Security Software is complex at best and those who delve into this arcane science are want to spend hours poring over lines of code that could as well be a foreign language to most, but black hat or white hat, discovering a vulnerability buried in millions of lines of code is like cracking the Da Vinci code and can catapult the discoverer to fame in this very specialized world.  Apple (AAPL) has been battling with a small Israeli company, NSO Group (pvt), and Q Cyber (pvt) who developed one of its security software products based on a zero-day[1] vulnerability discovered in iOS.  The defendants allege that they sell their software known as Pegasus, only to governments and law enforcement agencies as ‘lawful tools to fight terrorists and pedophiles’, while Apple alleges that’ the software has been used to perpetrate attacks on Apple users and data stored on user’s devices’, although not on Apple’s own servers.
Apple classifies the defendants as hackers and to their point the US government has placed the company on its trade blacklist, although the company insists the software cannot be used for surveillance in the US, while Apple alleges that it has been used on iOS mobile devices owned by US citizens and has therefore crossed international borders.  NSO and Q Cyber have also faced lawsuits by other major CE companies, among whom are Microsoft (MSFT), Meta (FB), Google (GOOG), and Cisco (CSCO) but claim immunity from revealing customers as the governments to whom they sell their software should receive, although a recent 9th Circuit Court ruling held that the companies are not sovereigns and are therefore unable to claim immunity.
The iPhone and Apple products generally are considered among the most secure and are therefore used by lawyers, political officials, activists, and others who count of Apple’s security features to protect them from surveillance and data collection, but Apple alleges that while the company says they only sell the software, they have created fictitious Apple accounts  and even admitted that their products have been used (maliciously) to violate fundamental human rights, but at the same time has continued to update the software to exploit multiple iOS vulnerabilities in order for the software to continue to capture communications, location history, Wi-Fi passwords, and a variety of other private data on phones that have been infected by the software tool.
Apple has just announced that it will be adding ‘Lock Mode’ to iOS 16 that will put the device into the highest security mode possible, for what will likely be a relatively small group of iOS users that need to be protected from what is military grade hacking software. The new mode will block all message attachments except images along with message previews and will do the same for Facetime invites from anyone outside of your list, while blocking all wired connections with other computers, principally closing the Lightning port for everything other than charging, and finally Lockdown mode will not allow any new configuration profiles to be added to the device or will it allow any unrecognized code to be run from the messaging app.  Apple is so serious about this software that it is offering $2m[2] to anyone who can find a way to bypass the new mode and will donate $10m plus any proceeds from the lawsuit to organizations that investigate or expose targeted cyberattacks against journalists, human rights activists, and other targeted individuals. 
All in, the security space is one that pits power and greed against the conveniences that consumers want and expect and that balance changes constantly.  With every new update or patch comes the resources of those who wish to exploit individuals for their own purposes, political or otherwise, so the battle will continue, essentially using resources that could be used for more altruistic purposes, but the battle really comes down to how much security inconveniences the consumer, who thinks they have a handle on security because they change their password once or twice a year.  In this case, the fix is really targeted to a very small group of Apple customers and would not be used by most, but on a general basis the average consumer is vulnerable to a wide variety of malware and corporate security remains lacking as noted in the list of the 5 largest security breaches compiled by UpGuard last month.


[1] A zero-day vulnerability is one that has been discovered and disclosed but has not been patched.  Usually these are discovered by developers or research scientists before the company that originated the software, leaving users open to the vulnerability until the software’s developers can correct the flaw with an update or patch.

[2] Twice what Apple normally offers

​While quite far from the measures taken by the EU to codify the necessity of a universal charging standard, three US senators have penned a letter to Commerce Secretary Gina Raimondo, requesting that the US follow in the path of the EU and force all smartphone manufacturers to come to grips with a universal charging standard.  The letter, written by Ed Markey, Elizabeth Warren, and (surprise) Bernie Sanders, cites the CE industry’s failure to establish its own uniform charging standards and the resultant expense and frustration to consumers of having to purchase multiple charging devices and how that creates considerable electronic waste (53.6m metric tons in 2019.  The letter urges the US government to coordinate to form a comprehensive plan that will both protect consumers and the environment by addressing the lack of a common charging standard.

​China’s BOE has had a difficult time with Apple (AAPL), having been rejected a number of times by the company as a supplier of OLED displays for the iPhone 13.  BOE failed the approval process a number of times and was finally given permission to produce limited quantities of OLED displays, starting with replacement screens for those phones returned to Apple for repair, and eventually progressing to larger quantities for actual iPhone 13 production.  BOE ran into trouble however when it was discovered that the company had modified TFT circuitry traces without the prior approval of Apple, which resulted in a halt to much of the supply agreement between the two companies in February/March.
While there has been considerable speculation as to the status of the relationship, particularly as production for the iPhone 14 is about to begin later this month or in July, BOE has been working toward reestablishing itself in the good graces of Apple to regain standing as a display supplier for the iPhone 13 and iPhone 14, which are by in large produced by South Korean rivals Samsung Display and LG Display (LPL).  We believe they have been re-approved for the iPhone 13 and are back in production, but according to local South Korean press, must undergo a new approval process for the iPhone 14, which is said to be underway at Apple.  If BOE wins approval, they are expected to be producing the OLED displays for the iPhone 14 basic model, which is based on LTPS backplane technology, as opposed to LTPO that is used on the higher end models.  Depending on the time it takes, and the success of the evaluation, BOE would be a few weeks behind SDC and LGD in terms of production, but we expect the company will do whatever it takes to meet the volume goals needed by Apple in order to maintain what is a rather fragile relationship currently.

​Despite the reductions in forecasts for OLED unit volume this year, in the wake of rising inflation and China’s strict COVID p[policies, it seems that if you want to build out your OLED display business, you still have access to capital, and in this case it is not coming from the Chinese government.  LG Display (LPL) has announced that it has received $1b in funding for the expansion of its small panel OLED assembly manufacturing facilities in Vietnam, a part of its expansion plans that will facilitate a greater product flow to Apple (AAPL) and includes the expansion of small panel production lines at its plant in Paju, South Korea, a $2.5b project overall.  Funding, by way of long-term loans, was provided by Australia & New Zealand Banking Group (ANZ.AU), HSBC (HSBC), Citibank (C), and Caixa Bank (CABA.SM), with guarantees by the Korea Eximbank (state), Korea Export Insurance Corp. (state). 
 LG Display currently provides both LTPS and LTPO OLED panels to Apple for the iPhone 14 series, but faces competition from leader Samsung Display (pvt) and more recently from China’s BOE (200725.CH), who entered the iPhone supply chain last year after a number of failed attempts.  Since then BOE has been said to have been awarded a share of the iPhone 14 LTPS display production but more recently has been said to have been put on hiatus from Apple’s OLED supplier list after the company allegedly made changes to a display design without consulting Apple.  LGD is also looking to secure a place as a supplier of larger OLED displays to Apple and is developing production capabilities to that end as Apple is expected to continue to move its display procurement from LCD to OLED over the next few years.

​In our note of 06/01/22 we indicated the love/hate relationship that smartphone brands have had with ToF sensors that map image distance through the use of laser and VCSEL technology.  While Samsung (005930.KS) has abandon their use in its smartphone line, Apple (AAPL) has remained a staunch supporter and continues to use the technology for both identification and in image processing.  While the note was focused on the potential for ToF sensing in the AR/VR space, Apple has taken ToF’s ability to create a three dimensional image of an object one step further in the company’s just introduced iOS 16.
There are a number of systems used to create 3 dimentional affectures for typical 2 dimentional audio recordings.  When recorded tracks are mixed in a studio, sound engineers can use a variety of ‘tricks’ to make sounds appear to have ‘depth’, and as far back as the early 1070’s, 4 channel consumer audio products became available, although they required a 4 speaker system.  As ‘quad’ was never effective enough to justify the added cost of the hardware, such systems disappeared quickly and over time various techniques were used by hardware manufacturers to enhance typical stereo recordings, particularly for films.  One such enhancement was the sub-woofer, which filtered out  all frequencies above 200Hz and passed the remaining low end sinals to a specialized amplifier and speaker to bring out the vibrations associated with action movie soundtracks.
As TV technology continued to improve, many found the imbedded audio insufficient and companies like Dolby (DLB), DTS (XPER), THX (DIS), and iMAX (IMAX) began to find ways to enhance audio by creating processing systems that enhanced audio by using digital means to separate a stereo feed into a number of components (typically 6, known as 5.1) that maintained a left/right speaker set-up but added a center channel, two rear channels and the sub-woofer noted above.  For years this was sufficient for most however as TV screens increased in size, 5.1 audio, which tends to be horizontal (as if performed on a stage), did not correspond to the fact that images on a large screen might be at the top or bottom and not always in the middle and so audio processing companies came up with the idea that since the audio was digitized, why don’t we add two more speakers (above and below, creating a 7.1 format.
Again, this was still not enough for designers who wanted to create even  more realistic audio to match what was happening on large screens, and the idea of ‘objects’ was developed.  Object oriented audio means that aside from the standard 7.1 locations where sounds can be located, certain sounds (objects) are given metadata that allows them to be placed anywhere in the spatial realm but also allows them to move in 3 dimensional space.  This means that a sound engineer can assign a particular sound (loosely defined as a track) as an object and move it to match an object moving on the screen, no matter what direction it moves.   Once assigned and tracked by the engineer that audio object will always appear to follow the image on the screen.
This technology is very effective in theaters and in residential environments where the required number of speakers can be placed, but with the expansion of mobile devices and earbuds, the world of audio plunged back into the dark ages.  Early ear buds (some still are) sounded like tin cans and the many hours of time artists and engineers spent trying to make a recording sound optimal were reduced to a tiny vibrating disc that had the frequency response of a 1950’s car radio.  Ear buds have improved, at least to a degree, but audio that was mixed to 5.1 or 7.1 became flat without the additional speakers that earbuds could not provide.
Implementations of Dolby Digital+™, the most popular digital audio format, began to appear in mobile devices, allowing 3D spatial audio to be implemented in headphones but was a bit limited and mixes had to be adjusted to compensate for the lack of 5.1 or 7.1 speakers, but Apple decided that it could do more than just provide relatively expensive earbuds to its users and came up with the idea of ‘Spatial Audio’.  Spatial Audio uses the accellerometer and gyroscope found in mobile devices to map the sound field to the users head movements, so if the user turns toward the left, the audio moves the same way.  As always, you would need an Apple device to use spatial audio (some Beats products also work) and the Air Pods must be 3rd generation to use the function, but with the release of iOS 16 Apple has taken the idea further and this is where ToF comes in.
Apple users can use their iPhone to ‘map’ their head and ears.  Similar to the Face ID setup, you not only hold the phone in front of your head but you also ‘map’ each side so the system can get an image of your ears and head shape from a number of different angles.  Once the process is completed iOS 16 will remember your ‘head configuration’ so changing Air Pods will not mean a bunch of new head scans.  Once you have been scanned you now have ‘Personalized Spatial Audio’ which is said to reduce the audio artifacts that appear when algorithms convert 3 dimensional audio to headphone formats, but the difference is likely to be rather elusive for the average user.  That said, the idea of mapping audio to each user is akin to making sure that the speakers in a 5.1 or 7.1 set-up are in the proper locations and is certainly a path toward improving audio when using earbuds.
Having been in the audio engineering business years before entering the financial world we can appreciate Apple’s pursuit of improving the audio experience, despite the fact that it is done through tiny speakers jammed intoi your ears.  Any system that helps to recreate the subtleties that are so painstakingly added to recorded music are o.k. with us and we commend Apple for trying, even though we expect the average Air Pod user is likely to never look at audio settings or listens with one bud out.  Yes we are audio purists and elitists and listen only to FLACs when using headphone (not earbuds) and vynal when listening on speakers, but we appreciate Apple’s efforts to make the earbud experience a bit more realistic.

​Apple’s (AAPL) yearly World Wide Developers Conference began yesterday, and while reviewers were sufficiently upbeat enough to likely satisfy company management, there was little to get very excited about.  As a software developers conference, there was considerable focus in the release of iOS16, which is now available to developers and is expected to be released alongside the iPhone 14 series in September, at least in consumer beta.  While we will not go into the details of the new iOS and its variants in detail, there were two aspects that we thought noteworthy.
The first was Apple’s move into the BNPL (Buy now, pay later) genre for the iPhone, which allows iPhone users to split payments into 4 installments spread over 6 weeks, with no interest or fees (if you pay on time), and strangely for Apple, the option is not restricted to only Apple products and you don’t need an Apple Card.  Goldman Sachs (GS) is the attached bank, but details as to who might be absorbing the interest costs were not revealed.  The concept is similar to PayPal’s (PYPL) BNPL, which limits the service to transactions between $300 and $1,500, while Apple has yet to specify limitations.
We have noted some of the security issues facing those using Apple’s Air Pod tracking devices, with boy/girlfriends or spouses using them to track or stalk former partners, going as far as to hide them in cars or personal items.  Apple has taken this seriously, going as far as to include the features, known as “Rapid Security Response” in the developer version and making the update automatic, rather than forcing the iOS 16 user to reboot to have the changes take effect and institute further protection against cyberattacks and potential software vulnerabilities, but also adds “Safety Check” which implements a number of features that would help to protect those being tracked or harassed.

1. The system can disable sharing of location data.
2. All application permissions are reset, which means no outsider (many couples share permissions to make sure the other person has not been in an accident or hurt in some way) can access the camera, microphone, or any other application that might have access to same.
3. Removes outside access to messages.
4. Facetime is limited only to the user’s device.
5. All recently deleted or hidden photos are locked and cannot be accessed by others.
6. All device iCloud accounts on all devices can be signed out at once.

As these precautions will be automatically available with iOS16 users will have access to these functions as soon as the major iOS update is made and will also be included in iPadOS16, WatchOS 9, and MacOS Ventura in September.   We commend Apple for being proactive in making these security improvements quickly and easily implemented.
We note that while this was a software developer’s conference, there were some hardware changes announced, although we would consider them relatively minor.  To use of most significance was the lack of any AR/VR reference or teasers, as we suggested might be the possibility in our note yesterday, and while this is disappointing from a product perspective, we expect it will be a positive for Apple in the long-run, as they continue to further refine their AR/VR headset prototypes further.  There were some other upgrades, with the Mac Book Air and the Mac Book Pro 13 shifting to Apple’s M2 chip from the previous M1, which should noticeably improve performance, but the price of the Mac Book Air also increased from $999 to $1,199, which could push it near or to the budget limit of those looking for MacBook performance but at the lowest possible price.  The MacBook Pro 13 with the M2 chip sells for $1,299, with both expected to ship in July.  All in, a relatively uneventful event.

​There has been an endless outpouring of speculation, rumors, and flashy mock-ups of what is expected to be Apple’s (AAPL) first official announcement concerning the potential unveiling of its first AR headset and its ‘realityOS’ operating system at the Worldwide Developers Conference that begins today at 1:00PM ET.  The virtual event is expected to give information on iOS 16, iPadOS 16, macOS 13, watch)S 9, tvOS 16, and possible hints toward some hardware for the MacBook Air, the MacPro, and the long-awaited AR/VR headset that has been rumored for the last few months.
It seems however, that word has gotten out that Apple has told its suppliers to hold production until October, which would push out the release of any such product until 2023, rather than later this year.  Apple could still announce the reality OS at today’s event or in the near term, as developers need time to modify existing apps for the new headset, with Apple supposedly working on a migration tool to help developers adapt applications more easily.
While much excitement surround the potential for Apple’s entry into the AR/VR world, we believe if Apple is serious about the category as a major product line, it will take a considerable amount of time and product iterations to come up with what would be a practical AR/VR product.  With the category still in its infancy, and a trail of relatively unsuccessful products from other companies in its wake, we expect Apple to tread slowly and carefully, leaving as much time as necessary to its product development team before releasing even an early model, as this first iteration would be. 
To us, the real question is will the first release be an actual consumer oriented product or one designed to give app developers a platform on which to develop AR/VR content that would take advantage of the feature set that Apple will include in the reality OS, that will set it apart from others and allow Apple to create another proprietary ‘world’ of Apple AR/VR products to maintain a loyal customers base.  Apple’s delay (should that be the case) should not be looked at as a negative but more of an attempt to get their first product reveal as close to a practical product as possible.
While Apple has never been a technology leader in the sense of rushing to market with technological advances, their customer base seems to rely on them to make sure a technology is stable and benefits the user before they begin to capitalize on the trend.  This was quite apparent with Apple’s adoption of small panel OLED display technology which first appeared on the iPhone X in late 2017, over 10 years after the technology was used in early smartphones. 
We expect Apple is in no rush to jump start it AR/VR effort until it meets at least three goals.  First it needs to be technologically sound and reliable, second, it needs to serve a valid and practical purpose, and third it needs to be ‘cool’ looking, so postponing a potential release until issues are resolved would satisfy the first goal, allowing developers a physical and software development platform on which to work, could satisfy the second goal, while the 3rd will likely take a release that Apple might not consider ‘the actual product’ until it is able to apply its unique design qualities to make AR/VR its own.  We are not making excuses for a potential delay, but applying many of Apple’s historic principles to a new product line.  Maybe Apple will reveal all today and will prove us to have overthought the situation, but the company thinks differently than most.

Smartphone brands always seem to be deadlocked in a battle for share supremacy.  Whether it is units shipped, sell-in, sell-through, units in use, or some other metric, there is always a “Mad Libs”-like headline proclaiming “…and so (Brand A) has now overtaken (Brand B) to become the best-selling smartphone in the (Country) during (Period)…”, only to find that during the next month, quarter, or year, another brand fills the top spot.  Production targets are also a watchword of smartphone brands, with usually grandiose projections being made for the following year during the Thanksgiving/Christmas holidays, which tend to be more a projection of what the brands would like to ship in an ideal environment, rather than what they believe the upcoming environment might support.  But those projections also give smartphone suppliers a broad picture of ‘demand’, and help them adjust their production and capex spending for the upcoming year.
Sources for smartphone data vary considerably, and in many cases do not agree with each other, which is why when we use outside smartphone data we average as many sources together as possible, and while this sometimes keeps our share totals from exactly hitting 100%, it does reduce the influence of outliers and those that include or exclude certain items that other might or might not.  That said, Table 1 shows that the most popular selling phone models are the iPhone 13, released in September of last year and two budget Samsung (005930.KS) phones, one from last year and one from late 2020, a bit surprising, although Apple (AAPL) tends to be in the top 5 every year.

The data in Figure 1 however shows that in most recent quarters, Samsung is the overall global share leader, although that tends to change to Apple in 4Q when the latest iPhone version is released.  More telling is Figure 2, which shows the top 5 smartphone brands by usage, more a reference to the number of active smartphones for the top brands.  That data shows that both Samsung and Apple garner roughly the same usage share, and Huawei (pvt), who has fallen off the top smartphone tables since the US trade sanctions curtailed their smartphone business, is still number 4 when it comes to models currently being used by subscribers.
In recent quarters it has become a challenge for smartphone brands to differentiate themselves from each other, focusing on a particular feature to try to set them apart.  Screen size and resolution was a big feature attraction, but pocket size tends to keep that limited now, and multiple cameras were in vogue a year or so ago, with the current de riguer being phones that have the cameras built into the display, removing those unsightly ‘notches’ that seem to annoy smartphone aficionados.  At least for the time being Samsung seems to have taken the size feature to a new level with their popular foldable smartphone line, with other brands pushing hard to come up with a better foldable mousetrap, an Apple sitting somewhere on the foldable horizon, waiting for the category to stabilize before taking the plunge. 
But with each new model year it seems progressively more difficult for smartphone brands to come up with features that make it easy for users to justify replacing a relative young smartphone and 5G has done little to push that envelope as 5G modems and antennae costs are relatively low.  Gaming features, such as high refresh rates and extended battery life have helped a bit, but the smartphone market overall is getting a bit long in the tooth and needs some impetus to grow.  Perhaps software would be the way in which brands could attract users to upgrade, but that would entail smartphone brands making fewer modifications to Android, giving developers and easier time to ensure compatibility across brand hardware, but what it really comes down to is smartphones need new applications that make them more than just displays.  Some suggest medical applications as a game changing application, and the FDA seems more open to health tracking applications recently, so blood pressure, heart rate, ecg, and blood glucose monitoring could be just what the smartphone market needs to start an upgrade cycle, but few brands seem to be interested in marketing themselves as ‘health conscious’ rather than ‘faster to view YouTube videos’.  Maybe another year of little or no growth might convince them to look for a killer application rather than cameras that rival professional SLRs.

​The same South Korean trade publication that we noted in our 5/4/2022 note was hinting that BOE (200725.CH) was in the Apple penalty box over changes made to circuit design without Apple’s permission, is back with similar speculation that BOE’s display production participation in the iPhone 14 could be reduced or eliminated, even after BOE officials visited Apple’s headquarters to plead their case.  A number of scenarios are presented in the most recent article by the South Korean media source, the most extreme being that BOE’s 30m unit OLED display order (6.1” panels) would be given to Samsung Display (pvt) (20m) and LG Display (LPL) (10m), who are already expected to be producing the iPhone 14 Pro and Pro Max displays in late June or early July, and that BOE would be limited to producing legacy iPhone (12 & 13) OLED displays for the remainder of this year, likely a total of 20m units, 10m of which have already been produced.  Less aggressive scenarios push back BOE’s iPhone 14 OLED display production until early next year and limit it to 10m units, assuming that they are fully reinstated by Apple by the end of this year.
As we noted previously, BOE struggled during 2021 to pass the stringent qualification requirements that Apple imposes on its OLED display producers and was given legacy OLED replacement screens initially as a test to make sure the company was able to meet yield goals.  This was then advanced to producing actual iPhone 13 and 1`4 OLED displays when BOE finally was able to qualify production, but within a relatively short time the story of BOE’s design change seemed to indicate that BOE was in the penalty box with Apple and had been suspended from further production, leading to a drop off in BOE’s flexible OLED unit volumes in February and March (unconfirmed). 
Given the source for this most recent speculation is South Korean, where both SDC and LGD reside, and that the Chinese trade press has made innumerable statements about how BOE’s inclusion in the Apple OLED display supply chain marks the end of South Korea’s domination of the OLED business, we are reticent to take it at face value until the data becomes available.  It would be surprising for a panel producer to make a change in design, even for a legacy product without getting approval or qualification from the customer, especially Apple, but it is certainly possible that such a change was made and is now causing BOE to bear the consequences.  Any negative scenario will hold back BOE from becoming a primary supplier, as can be seen from the years it took for LG Display to gain full OLED display qualification at Apple after it failed to meet production quotas back in 2019.

​The Apple (AAPL) world is once again abuzz with rumors that Apple is getting ready to announce a long awaited AR/VR headset device in the near future, with much of the stimulus coming from a report that Apple board members were treated to a preview of the device at a recent board meeting, which was taken to mean that such a device (codename N301[1]) is in an ‘advanced stage’ and that a second AR only device (codename N421) is under development, along with an XR operating system (codename rOS[2]) under which the platforms will run.  Some have liken the potential release of an Apple AR/VR product to the announcement and release of the Apple Watch back in September 2014 and released in April 2015, the last new product category released by the company, but we have a great deal of trouble equating a digital watch, a form of device that has been around for more than 150 years, and a device that has been around commercially since 2013 and is still under considerable development. 
The rumor mill has been churning out ‘details’ about Apple’s AR/VR development project team (codename TDG for ‘Technology Design Group’), which has been said to consist of up to 2,000 Apple employees operating out of one of Apple’s Sunnyvale R&D centers since 2015, especially after Apple stepped up bonuses for key employees at the end of last year to stem Facebook’s (FB) talent poaching to broaden Meta’s own XR project (codename ‘Project Cambria’).  However there have been many false starts concerning Apple's AR/V’ development, with a number of loose timelines for an announcement and release passing by years ago (First was 2019?), so leaked progress reports, renderings, a component ‘details’ continue as the project winds on.  Excitement usually builds as we approach the Apple Developers Conference which starts on June 6, during which bits of code that might reference such an operating system or application for AR/VR are revealed during sessions or leak out ‘accidentally’, and this year is no different given the ~92% expansion in AR/VR units seen in last year, but also putting that in perspective, it equates to ~11m units, while smartwatch shipments reached over 127m units last year of which Apple has a roughly 50% share. 
While we can cite all sorts of potential features and component specs that have been speculated on in reference to a potential Apple XR headset, we expect Apple to push both design and performance specifications when it finally makes such a device available, but even the mighty marketing machine at Apple likely recognizes that aside from a ‘cool/hip’ design, any commercial XR product needs a very compelling application to make it a ubiquitous product, and asking customers to fork over somewhere between $1,000 and $3,000 for a headset that tells them how much further they have to run before they meet their daily goal or how much that handbag in the window costs on Amazon (AMZN) might be a hard sell.  The Metaverse is an attractive incentive for hardware manufacturers but the Metaverse is still a conceptual idea rather than a practical one and has little intrinsic value other than as a publicity tool. 
We do note that Google (GOOG) does seem to understand that in the real world applications sell hardware (see or note 5/12/22), especially for relatively new product categories, and while we expect Apple to capture significant market share in the XR space when it finally enters and will add considerable legitimacy to the space leading to market expansion, there still needs to be a reason for consumers to want to wear even a sleek and hip looking headset for an extended period of time.  VR’s entertainment value is obvious, although far from mainstream and so we look toward AR as a more realistic approach to the extended reality space, but again passing curiosity does not sell millions of units but practical applications do.  Did you buy your first smartphone so you could watch chimpanzees in Uganda from a secret encampment or did you buy it so you could speak to colleagues, friends and family whenever you were away from a ‘landline[3]’?


[1] You know its real if it has a codename, right? 

[2] The ‘r’ in ‘rOS’ stands for ‘reality’, another codename adding additional ‘code name cred’ to the story…

[3] For the younger generation, a ‘landline’ is a telephone that is connected to a carrier through a wire and is traditionally mounted permanently in a home or office and cannot be carried with the user.