Apple: The tech giant is still reliant on the iPhone, now it's taking a chance on a new product

Apple is reportedly set to unveil its new mixed-reality headset at its developer conference on June 5th. According to rumors, the product has gone from being imagined as a pair of unobtrusive eyeglasses to a relatively bulky offering that requires an external battery pack and is set to cost customers around $3,000.

Legacy defining?

‍This new product is being hailed as a potentially defining moment for CEO Tim Cook, who - on most measures - has presided over Apple’s most financially successful era, despite what some might call only relatively marginal improvements on the company’s actual product suite.

Indeed, the iPhone accounted for nearly 70% of Apple’s total products revenue last quarter, totalling more than $51 billion in sales. It also drives much of the success of Apple’s fast-growing services division, which includes the AppStore, AppleCloud, AppleMusic, ApplePay, AppleTV and more. That division is extremely profitable for Apple (70% gross margin), but it’s hard to imagine it being anywhere near as successful without the millions of iPhones around the world to support it.

‍Nerd helmet

‍Apple has a track record of making sleek products and turning them into gargantuan businesses, AirPods being one example, but venturing into the realm of tech-that-goes-over-your-face is a daring move as it’s a category that’s littered with expensive failures (Google Glasses?). The Wall Street Journal put it less delicately, wondering whether Apple can build a mainstream product that doesn’t end up as just a "nerd helmet". Interestingly, Apple has already scaled back its expectations of selling 3 million units in the first year to a more conservative 900,000.