Apple's first mixed reality headset won't sell well, but that doesn't matter
Recent VR headsets aren't as successful as hoped, and Apple is not going to change that. And it doesn't have to.
There is bad news for the VR industry once again. The well-informed supply chain analyst Ming-Chi Kuo has provided an update on AR/VR headset sales/shipments, and it doesn't paint a good picture. In a Medium post, Kuo claims:
- Sony has cut its 2023 production plan for the PS VR2 by about 20%.
- The product lifecycle shipment for Meta’s Quest Pro is only around 300,000 units.
- Pico (China’s largest AR/VR headset brand) shipments in 2022 were more than 40% lower than expected.
Kuo's conclusion: "There is currently insufficient evidence to suggest that AR/VR headsets can become the next star product in consumer electronics in the foreseeable future."
Disappointing sales, but is it a surprise?
Anyone who knows these products and the general economic situation will be anything but surprised. Let's go through and analyze each point:
- Playstation VR 2: A PS5 accessory that costs more than the PS5 and only offers one major VR-exclusive title (Horizon Call of the Mountain) is selling worse than expected. Who would have thought.
- Meta Quest Pro turned out to be the most redundant Meta headset since Oculus Go. At launch, it cost nearly four times as much as a Meta Quest 2 without providing as much value. There are indications that the device was supposed to launch a year earlier, but even then it would have been little more than an expensive developer kit for Meta Quest 3. Congratulations to Meta if they manage to sell 300,000 units. That's a lofty goal, even at the heavily discounted price.
- Pico 4 brought some hardware improvements (form factor, lenses) over Meta Quest 2, but consumers didn't take notice. More importantly, Pico disappointed in the area that really matters: software. No major exclusives and far less content in the store than Meta Quest make Pico 4 a product that no one (except a group of VR enthusiasts) was waiting for. Again, slowing sales are anything but a surprise.
The Apple headset won't change the industry (for now)
These problems are homegrown, which brings us to Apple's mixed-reality headset, which could reportedly be called the Apple Reality Pro and cost around $3,000.
Kuo writes, "Apple’s announcement event is likely the last hope for convincing investors that the AR/MR headset device could have a chance to be the next star product in consumer electronics."
Anyone hoping that Apple can suddenly make a really expensive, unproven hardware attractive and sell a lot of units will be disappointed. From everything we know about the device, we can deduce that the headset exists not because of the potential sales it might generate, but because it wants to open a window into the future and prove something: that mixed reality is a relevant new computing platform.
The headset will likely shine with innovation and polish, but it won't be a device that sells like hot cakes. It is simply too expensive. Period.
The technology is in its infancy and will take a long, long time to mature. There are no shortcuts, not even for Apple. Commercial success will come in future generations of hardware, if at all.
That doesn't sound like an Apple product or strategy, does it? That's what I thought, too. And I'm still skeptical that the headset will actually be announced this summer.