Apple (AAPL +1.18%) and The Walt Disney Company (DIS +7.54%) have had plenty of connections through the years. The late Steve Jobs, Apple's co-founder, ranked as Disney's biggest shareholder for a while. Disney CEO Bob Iger served on Apple's board of directors in the past.
And now they're at it again. Iger and Apple CEO Tim Cook are teaming up on tech's next big venture.
Image source: Getty Images.
Making a vision a reality
Apple made a huge splash at its 2023 Worldwide Developers Conference (WWDC) this week with the unveiling of its Vision Pro mixed-reality headset. It's the first new product from Apple since the launch of Apple Watch in 2015.
Iger was part of the festivities, appearing in the launch video for Vision Pro. He said that Disney is "constantly in search of new ways to entertain, inform, and inspire our fans by combining extraordinary creativity with groundbreaking technology to create truly remarkable experiences." He added, "And we believe Apple Vision Pro is a revolutionary platform that can make our vision a reality."
Disney+ streaming service subscribers will have a chance to have those "remarkable experiences" when Vision Pro becomes available in early 2024. The mixed-reality headset will integrate with Disney+ in several impressive ways.
The video shown at WWDC 2023 displayed Disney+ viewers seemingly in the middle of an ocean watching a National Geographic program. Other viewers watched Star Wars content from an alien planet. Another part of the video featured Mickey Mouse appearing in the living room and Disney's theme park fireworks exploding in the kitchen of Vision Pro users.
The big question
It's uncertain how much Disney has invested in developing immersive content for Vision Pro. Regardless of the actual amount, the big question is: Will the investment pay off?
Apple set a retail price tag of $3,499 for the first version of Vision Pro. By comparison, Meta Platforms' Quest Pro is currently available for $999.
The steep price tag for Vision Pro could significantly limit the number of users. TD Cowen analyst Krish Sankar predicts that the headset could only sell in the hundreds of thousands of units in its first year, a sharp decline from the millions of Apple Watches sold after its launch.
A low user base for Vision Pro wouldn't help Disney grow its streaming subscribers. A less-than-stellar launch would almost certainly slam the door on significant additional investments by Disney in creating content for the device. Disney+ content costs are already a concern.
"Real-life magic"
However, Iger sounded optimistic about teaming up with Apple. He said, "We're so proud to yet again be partnering the greatest storytelling company in the world with the most innovative technology company in the world to bring you real-life magic."
investors appear to be hoping that Disney can create some of that magic with its content for Vision Pro. The top entertainment stock has risen more than twice as much as the S&P 500 so far this week.
NYSE: DIS
Key Data Points
Don't underestimate either Apple or Disney. Apple has succeeded in the past in launching groundbreaking new devices where others failed previously. If any company can develop content that makes mixed reality a hit with audiences, it's Disney.
Investors also shouldn't give up too early if Vision Pro isn't a massive commercial success right out of the gate. Apple is likely to roll out less expensive versions of its headset in the near future to expand its customer base.
Iger's and Cook's new tech venture could very well be a game-changer in entertainment over the long run. I predict that both Apple and Disney stocks will be worth a lot more down the road as a direct result of the announcements made this week.
