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Apple’s VR headset is its most important product in years
Apple (AAPL) will host its annual WWDC developer conference on June 6 live from its headquarters in Cupertino, California.
While there will certainly be plenty of announcements and demos, including our first looks at iOS 16, watchOS 9 and the latest version of macOS, the most awaited product may not even appear: Apple’s virtual and augmented reality platform.
Reportedly called RealityOS for the Reality operating system, the software would form the basis of Apple’s future VR and AR plans, not to mention giving developers the ability to start developing apps for the platform.
Apple has a lot going on with its VR and AR products. The platform would be the company’s first major launch since the launch of the Apple Watch in 2015 and the entry into Silicon Valley’s newest obsession: the Metaverse. More importantly, Apple could finally have the iPhone successor it’s been chasing for years.
But if the headset and accompanying software are a flop, it would deal a serious blow to a broader VR industry, which Apple sees as a catalyst for bringing the technology into the mainstream.
“AR needs Apple to be successful,” Gene Munster, managing partner at Loup Ventures, told Yahoo Finance.
“That would be a missed opportunity because I think there’s a lot to be unlocked with AR in the longer term. But the risk is there [Apple] Misfires and the industry just doesn’t take off.”
Apple’s realityOS is the next big interface
There’s no guarantee that Apple will showcase realityOS at WWDC, but if the software or hardware will debut this year, there’s no better place than Apple’s largest showcase.
On Saturday, Vox’s Parker Ortolani spotted a trademark application for Apple’s putative AR and VR operating system: realityOS. And while it wasn’t registered with Apple, there’s a chance the company it’s registered with is Realityo Systems LLC, a shell company for the iPhone maker. Big companies often use corporations to hide their more secret products.
Apple isn’t the only company investing money in AR/VR and the Metaverse. Facebook parent company Meta (FB) spent more than $10 billion on its own AR and VR efforts in 2021 alone. The social networking giant hopes that by building its own hardware and software for the metaverse, it will no longer have to conform to Apple’s App Store rules.
“It’s a big deal,” Munster said. “That’s why Facebook spends so much money on reality labs, because they know what’s at stake. It’s the next operating system. It’s the next interface and they don’t want to be held accountable to Apple.”
While Apple is clearly working on a headset of its own, it’s still unclear exactly how the company will market its device. However, according to Tuong Nguyen, senior principal analyst at Gartner, Apple’s headset will be more of a purpose-built device than an all-in-one product.
Consider how the Apple Watch does a few things well, like tracking your workouts and typing text messages, while the iPhone does, well, everything. Regardless of how Apple markets its headset and software, a solid launch will be paramount to ensuring Apple’s AR and VR efforts don’t completely fizzle out.
“You only get one chance to get this right out of the gates and Cupertino is focused on this important product initiative,” Wedbush analyst Dan Ives told Yahoo Finance. “There’s a lot of complexity to this next Apple launch, which it ultimately will be [10 million to 15 million] Units likely at initial launch.”
The industry relies on Apple
Whether we get Apple’s AR/VR headset at WWDC or sometime next year, the broader industry is counting on the success of Apple’s offering.
“You won’t want to admit that, but [Apple has] I have to do the heavy lifting to make the industry work,” Munster said.
According to research firm IDC, the global market for AR and VR headsets grew 92.1% year-on-year to 11.2 million units in 2021.
However, that number is nothing compared to the global smartwatch market, which shipped 40 million units in the fourth quarter of 2021 alone, according to Counterpoint Research.
However, an Apple-branded headset could boost broader industry sales. Need proof? Look no further than the impact Apple’s presence has had on sales of smartphones, smartwatches, and wireless earbuds.
As it stands, the AR and VR industries, let alone the Metaverse, are a far cry from the massive successes that investors and manufacturers have been talking about in product demos and presentations.
Even Marc Petit, VP of Epic Games and general manager of Unreal Engine, told Yahoo Finance that consumers have already lost interest in the Metaverse. Munster, meanwhile, says consumers want nothing to do with the technology as it currently exists.
Apple and its army of loyal developers could change that by offering truly impressive use cases for AR/VR headsets that go beyond playing a handful of games or watching movies on a 100-foot artificial screen.
If the AR/VR and Metaverse industries are ever to realize their potential, Apple will need its headset and software to be a hit. And if the headset fails, the Metaverse can end up being just an unfulfilled promise.
Through Daniel Howley, technical writer at Yahoo Finance. follow him @DanielHowley
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