Apple Vision Pro is driving VR use from games to healthcare and productivity
Despite low sales, the Apple Vision Pro is reportedly shaking up the VR/MR industry and moving the trend of headsets from entertainment to productivity and innovation.
Apple Vision Pro
The global VR and MR headset market is expected to grow steadily in 2024, with shipments projected to reach 9.6 million units, an 8.8% increase year-over-year, according to a new report by TrendForce. Apple Vision Pro, despite moderate growth, is setting new standards.
Launched in 2024, Apple Vision Pro has already claimed 5% of the market, a significant achievement given its high price. Starting at $3,499, the Vision Pro is not positioned as a mass-market device but rather as a high-end product aimed at professionals and early adopters.
In comparison, Meta dominates with a 73% market share, largely thanks to its affordable Quest 3S, which retails for just $299.
Sony's PS VR2 claimed the second-largest market share in 2024, holding 9% of the VR/MR market. To expand its reach, the company attempted to integrate the headset with PC platforms using adapters.
However, the PS VR2's performance has been limited by a lack of functionality and apps. As a result, Sony's annual shipments saw a 25% year-over-year decline.
Headset technology
One of Vision Pro's most notable features is its OLEDoS (OLED on Silicon) display, a technology that provides exceptional visual quality, clarity, and precision for near-eye experiences. Unlike traditional LCD-based displays found in most headsets, OLEDoS offers higher resolutions, richer colors, and deeper blacks.
Market share of VR headsets. Image credit: Trendforce
However, the use of OLEDoS also contributes to the headset's steep price. To expand its market reach, Apple will have to adopt alternative display technologies in the future.
TrendForce suggests that by 2026, Apple could release a successor to the high-end version and a more affordable mainstream model.
Real-world usage
Since its February 2024 launch, the Apple Vision Pro has quickly found its way into operating rooms in the US and worldwide. Surgeons are already exploring its potential, including Santiago Horgan, a pioneer in robotically assisted gastric-bypass surgery.
Horgan, who leads the Center for the Future of Surgery at UC San Diego, has become a strong advocate for the Vision Pro's value to both patients and surgeons. In an interview, he compared its impact to the robot tool he first used in 2000, describing it as a similarly transformative technology.
"This is the same level of revolution," Horgan explained, "but will impact more lives because of the access to it." His statement reflects the Vision Pro's ability to democratize advanced tools by offering intuitive, high-quality solutions in surgical settings.
And in Brazil, Dr. Bruno Gobbato used Vision Pro during a shoulder arthroscopy to access patient exams and 3D models in real time, enhancing surgical precision. He previously used HoloLens but found Vision Pro's superior camera resolution and handling of bright surgical lights to be a significant advancement.
Surgeons have been early adopters of the Apple Vision Pro because its high-resolution display provides exceptional clarity for patient data and imaging, crucial during complex procedures. At $3,499, it's more affordable than traditional surgical monitors, which can cost up to $30,000. And its ergonomic design and real-time data access may improve precision and reducing physical strain during operations.
At the University of California, San Diego, surgeons have integrated the headset into over 20 minimally invasive procedures. Christopher Longhurst, Chief Clinical and Innovation Officer at UC San Diego Health, noted that the device's cost is minimal compared to traditional surgical monitors.
"So $3,500 for a headset is like budget dust in the healthcare setting," Dr. Longhurst said.
While most VR headsets have been focused on gaming and entertainment, Apple positions Vision Pro as a multi-functional tool. Beyond consuming content, users can work on documents, hold virtual meetings, and participate in specialized apps in healthcare and education.
Read on AppleInsider
Comments
Would be curious to see Apple's margins for the AVP.
https://investor.fb.com/financials/
https://s21.q4cdn.com/399680738/files/doc_financials/2024/q3/Meta-09-30-2024-Exhibit-99-1_FINAL.pdf
Reality Labs
Q4 23 = $1b, $4.6b loss
Q1 24 = $0.4b, $3.8b loss
Q2 24 = $0.3b, $4.4b loss
Q3 24 = $0.3b, $4.4b loss
Roughly $2b revenue over those 12 months with a $17b loss.
This suggests around 5m units at $400 ASP.
Their revenue hasn't changed much between 2021-2024, losses are growing, over $50b total:
2021 = $2.2b, $10.1b loss
2022 = $2.1b, $13.7b loss
2023 = $1.9b, $16.1b loss
Zuckerberg says they sell hardware close to break-even or at a slight loss and aim to make money on software and services:
https://www.businessinsider.com/mark-zuckerberg-said-apple-charges-as-much-as-can-hardware-2022-10
https://www.macrumors.com/2022/10/13/zuckerberg-apple-charges-as-much-as-it-can/
They'd need to scale to 100m users and be able to generate around $100 per user in a year as well as halve their losses for it to be profitable. It's probably going to be a while before this happens but it looks like it's one of Zuckerberg's passion projects so I expect he will keep investing in it until there's neural interface AR.
Apple will probably keep investing in it too but they won't throw $50b+ away in the process.
I think I'd take your number of lower unit sales. 5m. Maybe 4m? They have accessory sales, and software/service sales too. So, the unit numbers for Quest headsets per year would be less than perceived.
Yeah, Facebook's business model of developing a sticky service and monetizing with ads is a tough one to beat. Just have to wait and see how big the losses get. I was thinking funding for GenAI development at Meta is going to take a healthy chunk of change. There's going to be competition between the two for funding at Meta, and I think GenAI funding will take priority for a few years.
That alone makes me want the current version instead of settling for a cheaper version with lesser visual tech or features down the road. Maybe Apple will develop alternate tech that is cheaper and just as good or better than OLEDoS. I'm not confident that will be the case. I'm not against a "good enough" version for those who want it. But amazing video is why I'm looking at the AVP in the first place.
Zuck has the resources to sell the Quest at a loss. He makes it up in volume.
I doubt that any retailer would sell it as a loss leader, because "the money is in the software". They'd have to move a lot of accessories and software to make up selling the Quest on the cheap.
Apple VisionOS and Apple Silicon M4/M5/R2 SOC’S will be at an even higher level and be even more power efficient.
This makes me sad, given that 60% of bankruptcies in the U.S. are significantly related to medical expenses.
You clearly missed the sarcasm. I guess /s is necessary.
There are obviously people who knew on Day 1 or even prior that the AVP would be a great fit for things they were trying to do. They recognized the value immediately and through peer to peer networking. Now that specialized apps for the AVP are rolling out the AVP is attracting the attention of more prospective buyers. But it’s still not mainstream. At some point, which may include the release of a lower cost of entry option, more buyers will start looking more closely at the AVP. Hopefully the third party developers will start to get onboard in greater numbers, the number of AVP optimized applications will increase, including more directly from Apple and its closer partners, and sales will start to ramp up. By that time Apple and third parties should have a lot more experience under their belt to handle the increase in demand.
Of course, that’s a “Happy Path” perspective. It could go in another direction. However, I’m still betting on Apple to grow AVP sales volume and user uptake over time. It’s just a matter of how steep the growth/adoption curve will be. Still too early to tell because it’s still, in my opinion, in the Early Adoption phase.