The News: YouTube, Spotify, and Netflix are reportedly not planning to release native apps for Apple’s new Vision Pro XR headset. Worse yet, their iPad apps, which should easily be made to work with the headset, reportedly will not be available on the platform either. Users will instead be asked to use Apple’s Safari web browser to access them, essentially missing the point of what the Vision Pro experience can offer. Read more about it here.
3 Key Reasons App Developers May Be Ignoring Apple Vision Pro…For Now
Analyst Take: Media consensus around the news that Netflix and Spotify were not currently planning to release apps for the Vision Pro erroneously characterized the decision as a snub. That is just lazy analysis. The world of business is not driven by petty high-school-drama-inspired turf wars and disses, even if pretending that it is might drive clicks. Bottom line: Netflix and Spotify, like Apple, are successful, serious, thoughtful businesses, and since “snubbing” Apple for the sake of snubbing Apple makes zero business sense for either Netflix or Spotify, let’s explore more credible reasons for their decision.
The Numbers Are Not There Yet
Unlike Disney, which partnered with Apple for the launch of the Vision pro, it is likely that neither Netflix nor Spotify felt that the expense, risk, and operational headaches of building, launching, and managing apps specifically for the Vision Pro were worthwhile, especially this early in the product’s lifecycle. It is too soon to tell how well Apple’s XR product will do in the next 12 months, but at roughly $4,000, it is probably safe to assume that its first year on the market will not deliver massive unit sales—compared with, say, a $800 handset or a $500 TV. The roughly $4,000 price point, particularly for a first generation product in a category still struggling to find mainstream adoption, is not exactly an on-ramp for mass adoption anytime soon.
In short, absent scale, the Vision Pro is basically a niche product, Apple or not, and building apps for brand new niche products does not necessarily make financial sense for anyone (let alone companies with already well established install bases on devices that their customers are already comfortable using). Disney obviously has a different take on this, and that is fine, but not every company is going to look at the XR opportunity—or even at the right time to enter that space—through the same lens.
Does this mean that Netflix and Spotify will never release apps for Apple XR products (or Android XR products, for that matter)? No. My read on their decision is that it is just too soon for the product and the category. If adoption of the Vision Pro scales, and a business case for dedicated apps can legitimately be made, I suspect that Netflix, Spotify, and others will invest in developing solutions for the platform.
Litigation and Protecting Revenue Streams
Given the state of App Store (and Play Store) litigation, companies such as Netflix and Spotify may not be in any hurry to lock themselves into an app marketplace that, on the one hand, extracts revenue from their businesses, and on the other, might further complicate pending and future litigation involving the Apple marketplace. In other words, the decision to not release apps for Apple’s VisionOS could be a way for some companies to de-risk their business model until either legal precedent or new legislation creates the kind of transactional and royalties environment that protects both their app revenue and their ability to sell products and services to their users without having to pass through an app store.
Leverage Against the Apple Tax
Apps are the lifeblood of new platform adoption. The more apps, games, and features, the more utility and value a platform can bring to the market, and the faster adoption is likely to scale. (No one wants to invest hundreds—if not thousands—of dollars into a new device with few to no apps.) This applies to pretty much any tech category, from phones and gaming consoles to XR headsets. This means that the richer VisionOS’s app ecosystem is, the more consumers it is likely to attract. Conversely, the weaker it looks, the fewer consumers it is likely to attract. It is not inconceivable that platform developers with enormous footprints—such as Netflix and Spotify, for example—could be using their market power to improve their negotiating position with Apple and secure more advantageous terms for their App Store agreements relating to VisionOS app revenue.
Conclusion
The Vision Pro is a brand new product in a slow-growth category, and one that happens to carry an unusually high price point, meaning that the market for it will initially be extremely niche. No app ecosystem decisions being telegraphed to the market this early should be taken as particularly significant, let alone permanent. 2024 will provide Apple with the opportunity to make the business case for its XR roadmap—and perhaps for an App Store revenue model that app developers with a bone to pick with the so-called “Apple tax” can be more amenable to.
Disclosure: The Futurum Group is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.
Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of The Futurum Group as a whole.
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Author Information
Olivier Blanchard has extensive experience managing product innovation, technology adoption, digital integration, and change management for industry leaders in the B2B, B2C, B2G sectors, and the IT channel. His passion is helping decision-makers and their organizations understand the many risks and opportunities of technology-driven disruption, and leverage innovation to build stronger, better, more competitive companies.
