Why Apple’s Vision Pro Is Struggling to Attract App Developers

[00:00:00] [SPEAKER_01]: Robert Half Research indicates 9 out of 10 hiring managers are having difficulty hiring. Robert Half is here to help. Our recruiting professionals utilize our proprietary AI to connect businesses with highly skilled talent. At Robert Half, we know talent. Visit roberthalf.com today.

[00:00:23] [SPEAKER_03]: Welcome to Tech News Briefing. It's Friday, October 18th. I'm Zoe Thomas for The Wall Street Journal.

[00:00:31] [SPEAKER_03]: Researchers are working to grow heart valves, lungs, and more from human cells. We'll tell you about the tech one company has developed and how it could make a difference to patients.

[00:00:42] [SPEAKER_03]: And then, Apple's mixed reality headset, the Vision Pro, is struggling to attract major software makers to develop apps for the device. Our reporter Aaron Tilley will be here to explain why app makers aren't jumping into this new ecosystem.

[00:00:58] [SPEAKER_03]: What that means for device sales.

[00:01:04] [SPEAKER_03]: But first, lab-grown blood vessels could offer doctors a drastically different way to treat traumatic injuries and circulation problems.

[00:01:13] [SPEAKER_03]: This lab-grown tissue is more likely to be accepted by the body than synthetic grafts made of plastic,

[00:01:19] [SPEAKER_03]: and more accessible if a surgeon doesn't have time to harvest a blood vessel from a different part of the patient's body.

[00:01:25] [SPEAKER_03]: Here to tell us more is our reporter Liz Esley-White.

[00:01:29] [SPEAKER_03]: Liz, researchers have brought some body tissue to market, such as knee cartilage and skin grafts, but what's holding up the more complicated anatomy?

[00:01:38] [SPEAKER_02]: Liz Esley-White So there are all kinds of challenges to doing this.

[00:01:42] [SPEAKER_02]: It's very hard to even get the right scaffold going.

[00:01:47] [SPEAKER_02]: You need a polymer mesh that degrades over a period of time, which that in itself is a feat.

[00:01:53] [SPEAKER_02]: And then you need to find the right kind of cells that can regenerate and structure the living thing that you're recreating in the lab.

[00:02:01] [SPEAKER_02]: So there are all kinds of things that make this very difficult.

[00:02:05] [SPEAKER_02]: We've seen scientists grow lungs out of all the organs.

[00:02:10] [SPEAKER_02]: Those are kind of on the more simple-to-tissue-engineer scale.

[00:02:14] [SPEAKER_02]: But anything like a heart or a liver or things like that are going to be further off.

[00:02:19] [SPEAKER_02]: Those are far more complicated.

[00:02:21] [SPEAKER_03]: So let's talk about some of the efforts to develop this.

[00:02:24] [SPEAKER_03]: Tell us about Humocyte, which is one of the companies that's furthest along in this area.

[00:02:29] [SPEAKER_02]: What they've done is come up with a lab-grown blood vessel that can be used in the body for potentially a lot of different applications.

[00:02:36] [SPEAKER_02]: The first one they're asking for FDA approval for is for patients with trauma wounds.

[00:02:42] [SPEAKER_02]: So people have been in car crashes or explosive blasts, that kind of thing, and who need help saving their limbs urgently.

[00:02:49] [SPEAKER_02]: But it potentially could be helpful for people with a disorder that causes pain at the end of the limbs because your blood vessels start to constrict.

[00:02:57] [SPEAKER_03]: Can you describe how their tech works?

[00:03:00] [SPEAKER_02]: The big problem with tissue engineering traditionally is that the body will reject these constructed tissues because anything foreign to the body's immune system reacts to.

[00:03:10] [SPEAKER_02]: So what Humocyte does that's really unique is they grow the vessel in the lab using cells and it forms this tube of collagen and other proteins.

[00:03:21] [SPEAKER_02]: But then they wash all the living cells off of it.

[00:03:25] [SPEAKER_02]: And what remains is just a tube that looks and acts like a blood vessel and can conduct blood to where it needs to go, but it isn't going to get rejected by the body.

[00:03:34] [SPEAKER_02]: And then once it's implanted by the surgeons, the patient's own cells come in and live along it so that it really looks and acts a lot like a regular blood vessel.

[00:03:45] [SPEAKER_03]: Are there risks to lab-grown blood vessels?

[00:03:47] [SPEAKER_02]: The FDA is looking at the application now, and that's something they're thinking about.

[00:03:52] [SPEAKER_02]: But from what Humocyte has said about its data, a lot of the side effects are things that we would see even with synthetic grafts, something like a fever.

[00:04:01] [SPEAKER_02]: So it's not something that they've seen a giant safety signal about.

[00:04:06] [SPEAKER_03]: All right, that was our reporter, Liz Esley-White.

[00:04:08] [SPEAKER_03]: Coming up, the Vision Pro is Apple's biggest new product in a decade.

[00:04:13] [SPEAKER_03]: But the device is struggling to attract killer apps for buyers.

[00:04:18] [SPEAKER_03]: We'll tell you why after the break.

[00:04:27] [SPEAKER_01]: Robert Half Research indicates nine out of ten hiring managers are having difficulty hiring.

[00:04:32] [SPEAKER_01]: Robert Half is here to help.

[00:04:34] [SPEAKER_01]: Our recruiting professionals utilize our proprietary AI to connect businesses with highly skilled talent.

[00:04:41] [SPEAKER_01]: At Robert Half, we know talent.

[00:04:43] [SPEAKER_01]: Visit roberthalf.com today.

[00:04:51] [SPEAKER_03]: Apple's Vision Pro is the company's biggest new product in a decade.

[00:04:55] [SPEAKER_03]: The mixed reality headset, which resembles scuba goggles, was pitched as a new way to immerse yourself in movies, calls, exercise, and even work.

[00:05:05] [SPEAKER_03]: The device comes with a heavy price tag.

[00:05:07] [SPEAKER_03]: The base Vision Pro is $3,499.

[00:05:13] [SPEAKER_03]: And analysts say sales have been lower than expected.

[00:05:16] [SPEAKER_03]: Apple cut its first-year Vision Pro shipments to between 400,000 and 450,000 units, down from between 700,000 and 800,000 units.

[00:05:26] [SPEAKER_03]: That's according to supply chain analyst Min-Chi Kuo.

[00:05:29] [SPEAKER_03]: For those who do purchase a Vision Pro, there aren't that many third-party apps relative to other devices.

[00:05:35] [SPEAKER_03]: Software developers just aren't rushing to launch new ones.

[00:05:39] [SPEAKER_03]: Here to tell us more is our reporter Aaron Tilley.

[00:05:42] [SPEAKER_03]: So Aaron, how important are third-party app developers to the success of Vision Pro?

[00:05:47] [SPEAKER_00]: They are an essential part of the success of the Vision Pro.

[00:05:51] [SPEAKER_00]: Apple has some first-party apps for this, but the life of this product really is determined by third-party support.

[00:06:00] [SPEAKER_00]: There needs to be a lot for users to do to justify the cost and to use it.

[00:06:06] [SPEAKER_03]: Do we know how many apps have been released for the Vision Pro so far?

[00:06:10] [SPEAKER_00]: Apple said in August that they had 2,500 apps.

[00:06:15] [SPEAKER_00]: I used some third-party firm in order to get their read on the situation, and they read a much lower number, around 1,700 apps.

[00:06:25] [SPEAKER_00]: And the vast majority of them sort of not apps meant design for the Vision Pro.

[00:06:32] [SPEAKER_00]: Instead, iOS, so iPhone or iPad apps that have some additional Vision Pro functionality.

[00:06:38] [SPEAKER_00]: And Apple also says a lot of the iPhone and iPad apps are compatible with the Vision Pro.

[00:06:45] [SPEAKER_03]: And how does the number of apps released for the Vision Pro compare to other Apple products?

[00:06:50] [SPEAKER_00]: If you look at the history of previous products, like the iPhone and Apple Watch, when the iPhone was first released, it didn't have an app store.

[00:06:59] [SPEAKER_00]: But they did release one soon after, about a year after the launch of the iPhone app store.

[00:07:06] [SPEAKER_00]: Apple said it had 50,000 apps.

[00:07:09] [SPEAKER_00]: And with the Apple Watch, even though the app store wasn't essential for the product, Apple said it had 10,000 apps five months after the release of the watch.

[00:07:19] [SPEAKER_00]: So quite significant more growth with these other devices.

[00:07:24] [SPEAKER_00]: But the important caveat here is that just developing for the Vision Pro is a lot more technically difficult than these other devices in some ways.

[00:07:34] [SPEAKER_00]: Creating 3D content requires a lot more effort and attention and just more assets and requires a lot more work than a simple iPhone app or Apple Watch app.

[00:07:46] [SPEAKER_03]: Apart from the technical difficulties, are there any other reasons why software developers just haven't embraced the Vision Pro?

[00:07:53] [SPEAKER_00]: The main reason is the user base.

[00:07:56] [SPEAKER_00]: The small user base that exists for the Vision Pro.

[00:08:00] [SPEAKER_00]: Just the return on investment for developers is going to be extremely low because the user base is so tiny and the device is so expensive.

[00:08:09] [SPEAKER_00]: There's really no potential for a mass market device.

[00:08:12] [SPEAKER_00]: So a lot of developers, people who have experience working on virtual reality or augmented reality sort of apps and devices, they're waiting for a cheaper device from Apple that will make it a more mass market device.

[00:08:30] [SPEAKER_03]: And what have customers you've spoken to said about the Vision Pro?

[00:08:33] [SPEAKER_00]: A lot of them were really impressed with the technical capabilities of the device, like the immersion, the feeling that you're in a space that you're not actually in were really cool.

[00:08:46] [SPEAKER_00]: But it just ended up sitting on the shelf.

[00:08:49] [SPEAKER_00]: There just wasn't enough to do with it.

[00:08:52] [SPEAKER_00]: It didn't really integrate into the work as Apple kind of was trying to push it as a sort of a workplace device.

[00:08:59] [SPEAKER_00]: And just entertainment and games, they're just not enough.

[00:09:03] [SPEAKER_00]: Or it's just too uncomfortable to use for long periods of time.

[00:09:06] [SPEAKER_00]: So it's not really keeping them in there.

[00:09:08] [SPEAKER_00]: And given the cost of the device, like it wasn't making sense just to hold on to the device.

[00:09:14] [SPEAKER_00]: So they just sold it or there's a sizable amount of users who bought it and returned it within the two week window where Apple will fully refund the purchase.

[00:09:24] [SPEAKER_03]: How are rivals in this space doing?

[00:09:26] [SPEAKER_00]: Well, Meta is the biggest player here.

[00:09:30] [SPEAKER_00]: They have something like over 70 percent of the overall market.

[00:09:35] [SPEAKER_00]: And they've been spending a lot of money on this.

[00:09:38] [SPEAKER_00]: And it's still an extraordinarily unprofitable kind of venture for them.

[00:09:44] [SPEAKER_00]: But they're committed and they're investing in companies building apps.

[00:09:48] [SPEAKER_00]: And in some cases, even buying the companies.

[00:09:52] [SPEAKER_00]: They acquired a number of companies building popular apps for the Quest product.

[00:09:57] [SPEAKER_00]: That was a nice early injection of capital into this early ecosystem that was helpful for the ecosystem.

[00:10:03] [SPEAKER_00]: And that's also something Apple just doesn't do.

[00:10:07] [SPEAKER_00]: They don't really invest in that way to third-party partners and developers.

[00:10:13] [SPEAKER_03]: What are Apple's plans for the mixed reality space?

[00:10:16] [SPEAKER_00]: We and others have reported that it's looking like next year they are aiming for a cheaper second-generation vision device.

[00:10:25] [SPEAKER_00]: The bigger ambition here, like everyone in this market, is just a regular-looking pair of glasses that can do full augmented reality and really immersive kind of augmented reality.

[00:10:37] [SPEAKER_00]: But we're still many, many years likely away from that.

[00:10:41] [SPEAKER_03]: All right, that was our reporter, Aaron Tilley.

[00:10:43] [SPEAKER_03]: And that's it for Tech News Briefing.

[00:10:46] [SPEAKER_03]: Today's show was produced by Julie Chang.

[00:10:48] [SPEAKER_03]: I'm your host, Zoe Thomas.

[00:10:50] [SPEAKER_03]: Jessica Fenton and Michael LaValle wrote our theme music.

[00:10:53] [SPEAKER_03]: Our supervising producer is Catherine Millsop.

[00:10:56] [SPEAKER_03]: Our development producer is Aisha Al-Muslim.

[00:10:58] [SPEAKER_03]: Scott Salloway and Chris Zinsley are the deputy editors.

[00:11:02] [SPEAKER_03]: And Falana Patterson is the Wall Street Journal's head of news audio.

[00:11:05] [SPEAKER_03]: We'll be back this afternoon with TNB Tech Minute.

[00:11:08] [SPEAKER_03]: Thanks for listening.