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Wednesday, January 11, 2023
Apple’s mixed reality headset won’t replace your iPhone
Apple (AAPL) is expected to launch its first mixed reality headset. According to Bloomberg’s Mark Gurman, the Cupertino-based company will unveil the highly anticipated hardware called Reality Pro ahead of its Worldwide Developers Conference event in June, before launching it this fall.
Apple has been looking for a new product for years to balance its reliance on iPhone sales, which make up the bulk of its revenue. It launched subscription services like Apple TV+, Apple Music and Apple Fitness+, and accessories like AirPods and Apple Watch. But these are more or less add-ons for iPhone owners.
The Reality Pro headset, on the other hand, is a standalone device that will launch the company into a whole new field of computing and put it in direct competition with companies like Meta (META). The headset is expected to be one of the most advanced on the market and will run on high-resolution displays, external cameras for augmented reality capabilities, and Apple’s own M2 processor.
But don’t expect Reality Pro to rid Apple of iPhone addiction anytime soon.
“This is a pointless product,” UBS Analyst David Vogt told Yahoo Finance. “This is a very high-end device. We’re talking like $1,500, $2,000 if not more. So that’s a very limited audience. And we think the start will be mostly industry-centric. So we think the volumes will be relatively low.”
In other words, Apple’s iPhone will continue to be Apple’s flagship product no matter what reality you are in.
Apple’s iPhone is as important as ever
In 2022, the iPhone accounted for $205.4 billion of the company’s total sales of $394.3 billion. Services, Apple’s second-largest business, accounts for just $78.1 billion of the company’s total revenue in 2022. Heck, Wearables made less revenue than the iPhone when the Mac and iPad businesses combined — $110.7 billion.
“Apple has become a single-product economy, so to speak, where its reliance on iPhone revenues is starting to become perhaps irritating in terms of its ability to sustain growth, so to speak,” NYU Stern School of Business professor Arun Sundararajan told Yahoo Finance. “So I can see the motivation to want to have another game-changing product within the company.”
But analysts say the Reality Pro’s high price means it’s unlikely to sell in the volumes needed to outpace the iPhone.
According to CCS Insight, worldwide VR and AR device shipments will reach 66.8 million by 2026. That’s a big jump from the 9.6 million shipped in 2022, but it’s nowhere near the 1.24 billion smartphones IDC says were shipped in 2022.
According to Vogt, the only product that could help Apple become more than an iPhone company is its car, codenamed Project Titan, or a deeper attack on the healthcare space.
If that’s the case, why is Apple jumping into the mixed reality arena in the first place? It’s simple: Meta sees companies like Nvidia (NVDA) and Microsoft (MSFT) investing in the space and can’t afford to lag behind in case mixed reality headsets or accompanying software are preferred. devices of the future.
After all, Apple has seen firsthand how much damage Microsoft has suffered by entering the smartphone market too late. The cloud computing giant has sold parts of the phone maker for scrap after spending $7.2 billion to acquire Nokia in 2014.
The smartphone is still the center of our digital life
Apple’s iPhone, from its rivals – Google overhauled the prototype Android phone after Apple founder Steve Jobs launched the iPhone in 2007 – is now more than ever before the generational generation that affects everything from our phones to our cars with sporty interfaces. is a product.
“Every meaningful part of our lives is and is affected by smartphones on a daily basis,” NYU Stern School of Business professor Anindya Ghose told Yahoo Finance.
“Given this, I don’t see a viable way for a VR device to have a significant impact in terms of mind sharing or consumer adoption. The smartphone, and especially the iPhone, is incredibly powerful in terms of opinion sharing for consumers.”
Of course, this could be to Apple’s advantage. The company’s customers tend to be extremely loyal, which gives it an install base of hundreds of millions of iPhone users ready to check out its newest device.
Still, it’s hard to imagine that these consumers would be willing to wear headphones for extended periods of time to view content they would normally see by opening their phones. Headphones are still too bulky and unattractive to be a person’s primary computing tool, no matter who made them. Even Meta’s high-end Quest Pro is too heavy and uncomfortable, according to The Verge.
That’s not to say that an Apple-made mixed reality headset won’t be a success or help consumers become more interested in virtual reality and mixed reality. But in the near future, the iPhone will continue to be Apple’s livelihood and most influential product. Her like by the virtual guaranteed.
By daniel howley, technology editor at Yahoo Finance. follow him @DanielHowley
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