Apple in need of a reality check on its Reality headset

company’s alleged plan to enter the AR/VR market seems deeply flawed and bound to fail, here are the reasons why

The Apple Reality AR/VR headset’s unveiling may be just three months away, but does the company’s plan for it match its ambition or future importance? (Image: Apple Insider, YouTube)

It’s no secret that Apple will have to expand to more product categories if it means to continue being profitable deep into the future: the iPhone, services and the occasional success in the personal computer market are not enough to sustain its growth for ever. What Steve Jobs would have done at this point in the company’s history — if he were still with us — is anyone’s guess, but what Tim Cook and his lieutenants apparently deem wise to do is enter the AR/VR space by releasing Apple’s first such product in 2023.

The problem: they’re doing it wrong.

Bloomberg’s Mark Gurman, who’s been following the Reality Line Saga at Apple for some time, now seems certain — judging from his latest newsletter — that the company will be launching its first such product during WWDC in June. As other Apple sources have also indicated, he seems sure that this AR/VR product will be technologically advanced but extremely expensive, priced at $3000 (!), higher than any other consumer virtual reality hardware and firmly outside the grasp of most people.

The first Apple AR/VR device is expected to be called Reality Pro and be fairly advanced compared to what’s available in the consumer market right now. (Image: Apple Insider, YouTube)

The rationale behind this choice seems to be that the upcoming Reality model is basically aimed at developers: since Apple’s own apps for it probably won’t be enough to make it a must-buy at first, it will need help from third-party developers in order to build a library that would justify such a purchase at some point down the line. So they are supposed to buy it in enough numbers as to make sense for Apple to build the thing, then develop apps for it that will excite consumers into buying a more affordable Reality model later on.

A cautionary tale if there ever was one: Microsoft’s HoloLens

Does this ring any bells? It does, actually. It is the same approach Microsoft followed with the HoloLens and HoloLens 2 — also that company’s first products in the AR/VR space — from 2016 to 2021. Those looked capable, certainly futuristic and, despite a number of initial problems, they were improved through software just enough so as to make their case to enterprise customers eventually.

In many ways Microsoft’s Hololens was ahead of its time. Because of the way it was handled, though, it never had a chance of succeeding. It failed miserably and is now practically abandoned. (Image: Microsoft)

What Microsoft found out the hard way, though, was that by making both headsets available to developers only, both products ended up being painfully slow to evolve, while offering hardly anyone the incentive to create apps for them. Pitching the HoloLens 2 as a next-generation interface to enterprises failed too: high platform and software implementation costs were hard to justify. After winning a lucrative contract with the US Army in 2021, Microsoft focused on military simulation use cases but those did not seem enough to sustain the HoloLens project — especially in the long term — all by themselves.

When it laid off more than 10.000 employees worldwide last month, Microsoft practically dissolved almost every Mixed Reality team working on AR/VR software or tools, signaling its lack of faith in “the Metaverse business”. It seems that it will be a long while before the Redmond giant heavily invests in this space again.

Not an Apples-to-Apples comparison, the same flawed logic

This is what Apple may be walking into. Releasing an extremely expensive AR/VR headset in very small numbers, intended just for developers, is a recipe for disaster. Yes, the Cupertino giant will get to present its vision for the future to the world. Yes, it will probably impress at first. Yes, it will be the talk of the Web for a while. And… yes, Apple is not Microsoft: there are more developers fiercely loyal to the former’s ecosystem than the latter’s, so chances are that more apps — more creative ones at that — will be built for the former’s device. What’s more, Apple may find a few interesting ways of combining the use of this Reality device with iPhones, iPads and Macs.

It might not seem like an… apples-to-apples comparison, then, but the flaw in Apple’s logic is the same: Tim Cook and his executives just assume they can manipulate — or, at the very least, guide — consumer interest as they see fit. They believe that they can get a desirable product to market, keep its price intentionally high so that very few consumers (if any) end up buying it… and then just work on its software and services out in the open, for God knows how long, before Apple is finally ready to offer a Reality product people can actually afford (along with a wide range of apps people will feel they actually need to use).

If Apple’s plan involves “beta-launching” a product like the Reality Pro, its chances of succeeding are — historically speaking — slim to none. (Image: Apple Insider, YouTube)

It’s an unreasonably tall order. It’s also a plan that’s making a few other assumptions. Who’s to say that the media will play along for however long it takes Apple to build an AR/VR ecosystem and populate a Reality app store? That they won’t just lose interest, like they did with the HoloLens? Who’s to say that when an affordable Reality product does appear, its key apps will be tested enough, polished enough, desirable enough? Who’s to say that, by the time Apple gets around to offering that affordable Reality model, consumers will still be fascinated by augmented reality and virtual reality, for that matter?

While on the subject of consumer disinterest in AR or VR, it’s worth pointing out that — in a sense — it’s already happening. Back in 2016 or 2017 augmented and virtual reality were still seen as interesting new fields in the tech world, untested but promising. Fast forward a few years and things seem to have not played out the way it was expected they would. Not only are most companies and techies now disenchanted with the notion of the Metaverse, but — even worse — mainstream consumers seem to either have had no interest in it to begin with or lost patience with the whole VR thing at some point along the way. Is this the climate in which any company, even Apple, can hope to “beta-launch” an AR/VR product and ask for more time before it can offer something at consumer-level prices?

If Apple wants a second iPhone story, it will have to pay for it

Taking all of the above into account, it’s quite clear that — no matter how Apple decides to play this — launching an AR/VR product in 2023 will prove to be a quite the challenge. What the company can do, though, is accept it for the challenge it is and go all in instead of making that half-hearted, doomed-to-fail attempt Gurman and others believe it will. There is no point in doing that. When it comes to new tech — and companies of Apple’s scale or impact — it’s always been “go big or go home”. Tech history is full of examples like HoloLens. We don’t need more of those… and this company certainly doesn’t.

If Apple means to bet its future on this product, like it did 15 years ago with the iPhone and the App Store, then it needs to acknowledge that pulling off the same feat now will have a price. (Image: Ian Zelbo, MacRumors)

So what should Apple do? Simple. In this particular case it should get out of its comfort zone and abandon its usual practices. It should do what needs to be done. Want to launch a premium AR/VR product in 2023, Tim? Then do so at a price that early adopters, not just developers, can actually afford. Do not count on revenue from this product. Don’t expect to enjoy fat profit margins or any profit from this one. Planned on selling it at $3000? Then sell it at $1500, even if it means that you lose money on every sale. That is the price of building a new ecosystem for the future in less than ideal circumstances. Pay it.

A product like this should find its way to as many consumers as possible in as short a time as possible if Apple means to become a major AR/VR player, Tim. Remember the iPhone and its App Store: would the former have succeeded if it waited for the latter to come up to snuff? Explain to shareholders that they can’t expect future long-term earnings  ( like the ones they enjoyed by riding the iPhone for 15 years)  without supporting a selling-at-a-loss, sizable investment in a Reality line now. Make them see it, it’s that simple.

Even as a work-in-progress product, a relatively affordable Reality Pro device will be able to have a user base developers can address. Sure, you can always launch a Reality Plus and/or a Reality Ultra device later on, when the Reality app store gets where it needs to be in terms of variety and quality. But, for now, go all in. If there’s one company that can afford to do that, after all, it’s Apple. No?


Kostas Farkonas

Veteran reporter with over 30 years of industry experience in various media, focusing on consumer tech, entertainment and digital culture. No, he will not fix your PC (again).

Veteran reporter with over 30 years of industry experience in various media, focusing on consumer tech, entertainment and digital culture. No, he will not fix your PC (again).




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