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Stop me if you’ve heard this before: Apple is building a mixed reality headset that’s slated to ship this year. The company’s MR (AR+VR) hardware is among the longest-running rumor cycles. Some (Apple Watch) have borne fruit. Others (that pesky Apple TV device) not so much.
The category doesn’t feel like a foregone conclusion to Apple. The road to a successful XR game is littered with the boards of large corporations and well-funded startups. The overwhelming state of affairs is certainly not due to a lack of trying. It’s also a whole new product category – something that doesn’t happen every day.
There’s an interesting conversation about how such a product would feed into Tim Cook’s legacy, more than a decade after he took the job as chief executive. While Steve Jobs’ role at the helm of the company during the development of the Mac, iPhone, iPad, etc. cemented his position as one of the 20th/21St Century-leading technologists, it seems entirely possible that his leadership’s suggestions around the product that would become the Apple Watch are somewhat overdone.
Regardless of what knowledge he had during the project’s infancy, Cook probably deserves the lion’s share of the credit for bringing the product to the world. The same is true for AirPods, although one can also argue that these products were an evolution of Apple’s (and perhaps Beats’) existing work in the category. Smart home speakers also arrived under Cook, but one would be hard pressed to call these a success on par with the products mentioned above.
Over the weekend, the Financial Times ran an article quoting an anonymous former Apple engineer who stated: “They are under tremendous pressure to deliver. They’ve pushed back the launch every year in the past [few] Years.”
Overall, Apple has apparently been working on this product for seven years. At least the above comment gives a break. It doesn’t sound particularly optimistic for a company looking for the next piece of consumer hardware in the wake of an overall slowing smartphone market. A correction is also currently taking place in the Smart Home area. Apple has completely dominated the smartwatch category, reportedly selling around 200 million watches. Still, nothing seems poised to compete with the billions of iPhones sold.
Apple appears to have anticipated a slowdown in the smartphone market and has easily shifted large revenue numbers to its content business. So it’s fair to ask if hardware will simply take a backseat for the company going forward. However, according to the FT article, “some within the company believe [the headset] could one day take on the iPhone.” There has been much bet against Apple in the past, but the dispersed market state raises skepticism.
I met with the big players in VR at CES in January and two things struck me. The first is the foray into the company. Of the four headsets I’ve spent time with, only one (PSVR) is primarily consumer-focused. Magic Leap has been completely business-focused, while Meta and HTC are also leaning heavily. Makes sense. The consumer space is unproven, and there is one ton Making money to sell this stuff to companies.
“We really saw that AR can pull value out of companies much earlier,” Daniel Diez, Magic Leap’s CTO, told me at the show. “The feedback we got from them was that. It also gave us a glimpse of how the product needed to evolve to be truly enterprise-ready, and that’s exactly what you see in Magic Leap 2.”
The other part is that virtually everyone I’ve spoken to has told me they’re excited for Apple to walk into the room. It’s a kind of rising tide that lifts all ships. The entry of Apple would – theoretically – create new market shares instead of restricting what already exists. Although it’s been around for decades, it’s a nascent category, to say the least.
Technology has long been the big topic there. Having played around with the existing generation of products, however, I can safely say that the big players are already doing some really impressive things here. If you haven’t tried the technology since the days of Google Cardboard, do yourself a favor and find a headset to play around with. The other bottleneck is the software. Apple’s entry into the field would help tremendously on that front.
Many of the most important hardware components are also available for Apple. Internal silicon is a big potential driver here, especially since the company has made big strides on the GPU side. Given that this is likely to be a major ecosystem (because Apple is), this could well be the time when AirPods’ spatial audio shines.
Of course, the company doesn’t comment on this. With the exception of a few major hardware glitches (MacBook keyboards, Studio Display webcam), the company is waiting until things are fully baked before releasing them to the public. Apple is known for taking its time – not being first to market and still managing to launch category-defining products. In the case of things like the AirPower wireless charger, Apple chose to scrap the project rather than deliver something immature.
The company told us at the time: “After much effort, we have concluded that AirPower will not meet our high standards and we have canceled the project.”
But an MR headset is not a wireless charger. For Apple, it’s a big chunk of the company’s future. While that just underscores the importance of getting the product right the first time, it also underscores why shareholders are likely to be increasingly impatient after seven years of planning.
Regardless of whether Apple needs a mixed reality hit, however, mixed reality increasingly seems to need an Apple hit.