Apple’s Expansion Plan: Glasses, Home Devices, Mixed-Reality Headsets, AirPods

Apple may never find another product with as much revenue potential as the iPhone, but it can still thrive with several new Apple Watch- or iPad-level businesses. Also: The company launches an internal project to evaluate the smart glasses market and names a new vice president of design. Plus, a look at the latest Vision Pro features — and its helpful new head strap.

Last week in Power On: Apple finally finds its game console with a smaller Mac mini and the new M4 chip line.

For years, Apple Inc. watchers, customers and investors have been fixated on the same question: What is the company’s next blockbuster product?

They’ve been waiting for Apple to deliver something with the same revenue potential as the iPhone — a gadget that can become its new growth engine.

That’s quite a challenge. There are more than a billion iPhones in use globally, and the device is at the center of the company’s product ecosystem. Consumers also haven’t indicated that they want some bold new alternative to the smartphone, a powerful computing platform that fits in their pocket.

The iPhone generates more than $200 billion for Apple annually — more than half its total revenue — while also helping fuel another $100 billion in services and more from accessory sales. The company’s App Store, Apple Watch, music service, TV+ streaming platform and AirPods are all popular because of a smartphone that first hit the market almost two decades ago.

Over the past 15 years, Apple has tried to augment the iPhone with new product categories. The iPad brings in more than $25 billion annually, and the division that includes wearables and home products now generates about $40 billion a year.

But Apple’s forays into entirely new territory haven’t always gone smoothly. A decadelong effort to develop a self-driving car was scrapped earlier this year. And the Vision Pro — the company’s first mixed-reality headset — has gotten off to a slow start. All the while, the iPhone keeps humming along.

It’s time to face facts. There may never be another Apple product on the level of the iPhone. It’s hard to imagine something materializing that could generate half of the company’s revenue. For all intents and purposes, Apple is iPhone Inc. and everything else at the company is an iPhone accessory. (Yes, even the Mac. Why are kids today buying Macs? Because of the iPhone.)

Apple still needs to find new sources of growth, of course. The iPhone isn’t going anywhere, but it’s also not fueling the sales gains that it used to. So, what’s the solution? To grow, the company can’t just wait for one big new opportunity — it needs several new device categories on the level of an iPad, Mac or Apple Watch.

That’s easier said than done. During development of the Vision Pro, executives aspired for the device to eventually become an Apple Watch-sized hit — something that now seems unlikely. But perhaps a broader line of Vision wearable products (including things like smart glasses, augmented reality spectacles and iPhone-connected head-worn displays) could become a $25 billion business.

AirPods, first launched in 2016, present another opportunity. Right now, the earbuds bring in an estimated $10 billion to $15 billion each year, but more ambitious versions that integrate health features and other technology could make them a bigger product category. Sensors and cameras also could help the AirPods understand their surrounding environment and supply useful information. Already, Apple has expanded the AirPods lineups to encompass four distinct models ranging up to $550.

Another promising category is the smart home, an area where Apple could finally make major inroads. The company is planning two new devices: a smart display (due in the first half of 2025) and a higher-end home hub with a robotic limb (planned for a couple of years from now). With the addition of new HomePods and TV set-top boxes, Apple could become more of a force in the home market.

There are other areas, too. Apple has skunk-works teams exploring mobile robots — even humanoid models — and how they could help with household tasks a decade from now. Though this early work may never lead to a product, it reflects Apple’s continual focus on the future. The company also is pondering how it could turn its health features into a recurring subscription and has evaluated a push into home energy products.

In the nearer term, Apple will be focused on gradual improvements to its existing products. That means making Macs with faster chips, thinner designs and touch screens. Its iPads will become more versatile, with larger displays and foldable models. Apple Watches will get blood pressure and glucose monitoring. And the company will try to make its iPhones even more indispensable, with new designs, cameras and AI features.

Those enhancements will keep the business stable for years to come. But if Apple wants to truly prosper, it will need to convert more of its innovation into practical new products. They just don’t have to be once-in-a-generation hits.

Apple signs up employees to help evaluate the current smart glasses market. When Apple is looking to expand into a new area, it often holds on-campus focus groups to understand consumers’ feelings about the current market. It held studies while it was developing the Vision Pro, AirPods and HomePod — and it’s now doing it again with smart glasses.

At the end of last month, it started conducting such research on this market, which includes models from Snap Inc. and Meta Platforms Inc. These smart glasses aren’t augmented reality goggles, but they do let consumers shoot video, make phone calls and listen to music. It’s a category where Apple is suddenly playing catch-up, despite all the work it put into the bulkier and pricier Vision Pro.

The company typically limits these focus groups to employees to help keep its plans secret. With smart glasses, the company could approach the category from a number of directions. That includes essentially creating a version of its AirPods in glasses form. It also could push to finally make true AR glasses — taking the Vision Pro experience and squeezing it into a pair of spectacles that people could wear all day.

But we’re probably at least five years away from an AR experience that would meet Apple’s quality requirements. Meta and Snap have prototypes of such a product, and they too are still rough. I’ve tried them both, and they’re not as far along as some reviewers would lead you to believe. In other words, you’ll need to wait awhile before there’s something worth buying.

The Vision Pro’s first killer app has arrived. Apple markets the Vision Pro as a standalone device (complete with powerful chips and a $3,500 price tag), but one of its best features is the ability to serve as a Mac external monitor. In June, Apple announced plans to make that feature even better, bringing a virtual curved monitor mode to the default size, as well as offering new wide and ultrawide monitor options.

The company released a beta version of these capabilities this past week, and they are a game changer. In my view, the features represent the first true killer app for the Vision Pro. They provide a high-resolution Mac external monitor with what feels like an infinite amount of screen real estate. Before these new modes arrived, I was only using my Vision Pro occasionally to watch movies. Now, I’m back to at least trying to use it every workday.

Apple should be marketing the new ultrawide display modes in a major way. It’s that good. And if you’ve read my prior coverage of the Vision Pro, you know I haven’t always been easy on the product. The wide and ultrawide options will be available for all Vision Pro users as part of visionOS 2.2, which I expect to arrive in early December.

A hands-on test of the new Vision Pro strap from Apple (I mean Belkin). When Apple released its first promotional video for the Vision Pro back in June 2023, a quick scene showed a thick strap on the back of a user’s head as well as a thinner piece of material that went over the top. That combination appeared to be a great solution to the device’s weight problem, but Apple never released it. The Vision Pro shipped with two other options: the back strap alone and a dual band (two thin strips of material that go across the back and top of head).

But now Apple’s favorite accessory maker, Belkin, has released a version of the original top strap. You can buy this for $50 from Apple’s website and use it with your existing back strap, which Apple calls the Solo Knit Band.

The combination looks just like the prototype solution from 2023, and you can bet that Apple asked Belkin to make it. So why wasn’t this released by Apple at the start? It could be the company didn’t want its name on an accessory that confirmed a painful truth: The Vision Pro’s default band is essentially unusable. So it turned to Belkin, which is owned by Foxconn Technology Co., Apple’s manufacturing partner.

I’ve been testing the new strap for the past few days, and I find it to be a significant improvement over both options included in the Vision Pro packaging. I already can use the Vision Pro for longer periods of time than before: It’s comfortable for a few hours, rather than about 30 minutes. Apple should absolutely start including this type of accessory in the box and ditch the dual band.

As I mentioned on X last week, Apple also is changing the way it displays the Vision Pro in stores. Right now, many locations have two Vision Pro-related tables. One has display models, as well as iPads offering more information on the device. The other is used for the actual Vision Pro demos. Now, Apple is combining those tables into one. This change was driven by two factors: Demand for the Vision Pro has dwindled since its launch nine months ago, and Apple wants to make room for new Macs that went on sale Friday.

Apple names a new vice president of industrial design, more than a year after the last one left. When legendary Apple design chief Jony Ive departed in 2019, he handed the reins to a pair of deputies: Evans Hankey became vice president of industrial design, and Alan Dye continued his role overseeing human interface work. But then Hankey left Apple in the beginning of 2023 and recently joined Ive at his design firm, LoveFrom.

Apple struggled to find a suitable replacement for Hankey — in part because of a talent drain in recent years. The companylost nearly every designer who worked under Ive, either to LoveFrom or retirement. Apple also worried that promoting one designer over others could bring further turmoil. So, in an unusual arrangement, Apple’s designers reported directly to Chief Operating Officer Jeff Williams.

Things began changing again earlier this year when Apple named team veteran Molly Anderson as the new head of industrial design, with staff now reporting to her. At the time, I noted that Anderson was a senior director, leaving her below Dye’s rank. But I’m now told that Anderson was promoted to the VP level a few weeks ago. That makes her Apple’s first VP of industrial design since Hankey left.

Even so, uncertainty remains. People on the team are bracing for more departures, and there are concerns about the group’s reduced ownership of the product development process. Engineering and operations employees now have more clout in determining product direction than they did during the Ive days.

(Answers to the below are shown in the subscriber-only version of this newsletter.)

Q: Will the next Vision Pro look any different?Q: How’s iOS 18.2 looking so far?Q: Do I need to get my iPhone 14 Plus camera replaced?

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