4 ms·

Revenue. They aren't free to build and it probably cost a great deal to develop. Is it a success if you sell $700m USD but are still $4 billion* in the hole? *

Revenue. They aren't free to build and it probably cost a great deal to develop. Is it a success if you sell $700m USD but are still $4 billion* in the hole? * Made up number.

steve_adams_86 3y ago
Apparently the margin on them is ~45%, so if they do okay I can see that hole being dug out within a few years. Others have mentioned as well that it seems like this platform might not strictly be a bet on VR. It might also be a proving ground for vision systems and realtime processing capabilities. If that's the case, the information and development advances they can make with this experience might allow them to execute on bigger plans. That could be a car for example. I'm not sure what I think of that, but I don't doubt the product may have been partially justified because it allows shared progress with bigger picture plans. That would make going in the hole okay in a sense, because you'd have to go in the hole either way. At least this way you get a bit back and prove out technologies in the wild.
- seanmcdirmid 3y ago
  45% before R&D costs, which have to be amortized somehow.
  - flgb 3y ago
    Somehow? Wild guess, but maybe they will be selling the product of that R&D for more than 10 days.
    - seanmcdirmid 3y ago
      I doubt it’s less than 10 days. And there are ongoing software development costs. Apple still can’t print money without lots of investment.
  - snakeyjake 3y ago
    I don't know if Apple accounts for R&D the same way other normal companies, ones that don't have $60 billion in cash on hand, do. The company I work for expects each individual R&D effort to pay off and track that effort under a myriad of overhead/IRAD/misc charge numbers. Companies like Apple, Alphabet, and Microsoft just shovel money into that fire.
sidcool 3y ago
I think it's a game of scale. Even if they are in the hole, customer acquisition and services revenue makes it worthwhile. It's a long term game.
mytailorisrich 3y ago
Apple is positioned in high-end, high-margin products. I obviously don't know what their costs and financial and sales plans are wrt. the Vision Pro but I think it is fair to assume that the pricing is set for a high margin within that plan. Now, considering the high price and seemingly niche target, personally I am impressed that they already sold 200k units.

Revenue. They aren't free to build and it probably cost a great deal to develop. Is it a success if you sell $700m USD but are still $4 billion* in the hole? * Made up number.

steve_adams_86 3y ago

Apparently the margin on them is ~45%, so if they do okay I can see that hole being dug out within a few years. Others have mentioned as well that it seems like this platform might not strictly be a bet on VR. It might also be a proving ground for vision systems and realtime processing capabilities. If that's the case, the information and development advances they can make with this experience might allow them to execute on bigger plans. That could be a car for example. I'm not sure what I think of that, but I don't doubt the product may have been partially justified because it allows shared progress with bigger picture plans. That would make going in the hole okay in a sense, because you'd have to go in the hole either way. At least this way you get a bit back and prove out technologies in the wild.

seanmcdirmid 3y ago
45% before R&D costs, which have to be amortized somehow.
- flgb 3y ago
  Somehow? Wild guess, but maybe they will be selling the product of that R&D for more than 10 days.
  - seanmcdirmid 3y ago
    I doubt it’s less than 10 days. And there are ongoing software development costs. Apple still can’t print money without lots of investment.
- snakeyjake 3y ago
  I don't know if Apple accounts for R&D the same way other normal companies, ones that don't have $60 billion in cash on hand, do. The company I work for expects each individual R&D effort to pay off and track that effort under a myriad of overhead/IRAD/misc charge numbers. Companies like Apple, Alphabet, and Microsoft just shovel money into that fire.

sidcool 3y ago

I think it's a game of scale. Even if they are in the hole, customer acquisition and services revenue makes it worthwhile. It's a long term game.

mytailorisrich 3y ago

Apple is positioned in high-end, high-margin products. I obviously don't know what their costs and financial and sales plans are wrt. the Vision Pro but I think it is fair to assume that the pricing is set for a high margin within that plan. Now, considering the high price and seemingly niche target, personally I am impressed that they already sold 200k units.