'Apple Glasses' AR headset could launch in 2021, says Gene Munster

Posted:
in AAPL Investors edited May 17
Apple could release a highly rumored augmented reality wearable in 2021, according to a note from Loup Ventures analyst Gene Munster discussing product categories the iPhone producer could pursue, with the rumored 'Apple Glasses' predicted to sell over 10 million units in its first year.

Magic Leap One Lightwear AR headset
Magic Leap One Lightwear AR headset


Apple CEO Tim Cook has already laid some of the groundwork required for augmented reality (AR) to be a major business within Apple, Munster writes, highlighting the release of ARKit, the use of dedicated AR optics in the iPhone X, and the purchase of wearable computer vision technology company SensoMotoric as examples of AR's progression.

Munster acknowledges the mixed feelings of AR's potential by investors "given the two most popular AR use cases today are Snapchat and Pokemon." The failure of Google Glass from 2015 also add to the worry, as well as society's dislike for people to wear cameras and record potentially everything they see.

"We expect Apple's AR theme to play out in three phases," Munster suggests, with the first occurring in the fall iPhone refresh in the form of more iPhones using VCSEL arrays that can help power AR experiences. This will be followed by ARKit apps becoming "the next gold rush for developers" in the fields of gaming, commerce, and education, then the release of "Apple Glasses."

While Munster believes the public isn't ready for AR glasses, he is hopeful that it will become a more popular concept, reasoning, "We're not made to experience the world holding up a tiny window." Adoption of such wearable devices will be minimum "until the utility of an AR wearable offsets the negative social dynamic."

The technology behind AR glasses must also advance where the design of the hardware isn't a negative factor, it is suggested, likening it to the adoption of smart watches, before going mainstream. "In the future, we won't be able to live without an AR wearable, and Apple will be there to sell us one," Munster muses.

Loup Ventures previously expected a release of "Apple Glasses" around September 2020, but pushed the date back to December 2021 after meeting several AR experts. "While these people do not have direct knowledge of Apple's plans, it is becoming clear that, as a category, AR glasses are a few years away."

An ARKit app running on an iPad
An ARKit app running on an iPad


It is estimated that 10 million units of the AR glasses could be sold in the first year of release, with Munster suggesting this could be similar to the Apple Watch's initial performance. Using an anticipated average selling price of $1,300, the fabled headwear could yield $13 billion in the first year, accounting for 3 percent of Apple's full-year revenue in 2022.

Another product category, the Apple Watch, is continuing to grow from Apple CEO Tim Cook's hobby of fitness, with Cook's "personal motivation to improve global health and wellbeing" considered an important factor. Apple Watch, AirPods, software development tools including HealthKit and ResearchKit, and new wearables "and hearables" represent a significant growth driver in the personal health space according to Munster.

Apple Watch, AirPods, and new AR wearables are posited to generate over $71 billion in revenue in the full year 2023, compared to the estimated $12 billion for 2018.

Not all of Munster's note relates to hardware, as he does hint at what he thinks Apple will do with its original content strategy, saying, "We continue to expect Apple to launch a rebranded, all-in-one Apple video and music offering in 2-3 years."

Suggesting Apple will continue to increase its spending on original content by around 50 percent per year, eventually exceeding $4 billion by 2022, Munster believes there will eventually need to be a "new home" for the video content. Despite Apple's current spending on original content currently residing at around $500 million as of 2017 being dwarfed by Netflix's $8 billion spending plan for this year, Munster is confident Apple is committed to competing in the streaming market.

Noting Apple already receives a cut of subscriptions for streaming services initiated on its devices, Munster adds "This one-two punch in content will continue to drive consumers away from cable and satellite TV providers to a combination of over-the-top service providers," with Apple well positioned to benefit both directly and indirectly from the cord cutting shift.

Apple's self driving car sensor array
Apple's self driving car sensor array


Lastly, Munster touches on Apple's autonomous systems, specifically its self-driving car efforts under the "Project Titan" umbrella. The fleet expansion to 55 in California from 27 earlier this year and 3 last year is highlighted, but while Apple's intentions are unknown, the public confirmation of such testing "is noteworthy" and a clear sign the company is taking the industry seriously.

There are two potential paths the research could lead, suggests Munster. The first would involve working with a manufacturer to create an Apple-branded car, and while Apple would have the freedom to design the car and customize the user experience, producing a car is considerably different when compared to creating an iPhone or iPad.

The second option of focusing on software development and licensing it to car manufacturers for use in their vehicles as the "OS of the future for cars" is more likely, in Munster's opinion. "It plays to a number of Apple's strengths including voice, navigation, entertainment, security, and a developer ecosystem."

PAIL (Palo Alto to Infinite Loop) is thought to be the most near-term usage for Project Titan's technology, with the autonomous shuttle system for inter-campus employee transportation likely to provide data in a controlled environment that Apple could use to improve the project further.

"True to form, they'll watch this market emerge and enter when the time is right -- from both a product and a market standpoint," Munster writes.

The note is one of a series written by the longtime analyst, suggesting there is a "new paradigm" for investors where Apple needs to be looked at more as a service provider than as the manufacturer of iPhones and other hardware.
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Comments

  • Reply 1 of 27
    SendMcjakSendMcjak Posts: 66unconfirmed, member
    I would bet my house on two design characteristics of Apple's to-be glasses:

    1. Apple will intentionally de-emphasize any front-facing camera // make it difficult for a casual observer to tell that there even is a front-facing camera (or cameras).
    2. The user will not be able to record using the front-facing camera(s) -- aka: no video or picture capture -- the camera will merely serve as an OS-level input, not a feature onto itself.

    I think Google Glass & SnapChat Spectacles have proven that society is a long ways from accepting face-mounted capture devices as the new norm.
    edited May 17 watto_cobra
  • Reply 2 of 27
    lmasantilmasanti Posts: 57member
    Will Munster's opinions on Apple's glasses have the same fate as Muster's opinion on Apple TV display?
    chabigSpamSandwich
  • Reply 3 of 27
    jony0jony0 Posts: 267member
    lmasanti said:
    Will Munster's opinions on Apple's glasses have the same fate as Muster's opinion on Apple TV display?
    My first thought seeing the headline was to offer my condolences to anybody that was hoping for these products.
    Considering Gene's record, specifically the TV, his prediction here is probably yet another kiss of death.
    chasm
  • Reply 4 of 27
    DAalsethDAalseth Posts: 270member
    The tech industry moves fast. Any prediction three years out is next to worthless. 
    watto_cobra
  • Reply 5 of 27
    SpamSandwichSpamSandwich Posts: 29,902member
    Gene... uh, "predicts" a lot of things.
    StrangeDays
  • Reply 6 of 27
    ceek74ceek74 Posts: 320member
    Why do you keep reporting on this guy?
  • Reply 7 of 27
    Mike WuertheleMike Wuerthele Posts: 3,321administrator
    ceek74 said:
    Why do you keep reporting on this guy?
    Because we get asked to, by readers. The same reason we cover the other analyst's standpoints, good and bad.

    As a reminder, AppleInsider is for everybody, of all skill levels, interests, and content demands. If a piece does not appeal to you for whatever the reason, we're not requiring you to read it.
    edited May 17 king editor the grategatorguyslprescottpatchythepiratecrowleychasm1st
  • Reply 8 of 27
    tallest skiltallest skil Posts: 43,399member
    Munster is actually right. Apple’s releasing both a TV and an AR headset. And here it is.


    SpamSandwichking editor the grateStrangeDayschasm
  • Reply 9 of 27
    SpamSandwichSpamSandwich Posts: 29,902member
    Munster is actually right. Apple’s releasing both a TV and an AR headset. And here it is.


    Awesome!


  • Reply 10 of 27
    sdw2001sdw2001 Posts: 16,899member
    Rank speculation 
    SpamSandwich
  • Reply 11 of 27
    SpamSandwichSpamSandwich Posts: 29,902member
    sdw2001 said:
    Rank speculation 
    Not to mention "completely stupid".
  • Reply 12 of 27
    I would say many already don't need them anymore. They already see augmented reality and cannot live normal life without delusions.
    tallest skil
  • Reply 13 of 27
    maestro64maestro64 Posts: 4,270member
    lmasanti said:
    Will Munster's opinions on Apple's glasses have the same fate as Muster's opinion on Apple TV display?

    ah you beat me, I was going to say he will be as right on this topic as he was on the full scale TV prediction
  • Reply 14 of 27
    nunzynunzy Posts: 662member
     go go home Gene,  you're drunk
    SpamSandwich
  • Reply 15 of 27
    jungmarkjungmark Posts: 6,548member
    Nonsense. How are you doing to predict the sales of a non existent product with non existent features at a non existent price?
  • Reply 16 of 27
    bestkeptsecretbestkeptsecret Posts: 2,944member
    lmasanti said:
    Will Munster's opinions on Apple's glasses have the same fate as Muster's opinion on Apple TV display?

    I'm pretty sure Apple changed tact on the Apple TV from a full TV to a box just to spite Munster. /s
  • Reply 17 of 27
    mattinozmattinoz Posts: 899member
    Still one fundamental problem the eyeware market is about $1bill a year world wide almost a 1/3 contact lens and not sure how much is pure upsell for people wanting to looks as good as possible when wearing glasses. Probably 90% of that.

    The marketing is going to have be very impressive to have people willing look as bad as the AR set in the render.
  • Reply 18 of 27
    Why does anyone listen to Munster? He was always predicting a full size AppleTV for years and that certainly hasn't happened. Long-term predictions are nearly impossible to get right. All he wants is attention.
  • Reply 19 of 27
    volcanvolcan Posts: 1,713member
    I don't see many real world practical uses for augmented reality. VR on the other hand could be quite useful for education and training.
  • Reply 20 of 27
    gatorguygatorguy Posts: 19,284member
    volcan said:
    I don't see many real world practical uses for augmented reality. VR on the other hand could be quite useful for education and training.
    Construction, electronics repair, assembly, equipment diagnostics, medical examinations... 
    Those are all current uses of augmented reality headgear (Yes Google Glass is being used today in enterprise, and there are other competing systems too). VR on the other hand has found little use outside of gaming hasn't it?

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