Two more reports have arrived stating that Apple (AAPL) is working on an augmented reality headset - but these two differ from some prior reports in a couple of key respects.
The Information reported on Monday morning that Apple aims to launch a headset featuring "a hybrid of AR and VR capabilities" in 2022, along with "a sleeker pair of AR glasses" in 2023. The report cites Apple employees who saw a presentation led by Apple AR/VR exec Mike Rockwell.
Later on Monday, Bloomberg reported that Apple plans to launch "a combined VR and AR headset with a focus on gaming, watching video and virtual meetings" in either 2021 or 2022, along with "a lightweight pair of AR glasses as early as 2023." It adds that Apple "had originally intended to have the technology for its initial headset ready in 2019 for a release in 2020, but recently decided to push that back."
(As an aside, Bloomberg also stated that Apple will launch iPad Pros in the first half of 2020 featuring a 3D rear-camera system that allows users to "create three-dimensional reconstructions of rooms, objects and people," and later include the technology within its 2020 high-end iPhones.)
Bloomberg previously indicated Apple wanted to launch an AR headset in 2020, as did CNET and Apple analyst Ming-Chi Kuo.
Given how much mass-market AR glasses are likely to lean on smartphone pairing, Apple and Alphabet/Google (GOOGL) might (as owners of the world's dominant smartphone platforms) be best-positioned over the long-term to commercialize mainstream AR platforms. Here are some initial thoughts on the new Apple headset reports.
1. Apple Wants to Be a Player in Augmented and Virtual Reality
Though Tim Cook has said that he thinks AR will be a bigger market than VR over the long-term, and though many past reports about Apple's AR headset efforts haven't said anything about VR (CNET's is a notable exception), both The Information and Bloomberg's Monday reports signal that Apple also has a strong interest in VR.
VR is of course a field where Facebook (FB) , HTC, Sony (SNE) and others have already launched consumer headsets. Relative to smartphones or even tablets, VR headset sales volumes have been limited to date, with issues such as display quality and VR's immersive nature (users tend to be completely shut off from their external environment) limiting adoption.
The Information states that Apple's planned hybrid AR/VR headset resembles Facebook's Oculus Quest standalone VR headset, but "has a sleeker design." It adds that the headset will (unlike most present-day VR headsets) let wearers see their physical surroundings via mounted cameras, and will feature "a high-resolution display that will allow users to read small type and see other people standing in front of and behind virtual objects."
Bloomberg indicates Apple is working on a common operating system (known as rOS) for both AR and VR. It also states that the 3D camera tech set to go into 2020 iPhones and iPads will also be used by Apple headsets.
2. Apple Appears to Be Paying a Lot of Attention to Getting the Details Right
By itself, the fact that the ETA for Apple's first headset launch has been pushed back by a year or two says something about its reluctance to launch a product until the user experience it delivers meets the company's traditional standards. But so do a few other details.
The Information's report suggests that Apple is putting a lot of thought into addressing existing VR pain points in areas such as display quality and seclusion from one's physical environment, as well as user comfort (Apple reportedly wants to "make heavy use of fabrics and lightweight materials to ensure [its AR/VR headset] is comfortable to wear for extended periods of time.").
With regards to the AR glasses, Apple is reportedly working on making them comfortable enough to be worn all day, and - in a move that could make their use less socially awkward - is also exploring "the use of lenses for the glasses that darken when people are using AR on them, a way of letting others know the wearer of the glasses is distracted."
Also: Apple is reportedly looking to reach out to developers "as early as 2021," to help build an app ecosystem for its headsets.
3. The Sheer Number of People Involved with (and Briefed About) the Projects Says a Lot
The Information says that the presentation where Apple workers were briefed about the company's headset efforts "was attended by enough employees to fill the 1,000-seat Steve Jobs Theater." It adds that Apple already had hundreds of people working on its AR/VR headset, as well as dozens working on its AR glasses, as of the end of 2018.
Bloomberg says that Apple "has about 1,000 engineers working on [its] AR and VR initiative." The group is said to include veteran Apple hardware and software engineers, as well as "ex-NASA engineers, former game developers and graphics experts."
Assuming these numbers are right, they signal that Apple is taking its AR and VR hardware efforts quite seriously. They also suggest that - for a company that tends to be quite secretive about new hardware projects - Apple sees the effort as being important enough to risk some news leaks in the name of keeping a massive engineering group up to speed about its long-term plans.
Apple, Alphabet and Facebook are holdings in Jim Cramer's Action Alerts PLUS member club.
