How Apple Glasses will be judged vs. Oakley

I am blessed with shitty vision.

Those are photos of my eye glasses, above. I'm very near sighted, have inflexible eyes that change often, and have astigmatism to boot. Only a small percentage of you, thankfully, have worse eyes than I do.

My crappy eyes both make me an excellent potential customer for Apple's new Glasses, widely rumored to be coming in 2022, but also make me one of the most difficult to satisfy and give me insights into the eyeglass industry that others might not have, more on that in a second.

Here I'll go into why over the next few thousand words, but I've also been inside the belly of the beast that Apple is trying to disrupt: Oakley. Why did I visit? A friend worked there and about a decade ago it was making a ski goggle it wanted me to see that had a computer inside, so I got tours of how they made lenses and the designer's workspaces, amongst other things there. They also have prototype retail stores there so they can think through their retail displays. All of which Apple is going to have to replicate at some level if Apple really wants to get into the eyeglass world.

First, let's get the links in here to a bunch of the recent rumors and analysis, just in case you missed it.

• Jon Prosser rocked the Internet with a series of leaks, where he says he learned form factor, price, and shipping dates.
• Analyst Gene Munster says Apple's "design advantage" could help drive the success of its rumored augmented reality glasses.
• Optics expert Karl Guttag analyzed the Prosser leaks in a two-part in-depth analysis of the technology possibilities. Part I. Part II.
• Apple Insider on How Tim Cook's Augmented Reality vision paid off for Apple.
• My earlier article on why Apple isn't doing VR devices, focusing on eye glasses instead.
• Doug Thompson on "Apple Doesn't Care About Augmented Reality, Here's Why."A followup to my article about why it isn't doing VR.

While others, like Karl Guttag, focus on the potential technology inside, here I focus on the business and marketing questions of how the market could judge Apple and whether or not Apple will be able to grab a significant chunk of the existing eyewear market. Clearly the potential is there, but this is a much more difficult thing to do than disrupting headphones or watches and explains why Apple is moving so slowly and, even, is being fairly conservative with the technology choices it is making (whether I agree or disagree with those choices is for another post and probably is more appropriate to do after we see what Apple actually launches). I'm skeptical about the leaks for a variety of reasons but this post isn't about the leaks, it's a look at what Apple could actually get if it entered into the eyeglass market and how it will be judged vs. Oakley and other existing concerns.

VISITING OAKLEY

When you visit Oakley's headquarters near Los Angeles it looks like the Death Star out of Star Wars. Its then CEO Colin Baden, was the chief architect on it. Here's a photo I made in 2010 during one of my visits to its headquarters.

Now, you probably know of Oakley because of its famous sunglasses, but it makes a variety of products from boots for military uses to suitcases, amongst other things, but if you get inside Oakley's headquarters and meet with its CEO, like I did, and get a tour you see that it is mostly an R&D division of EssilorLuxottica, the $57 billion market cap eye wear company. It also manufactures every lens there in a sizable factory in the back with ovens and other equipment to build lenses, coat them, and put them into frames. It's one of the few companies that hadn't moved its manufacturing to China. It also plays another role: Luxottica has partnered with Facebook on a future version of Oculus glasses too, but this is about Apple and how Apple might disrupt what Oakley is doing.

First, let's assume most of the recent Apple rumors about it doing a pair of eye glasses is right. This isn't a post about those rumors or whether they are valid or not, but is really a breakdown of what Apple will have to do to win people as customers if they do get into the eyeglass space.

It makes sense, as I covered in a previous post, for Apple to do that, but if Apple is going to really take away a lot of Oakely's, or the larger EssilorLuxottica, which owns many eye glass brands, including the famous RayBans, and distribution/retail stores like Sunglass Hut, then we must analyze how Apple will do vs. Oakley's various business concerns and, even better, lay out how Apple's Glasses might be judged by consumers.

To do that we need to split up Oakley into a few things:

1. Optometrist and Eye Exam (or drivers to buying eye glasses)
2. Fashion and fit (drivers of choice)
3. Form and function (drivers of brand loyalty)
4. Innovation, er, new features (drivers of market expansion)

OK, let's dive in.

DRIVERS TO BUYING EYE GLASSES

Did you know that 60% of us need some eye correction? Obviously if you can't see street signs, like I can't without glasses, you will be very motivated to seeing an optometrist like I did back when I was a kid (I couldn't read notes the teacher was writing on the board, even though I always sat in the front row).

A family friend, Neda Moshasha, is my optometrist and the last time I visited her I studied what she does. She has a retail store in Half Moon Bay, California, HMB Optometry Family Eyecare, but in the back she has several rooms with expensive and specialized equipment. This equipment helps her analyze my eye's health as she looks for problems like cataracts, but also helps her figure out how messed up my eyes are and find the right diopter to use and the right prescription. If you have ever visited an optometrist you know this equipment where they have you look at a chart of letters or patterns and ask you to choose between a bunch of different lenses.

The last time I was there she even had a 3D scanner that scanned the back of my retina to figure out if there was any nerve damage or other medical problems that she needed to pay attention to. This is the scan of my own eye she made.

Now, not everyone visits a store like hers because their eyes are bad. Some just want protective lenses for playing sports, or, maybe working on a factory floor. Others want sunglasses. Yet others may want to change their appearance. Actors, in plays or movies, for instance, often wear eye glasses that they aren't forced to wear.

But in watching her work with her customers and in discussions with her, and execs at Oakley, they know that corrective lenses drive a LOT of people, if not the majority, into Optometrist offices and retail stores like the one Moshasha owns.

There are a variety of price points, too. Mine are the most expensive she sells and ran almost $1,500 before insurance (my lenses are the absolute best made, with best coatings, progressive lenses so I can see near and far, and they also get darker in the sun) but more on those later when we talk about "Minimal Viable Product."

The takeaway here is that Apple will need to offer a similar experience in all its retail stores. Or, will it punt and say "go down the street to get your prescriptions?" If it doesn't have an optometrist in the store, with all that equipment, then the optometrist can both increase the price for getting Apple glasses for 60% of us, but also can sell against Apple.

If Apple doesn't offer corrective lenses, or doesn't have the features that my eye glasses have, like the ability to see near and far, or the best anti-scratch, anti-fog, and anti-glare coatings, some percentage will hear the disadvantages and decide to stay with traditional eye glasses. This is why EssilorLuxottica has a near monopoly over the eye glass industry: they make it very worthwhile for Optometrists to push their product. Apple will be seen as a threat to the entire Optometrist's business, so people who come in for just an eye exam so they can go back across the street to buy Apple Glasses will get a full court press to buy a product in the Optometrist's office.

Let's dig into the market. According to Liam O'Connell the eyewear market was valued at approximately $131.32 billion in 2018. Grand View Research says that Spectacles dominated the product sales at about 78%. This is clearly the market Apple is going after.

The other thing that I took away from Grand View's research is just how dominant brick and mortar sales are over e-commerce. This is a category that is hard for Amazon to make inroads into. This makes sense when you look at the need to visit a physical store to get an eye exam. That's just not possible to do over the Internet and is something Apple should worry a lot about.

FASHION AND FIT

The fastest growing segment of eye glasses are the ultra lightweight and thin frames, enabled by new materials like the Titanium frames I have. It's easy to see why: they look awesome, but fit even better, being ultra low weight. The titanium frames I have are very strong and very flexible, too.

Things on our face are amongst the most personal fashion choices we can make. I put a photo of Bono here, because one rumor is that Apple worked with Bono to come up with the design of its Glasses. He has something like 700 different pairs of eye glasses and if you search Google for "Bono eye glasses" you see just how many different "looks" he has with them.

Oakley hires dozens of designers and gives them rock star status. It's one reason why its headquarters is designed that way: it screams "design is king" inside.

Now Apple's headquarters screams that, too, and clearly Apple won't release a product that looks dorky, or nerdy, the way a HoloLens, Oculus Quest, Magic Leap, or Nreal do. The design, or "look" of them will be a huge Apple advantage over the tech-heavy crowd. That said, Apple isn't chasing Oculus or Magic Leap here, it's chasing Oakley.

With Oakley consumers have dozens of different frames, and many colors and other choices to make. Apple's approach usually limits it to a few sizes, and then maybe some color or material choices. Apple's watch shows that the main piece is available in a few sizes and then you get the "fashion statement" from the dozens of watch bands you can buy to change the look of the device. I'd expect the same with Apple's Glasses. That said, here Oakley probably will have an advantage. Especially if you are an athlete. Oakley prides itself on its safety design, and its fit and finish, after all, if you are skiing in the Olympics and your glasses fall off, or break on impact, then you'll never wear Oakley again.

Apple will be judged by the places that Apple Glasses won't be appropriate. Hockey? Skiing? Mountain biking? Police or military uses? Factory floors? Rainstorms?

Oakley does demos where they shoot pellets at their, and their competitor's, lenses. Theirs stay strong, which wins market share especially amongst athletes who treasure eye protection above all else.

We'll have endless debates about all this. I can wear my eye glasses in very heavy rain, and they've taken quite some blows (rough play with kids is extremely tough on my eye glasses. I even broke a pair once because I fell asleep and didn't notice they had fallen onto the couch from where I left them, so crushed them accidentally. All of this goes into the choices we will make and too many tradeoffs here will keep us from choosing Apple to put on our face.

That said, for a lot of us, Apple IS a choice and does say something about us. All the AirPods that are being worn around the world shows that we are very happy to wear something that clearly says "Apple" to the world and I'm expecting high marks from anything Apple does here.

I'm hearing its testing out some pretty outrageous designs, too, and that everyone will know you are wearing an Apple device. Not everyone will like that approach, though, and we'll see similar conversations and debates like we saw after Tesla's Cybertruck announcements. Many loved that, but many hated it too. Fashion often polarizes and it'll be interesting to see how Apple navigates here, but I'm expecting them to look amazing and that most people will be happy wearing them.

FORM AND FUNCTION

This is where Apple could really hurt its long-term image.

Let's say Apple decided not to offer me a pair of glasses with my needed corrective lenses (Oakley has a very limited set of choices for me, since my lenses are much thicker than most people need, but at least there's a couple of pairs I could buy at the Oakley store when I visited). Wouldn't that make me feel pretty shitty about Apple? It sure would. I'd go from the biggest Apple fan to someone who is pretty damn whiny about how Apple left me out of the Spatial Computing revolution.

If Apple doesn't offer a good set of lenses, or if I am forced to take them off, then it will hurt its brand loyalty and open up markets for competitors.

If I was Tim Cook I'd have four "S's" on the walk: Sleep, Sex, Swimming, Showering. Those are the only four reasons that we should have to take off the Apple Glasses (and those are the only times I take off my current glasses).

If Apple, because of its lens or technology choices, force us to take off the glasses at other times, then our happiness with the brand will go down. Charging will be a huge one. I don't need to charge Oakley glasses, or my current ones, so if I need to do a lot of charges, or long charges, brand loyalty will go down.

Same if I have to take them off to read a book, or a menu, etc. That's why I paid extra for the progressive lenses in my current glasses (the bottoms of them have the ability to see near, the tops of them see far).

Notice I've written quite a few words so far and haven't even mentioned Augmented Reality, I will leave that for the next section, because I'm with Doug Thompson when he says Apple could ship without AR and still have an amazing product that would do well in the marketplace against Oakley. I think that would be a major mistake, but I'll leave that for the next section.

That said, some things that will really help Apple? If it does some magical things with integrating audio into the glasses. If it made glasses that really fit well (why not 3D scan faces in stores and "bend" the product to fit your face exactly?) then it would be seen as next-level.

If we have to take them off in the sun, or if they don't work well, that'll be held against Apple. If we have to take them off while driving a car, that will be held against Apple. Or, while doing anything, really.

Function will also include Siri integration (and we all know Siri sucks when compared to Google Assistant) so if Apple doesn't greatly improve Siri that will open up tons of brand loyalty problems for it down the road.

INNOVATION, ER, NEW FEATURES

Here is where I can see Apple shine, and have a road map for years that Oakley simply can't match. Nothing Oakley has can even match simple HUD-style features, like seeing Siri answer you, or your favorite song, or that your boss is calling, or showing you texts from your wife or lover.

Apple, even if it left the camera off, as some of the latest leaks predict (Prosser's leak says that Apple will go with just a LIDAR, instead of a camera, mostly for privacy reasons, but also to keep costs down) Apple could have a range of next-generation augmented reality features that would improve eye glass experiences immensely.

Some I expect?

• See better at night. The LIDAR could show you the world around you in 3D even if it's pitch black. I'd put those on to walk around the house in the dark without turning on lights.
• Text augmentation. Look at a menu and 3D food pops out. Plus it translates that to your language. Zooms the text so you can read it. Makes low-contrast text have edges or contrast so you can more easily read it. Etc. etc.
• Shopping assistance. I already am using my Amazon Echo to make shopping lists "Hey Alexa, add bananas to my shopping list." Something on my face would be far far better than pulling out my phone while shopping and it could augment products and/or show me tons of information about them.
• Homework check and assistance. The LIDAR could read my son's math homework and look for errors. If he had a pair on, it could help him "hey Siri, what's the square root of 64?"
• Cooking assistance. "Hey Siri can you show me how to make a great turkey dinner for Thanksgiving?"
• Screen augmentation. Look at your watch and a much bigger screen pops off of it, with a lot more info.
• Football screen grab. I hit this while watching the 49ers in the playoffs a few months ago. During the game Maryam (I'm her husband) insisted on taking the family for a walk. I pulled out my iPhone, opened YouTubeTV, and selected the 49er game, then put in my AirPods. I'm expecting the glasses to just have to be told "put the 49er game on my glasses instead of my Apple TV" and all that would happen magically.
• Play with a friend. "Hey Siri, call Andy Grignon and see if he wants to join our 3D poker game." With LIDAR-based glasses you could easily have multi-party 3D worlds that you could play in. Even having things like football games, or board games, etc. Zoom calls would soon be antique.
• Navigation assistance. "Hey Siri, I need some birthday balloons for a 13-year-old girl, can you show me where to buy them?" On the glasses it'll say that Safeway has some in stock and show you a blue line for how to get there, along with a little map. "Take a left on Winchester."

I could go on for years with potential features that Apple Glasses could show on their screens with just a LIDAR (I am hoping that a camera or four gets included in a set too so that we could open up and do things like "hey Siri, call Grandma so she can watch my child's first step"). Either way, Oakley won't be able to match these things. I just hope Apple doesn't make me give up many of the features of my current glasses to get any of these new things.

Anyway, to wrap it up, if Apple gets it right I'm expecting it to sell more in the first weekend than, say, the VR industry has sold in five years. Why? Because if Apple gets eyeglasses right they will be much more useful to a much wider group of people.

If Apple gets the mix of features and retail wrong, it opens up opportunities for other companies to take share and there are others that will be coming for Apple in the next 48 months. Facebook, in particular, is planning its own pair of glasses that will build on the Oculus franchise. Others, like Google and Amazon, are working on products that will come after Apple and will be watching if Apple stumbles.

To finish off, Irena Cronin and I will be running a Virtual Roundtable on June 16th with a variety of people from the industry about just these issues, more details on that soon.