Apple's headset will need killer apps & services to be successful
As Apple reportedly prepares to announce a mixed-reality headset at WWDC, analysts predict that the high cost and reliance on immersive apps and ecosystem integration will be key factors for its success.
An Apple headset may launch in 2023
With Apple's WWDC event drawing near, there is great excitement regarding the upcoming revelation of Apple's mixed-reality headset. Speculations suggest that the announcement will take place during the event, and the headset is projected to become available in the latter part of 2023.
In a note to investors seen by AppleInsider, analysts at TD Cowen believe introducing the mixed-reality headset is merely the initial step, as they predict that Apple will launch a virtual reality-focused headset in 2024. Their forecast also echoes other reports, saying that the cost of the MR headset could be between $2,000 to $3,000.
That high cost is due to the display and optical components, which could take up as much as 60% of the total hardware cost. That's followed by sensors at approximately 15% and semiconductors at around 8%.
Apple relies on high-quality micro OLED display panels, pancake lens optics, and 8-10 front-facing 4K camera sensors to differentiate features from competing headsets. Additionally, the research suggests that suppliers involved in the production of the headset include Sony for the display, TSMC for the display and SoC processor, LG Innotek for the ToF sensor, Pegatron for assembly, and Hon Hai for mechanical components.
But for the headset to be successful, it needs killer apps and integration into Apple's software and services ecosystem. TD Cowen suggests that the growth of the headset could be propelled by various app categories, such as health and fitness apps, as well as the lifestyle category encompassing kids and family, social networking, shopping, and tourism.
Apple holds a competitive edge in XR platform content creation due to the vast number of approximately 34 million iOS developers worldwide. As a result, discovering content through the App Store will be crucial for users adopting the headset.
Furthermore, Apple has an opportunity to address the existing gap in the XR/VR ecosystem by providing immersive XR content for subscription services like Music, TV+, and Fitness+. The company's digital payment platforms, including Apple Pay, Apple Card, Apple Cash, and Apple Pay Later, could also play a pivotal role in facilitating monetization across virtual worlds and platforms that are not limited to a specific operating system.
As part of the report, Cowen maintains its "Outperform" rating for AAPL stock and a price target of $195.
Read on AppleInsider
An Apple headset may launch in 2023
With Apple's WWDC event drawing near, there is great excitement regarding the upcoming revelation of Apple's mixed-reality headset. Speculations suggest that the announcement will take place during the event, and the headset is projected to become available in the latter part of 2023.
In a note to investors seen by AppleInsider, analysts at TD Cowen believe introducing the mixed-reality headset is merely the initial step, as they predict that Apple will launch a virtual reality-focused headset in 2024. Their forecast also echoes other reports, saying that the cost of the MR headset could be between $2,000 to $3,000.
That high cost is due to the display and optical components, which could take up as much as 60% of the total hardware cost. That's followed by sensors at approximately 15% and semiconductors at around 8%.
Apple relies on high-quality micro OLED display panels, pancake lens optics, and 8-10 front-facing 4K camera sensors to differentiate features from competing headsets. Additionally, the research suggests that suppliers involved in the production of the headset include Sony for the display, TSMC for the display and SoC processor, LG Innotek for the ToF sensor, Pegatron for assembly, and Hon Hai for mechanical components.
But for the headset to be successful, it needs killer apps and integration into Apple's software and services ecosystem. TD Cowen suggests that the growth of the headset could be propelled by various app categories, such as health and fitness apps, as well as the lifestyle category encompassing kids and family, social networking, shopping, and tourism.
Apple holds a competitive edge in XR platform content creation due to the vast number of approximately 34 million iOS developers worldwide. As a result, discovering content through the App Store will be crucial for users adopting the headset.
Furthermore, Apple has an opportunity to address the existing gap in the XR/VR ecosystem by providing immersive XR content for subscription services like Music, TV+, and Fitness+. The company's digital payment platforms, including Apple Pay, Apple Card, Apple Cash, and Apple Pay Later, could also play a pivotal role in facilitating monetization across virtual worlds and platforms that are not limited to a specific operating system.
As part of the report, Cowen maintains its "Outperform" rating for AAPL stock and a price target of $195.
Read on AppleInsider
Comments
A headset has the same "chicken or egg" problem that AR applications face with the iPhone. There are tons of use cases for AR - but developers are not creating apps for them because the only way to utilize the apps is by using your iPhone as your AR glasses. Nobody will hold up their iPhone for any period of time just to see an augmented reality. Same thing with this headset: even if it has AR capability, nobody will wear a headset in public! So developers would be writing app for a market - customers with AR glasses - that won't exist for years.
I would implore you to consider how you may see a given concept in a new light if you had been working on it for a decade along with teams of people numbering in the thousands. Additionally, I'd have you look at Apple's long history of being successful with products that people such as yourself said were foolish for them to consider.
Personally, I have no current need for a VR or mixed reality goggles, but my concept of their use is currently still well within what has been available so far. My inability to see how a new product may offer an experience that works for me is my shortcoming, not Apple's... but at least I see that limitation in myself, which is why I'm waiting for an announcement and demo before I determine how much (if anything) I'm willing to pay for a new product category from Apple.
An entry in the Captain Obvious category, if you ask me.
Myself, I can imagine the first-gen product is going to be for enthusiasts as the platform builds up steam, much like the iPod, iPhone, iPad, and Watch -- none of which sprang out of the clam shell fully-formed and rooted as a success. They built momentum. The first-gen headset will surely be the worst one Apple ever makes, but since I'm an enthusiast I can imagine giving it a whirl. Over time it will be democratized, just as those other platforms were.
The plethora of VR products on the market seem to indicate there isn't a killer app to drive mass market adoption. Even with games where you'd think they'd be really good at, there are a user interface issues that make playing FPS games difficult, and any computer game or application that makes the user sweat is not good either. There are games that VR is good at, they just aren't the type of games that make enough money to drive investment in the market. Immersive video experiences are probably still waiting on content that is truly optimized for it, but seems stuck in a chicken or the egg situation.
If it is a true-blue mixed reality device, than users can wear it while working, while driving, while walking, while cooking, what have you. Augmented humans. This market is big. Just not sure how Apple is going to accomplish it. It looks like they are going to have cameras that feed video into the OLED displays inside, so you can walk around with them on. If they have this working where it is indistinguishable from looking through goggles, well, it will really make the vision of an "augmented" human possible, and there is a big market for this. It's going to be clunky with the first few models, but it's a big market, something like sunglasses, eventually.
1) $3000 is "of course I will buy it".
The simple use case of using it for virtual monitors is a wash. If it seems like a couple of Apple studio displays, you're coming out ahead.
If it seems like a Pro Display, XDR, maybe not so likely, you're way ahead. I will probably get the new Mac Mini M2 Pro to pair it with. (unless they announce a better computer at WWDC)
2) "analysts at TD Cowen believe introducing the mixed-reality headset is merely the initial step, as they predict that Apple will launch a virtual reality-focused headset in 2024"
These guys are just wrong. The number one thing will be mixed reality. They are stuck on "they have a hammer so everything is a nail."
3) Another article I read, asking a person about the Apple headset with a person at a VR firm. Every other sentence was VR this and VR that. VR, VR, VR.
They are going to get stomped. All capitals.
4) My wife had surgery a couple of days ago. I'm sitting there watching the nurses shove around paperwork, typing stuff into the monitor that was in the room. It looked so primitive. One had to pull out a calculator to determine the rate for the saline drip. That is all going to go away within 10 years.
https://gamerant.com/top-selling-vr-games-according-steam/
https://www.spglobal.com/marketintelligence/en/news-insights/blog/top-10-vr-games-by-revenue
https://www.neogaf.com/threads/the-current-best-selling-vr-games-of-all-time-thread-updated.1653465/
The top ones include Beat Saber:
https://www.pcgamer.com/beat-saber-slashes-vr-sales-records-after-shipping-4-million-copies/
That's a game that can be used for fitness and could easily get long-term use. However, the charts show VR usage to be quite low and is something that Meta/Facebook mentioned in recent years. Millions of headsets have been sold but they aren't getting used much.
https://mixed-news.com/en/one-in-four-u-s-teens-owns-a-vr-headset-but-barely-uses-it/
https://steamcharts.com/app/620980#All (Beat Saber VR)
https://steamcharts.com/app/546560#All (Half-Life Alyx VR)
They are about 1/20th the usage of popular non-VR games:
https://steamcharts.com/app/1245620 (Elden Ring)
https://steamcharts.com/app/1091500#All (Cyberpunk 2077)
https://steamcharts.com/app/990080#All (Hogwarts Legacy)
The only VR software that comes close to that usage is VRChat, this seems like a mix of Roblox, Second Life and social video apps:
https://store.steampowered.com/app/438100/VRChat/
https://steamcharts.com/app/438100#All
https://store.steampowered.com/charts/mostplayed (46th)
From what Apple has said in the past, they want to focus more on AR than VR. An AR game would look like this:
Movies are a popular use for AR glasses because you get a wall-sized display. It's similar to having a 100"+ projector screen but OLED and 3D and one you can take anywhere:
Does movies + fitness + gaming + virtual displays + in-person chat justify a $3k price? No, but that price is made up. Does it justify a $1500 price tag? Maybe. $700? definitely.
Fitness+, together with the coach - perhaps they already filmed their exercises in VR?
Travel the world for the movement impaired.
I think the killer app, to get this thing going had better be good. Solitaire in Windows 3 just kept people looking at Windows, and is easy to learn, fun to play, and the bouncing cards was the "win". These glasses need something like that, just to keep people playing it "one more time".