#26: Apple's New Category Creation Strategy

Steve Jobs famously said “people don’t know what they want until you show it to them.”

This sentiment is a driving force behind category creation - and one we saw front and centre at Apple’s WWDC23 event this week.

While Apple’s competitors have been hard at work selling virtual reality headsets, they’ve been planning an entirely new sub-category called spatial computing. And they’re betting big that it will help set them apart.

My LinkedIn feed this week was overrun with posts about the Vision Pro announcement and perspectives on this category creation move. So, for today’s edition, I’m going to share a few highlights from the posts that stood out the most.

Price Anchoring to Justify the Cost

Andy McCotter-Bicknell broke down his learnings into two categories: what companies can steal, and what only Apple can get away with. I loved this approach.

Here’s what he had to say about perception of value:

The Vision Pro is $3,499! Not cheap.

To justify the price, Apple used price anchoring. This technique forces people to refer back to another price point when making a purchase decision.

Apple framed the Vision Pro as the equivalent of owning:

• an ultrahigh-definition TV

• surround-sound system

• and a high-end camera

...into one piece of hardware. When you put things into that perspective, $3,499 doesn’t sound as expensive as it originally did.

Product Positioning That Puts Them Ahead

Of course, positioning queen April Dunford had wisdom to share on Apple’s strategy to expand in a market they already dominate. Here’s a snippet from her post:

If they positioned it as Virtual Reality, that would be attempting to lead in a market in which they do not currently have a position and that (arguably) other vendors (Facebook, others) have a head start in. If they tried to create an entirely new category, that wouldn't allow them to leverage their strengths in their existing market category.

So instead - in the same way that they positioned the iPhone as a computer and the iPad as a computer - this new headset is simply another form of a computer that leverages everything they are already delivering. There is an app store and Facetime support. It runs an "operating system," uses their M2 chipset, and has privacy and security "built-in." If you read the copy on the new pages - the device is very much positioned as an extension of what they already do rather than a new thing.

Value Propositions That Simplify the Complex

Tom Emrich is the Director of Product at Niantic, and is new to my LinkedIn feed. He’s a top voice in the AR/VR space, and I love how he spoke about the compelling value propositions Apple developed for the Vision Pro.

Similar to past new product announcements, Apple helped make something brand new and relatively unknown makes sense to many users by focusing on how it enhances our lives.

A. It replaces your monitor

B. It offers stunning entertainment

C. It provides new ways to collaborate and connect

D. It allows you to capture and relive memories