial intelligence.
You can expect this to expand from there. But based on the resources they have, the attention they’re focused on, and how important this is to their future, I expect some things we haven’t thought of yet to emerge later this year and make the experience better. , to help us summarize experiences, pre-populate messages, and possibly further assist with translation regarding language, programming, or application maneuvers. There are many things they can do. And again, there are so many resources and so many smart people working in Cupertino that I would expect them to do something that would impact us.
JULIE HMAN: Gil, thank you very much. Appreciate it.
GIL LURIA: Thank you.