Why Apple may be winning again

As we lean into WWDC, three strategically brilliant Apple moves have been exposed in the last couple of weeks, two of which will have immense consequences in the coming year, while one sets the scene for essential future growth.

In each case, Apple’s leadership has found counter-intuitive gambits that actually secure the company’s future. Let’s start with Vision Pro.

It came from the future

News this week is that incoming CEO John Ternus has made some tough decisions around Apple’s approach to spatial computing, terminating development of Vision Pro (even as leaked images of a black model emerge) while focusing R&D on two smart glasses projects to compete with Meta. 

The intention is to introduce XR and AR glasses priced at around $300 to $500 each. While not as richly-featured as the Vision Pro, they will be within the reach of more people and draw deeply on the huge R&D effort that went into the original Apple AR visors. Apple hopes a focus on trust and privacy will be enough to push Meta aside, helping Cupertino dominate this part of the category. If that plan succeeds, don’t be at all surprised to see plans for Vision Pro 2 return to the table, though that’s not the focus now.

Apple frequently described the Vision Pro as a product “pulled from the future,” a device for enterprise users and early adopters. For many such users, the existing product will be useful in their work for time to come. 

What’s strategically solid about this is that Apple has now defined a good future for spatial computing and is bringing components of that future to the mass market on the basis of a provable technology you can already try for yourself in any Apple Store. This is a long game, and while it will take time to play out, it’s a game the company has proved it can join.

Privacy as a standard

Apple has apparently chosen to use Nvidia and Google technologies to support at least some of the Apple Intelligence/Siri improvements to be announced at WWDC next week. This seems to fly against the company’s general approach to privacy on its platforms, with the silicon, operating system and — thanks to Private Cloud Compute — the cloud all in its control.

How, you might ask, can Apple ensure privacy when using third-party infrastructure to manage some AI transactions? How can it do so without damaging its trusted brand?

One direction that makes sense is to consider that Apple and its partners have reached consensus on what privacy should be and how it should be delivered. That’s a very important consensus, as it suggests Apple is building an approach that makes privacy an attestable standard.

The company has been pushing governments for years to agree to such standards, but all it seems to have had in return are continued government attempts to erode personal privacy. That’s particularly evident in the UK government’s egregious move to undermine encryption to the detriment of all. (The UK isn’t really alone in preferring surveillance above liberty.)

Android developer Google has had the same experience, and while its approach to privacy differs from Apple, both companies understand the need for encryption. As such, any form of consensus on some form of privacy standards is welcome — and while I’d very much prefer an enforceable, verifiable approach, some industry agreement has to be better than nothing at all. 

While I don’t believe Apple’s approach to privacy in the new breed Siri/Apple Intelligence will be introduced in this way at WWDC, it will be interesting to see what does emerge from the new tech triptych (Apple, Google, Nvidia) in the coming months. Certainly, all three have a great interest in guarding encryption against Quantum attacks for which hidden backdoors would be easy pickings.

Winning the PC War

Apple has won the PC war.

MacBook Neo is selling in such vast quantities; IDC had to boost its laptop market growth forecast even while predicting a huge Windows PC sales decline. 

Competitors are churning out products they’re marketing as MacBook Neo competitors, even though many reviewers note higher prices and lower build quality.

Rapid component price increases, particularly around memory, are prompting some Neo competitors to come with just 8GB of RAM.  

That last point needs explanation: Apple’s entry-level MacBook Neo also has just 8GB RAM, but it also has custom-designed Apple processors and an operating system optimized to run on the hardware. That means those Macs use memory far more efficiently than their competitors. 

So, you can pick up some mass market Windows laptops for $800 that hold just 8GB memory, or spend $699 for a MacBook Neo with double amount and that can also run Windows in VM extremely well. 

Component prices are not going to shrink back for a while, any more than further magical thinking is going to end the war in Iran. At this point in the cycle, Apple has the PC market advantage. Millions are purchasing its entry-level Mac and the vast majority of those new users will love the platform, as new users usually do. That’s going to lead to a spike in Apple services sign-ups, and prompt solid future upgrade and accessory sales cycles.

Apple accomplished this by selling a low-cost Mac at a time when competitors face existential problems maintaining their grip on the mid-range market. The longer Apple holds prices on the device, the greater the advantage it builds, while applying huge pressure on PC competitors.

Summing up the goods

With the Mac hitting its iPod moment as it achieves mass market sales, Apple finally seeing something like progress in its attempt to secure privacy in a digital age, and a strong position from which to grow in the wearables market, the company has played a fine hand. 

That’s even before it introduces us to its improved Apple Intelligence, and an era of AI access in which many everyday tasks take place token free directly on the device. Indeed, when it comes to AI, if it gets things right at WWDC, Apple appears to be making money, while AI competitors are bleeding financial oxygen as their inflated bubble heads to its inevitable demise. What about the enterprise? Take a look at this chart.

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