In terms of engineering, software and product design, I think there's a lot to like about Apple's (AAPL) Vision Pro headset -- and many of those who have tried out the device seem to agree.
But for a few different reasons, we might be at least one or two product generations away from mixed-reality headsets being a true mass-market product for a company of Apple's size.
Here are a few thoughts on the Vision Pro, which Apple plans to begin selling at some point in early 2024 at a starting price of $3,499.
1. Apple's Top-Notch Hardware Engineering Shines Through Again
Getting a dozen cameras, five sensors, quality speakers, a pair of processors -- the M2 system-on-chip (SoC), which can be found in Macs, and an image/sensor-processing SoC known as the R1 -- high-end optics, and a pair of micro-OLED displays with a combined 23 million pixels (nearly three times that of a 4K display) into a device that looks like a pair of ski goggles and is reported to be comfortable to wear is no mean feat.
Beyond the impressive specs, first-hand accounts of things such as highly immersive 2D and 3D visuals that surpass what existing consumer headsets deliver, high-precision eye-tracking that quickly zeroes in on whatever part of the screen a user is looking at, and low-latency passthrough video that lets users see their external surroundings much as they would with their own eyes, as well as a general lack of complaints about eye strain and motion sickness (common issues with other VR headsets), speak to the quality of Apple's engineering work.
The Vision Pro packs a ton of high-end components in a small form factor. Source: Apple.
2. The Software and User-Interface Work Also Look Impressive
Much as it did with its first smartphone, tablet and smartwatch, Apple seems to have taken a first-principles approach to developing the software and user interface for its first mixed-reality headset, building a platform from the ground up that fit its vision of what a headset should be like rather than heavily relying on approaches taken by existing platforms.
This can be seen in how Apple eschewed handheld controllers such as those used by Meta Platforms' (META) Quest headsets in favor of an interface relying mostly on hand gestures, eye-tracking and voice commands. It can also be seen in the pains Apple took -- through an interface that overlays app windows over a user's real-world surroundings, with users able to quickly adjust where those windows are placed and how much space they take up -- to keep users feeling engaged with their surroundings in a way that current headsets generally fail to.
And it can be seen in how -- aided by high-resolution displays, a wide field-of-view, a notebook-class processor and the ability to work with Bluetooth keyboards/trackpads -- Apple isn't pitching the Vision Pro as merely a home entertainment and gaming device, but also as a productivity device that could act as a substitute for a multi-monitor workstation.
The Vision Pro is being pitched as a workstation replacement. Source: Apple.
3. The Price and the Battery Need to Be Improved
Needless to say, a $3,499 starting price puts the Vision Pro out of the reach of a large percentage of would-be buyers. Even if one narrows the headset's addressable market to affluent tech enthusiasts and professionals, I think a $2,000-or-lower price point will need to be reached for a mass-market to form.
Battery life -- currently rated at just two hours -- also needs to improve. And though it's understandable that Apple wasn't able to do this just yet, given how powerful of a device the Vision Pro is, integrating the battery within the headset (rather than housing it in an external battery pack, as is the case now) would be a welcome improvement.
4. Selling Consumers on Mixed-Reality Headsets Is Likely to Be a Long-Term Process
Though VR has been hyped as the next big thing for about a decade now, it's still (relative to PCs, tablets and especially smartphones) very much a niche market in terms of unit sales. Research firm IDC estimates just 8.8 million AR and VR headsets were sold last year, down 20.9% annually and equal to less than 1% of global smartphone sales.
What's more, a large portion of the VR and mixed-reality headsets that have been sold appear to be collecting dust. Though Meta had reportedly sold nearly 20 million Quest headsets over the years as of February, there were reportedly just 6.37 million monthly active Quest users as of October 2022 (daily active users are presumably even lower).
Clearly, only a tiny percentage of consumers remain eager to engage with VR/mixed-reality headsets on a daily basis the way they engage with their phones, PCs and TVs. And though Apple's headset stands out from the crowd, both in terms of what it can do and how it feels less isolating, winning over a critical mass of consumers probably won't happen overnight, especially given the first-gen Vision Pro's cost.
It's worth noting here that Apple has also reportedly been working on lightweight augmented-reality glasses that would pair with iPhones and be wearable both indoors and outdoors. If Apple gets the details right, it could be easier for such a product to become a mass-market hit than is the case for a mixed-reality headset. However, Bloomberg reported in January that Apple has "indefinitely" postponed the launch of its first AR glasses due to technical challenges.
5. The 'Pro' Name Suggests a Cheaper Headset Will Eventually Arrive
Across the iPhone, iPad and Mac, Apple's Pro devices are complemented by cheaper, non-Pro devices, and one has to assume the same will eventually apply for its Vision headsets. Especially since there were multiple media reports in January stating that Apple is working on a cheaper AR/VR headset.
One possibility: Apple eventually launches a non-Pro headset whose displays and processor aren't as good as those of the Pro model (thus making the device a less-compelling workstation replacement), but which can still deliver decent entertainment and gaming experiences.
6. If Headset Sales Eventually Take Off, It Will Be a Boon for Chip Suppliers
Between its processors, sensors, memory, storage and communications chips (among other parts), there's clearly quite a lot of silicon packed within the Vision Pro. That said, volumes will probably be too low to move the needle for most chip suppliers during the next couple of years.
Should that change down the line, or should there be a broader surge in VR/mixed-reality headset sales, Taiwan Semiconductor (TSM) , which is the likely manufacturer of the M2, the R1 and a slew of other chips going inside the Vision Pro, would benefit. So would image-sensor suppliers such as Sony (SONY) , given how many cameras are packed into the Vision Pro and some other headsets.
Other likely winners would include audio chip supplier Cirrus Logic (CRUS) , sensor component supplier Coherent (COHR) , and OLED materials and patent-licensing firm Universal Display (OLED) .
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