Master Class

iPhone market share in the US has not changed for nearly a decade. During this time, Apple has put on a master class for how to sell more things to the same people.

In just the past 4 years, the average iPhone user has added nearly $1,000 of Apple hardware products that are not iPhones. In addition, the company has gone from selling 1.5 subscription services per iPhone user to 1.9 services.

OK, but what comes next?

The Vision Pro

At $3,500, the Vision Pro seems like a ridiculous product. But 35% of iPhone owners in a representative survey said that they will likely buy one - with the average respondent willing to pay $978. If 35% of iPhone users pay $978 for the Vision Pro, then Vision Pro sales would dwarf the annual revenue of the entire company.

New Territory

The key to understanding Apple’s big investment in the Vision Pro is that it thrusts Apple into a dominant position in new markets and in markets where Apple’s current offerings are weak. The top 3 most likely use cases for the Vision Pro according to survey respondents are movies/TV, gaming, and fitness.

Apple is particularly weak in movies/TV as well as gaming hardware. The Vision Pro would give the company the opportunity to leapfrog the existing competition. It would also push Apple into markets where it is easy to sell more subscription services.