The first iPhone was pretty crappy. No apps. 2G only. Poor battery life. Limited global distribution - not even Canada could get it. But it captivated people who didn’t own it yet, and it proved out some essential ideas like multitouch. And when the iPhone 3G came out, improving on some of the original device’s shortcomings, it was wildly popular. The rest is history.
There is no doubt that AR will eventually get good enough that the devices are paper thin, weigh nothing, and have no external battery (of course). Everyone wants _that_ device, but you have to start somewhere. Apple can afford to be patient in this space and their considerable moat of intellectual property will allow them to carve out the high end of the AR market and then work down as they did with iPhone.
It would not surprise me if they are earning 90% of the gross margins in the AR device space within three years.
There is no doubt that AR will eventually get good enough that the devices are paper thin, weigh nothing, and have no external battery (of course). Everyone wants _that_ device, but you have to start somewhere. Apple can afford to be patient in this space and their considerable moat of intellectual property will allow them to carve out the high end of the AR market and then work down as they did with iPhone.
It would not surprise me if they are earning 90% of the gross margins in the AR device space within three years.