The rumors that Apple announced a virtual reality headset at its Worldwide Developers Conference on Monday that sent competitors into a frenzy. Meta announced the new Meta Quest 3 on Thursday. Lenovo has released its latest ThinkReality VRX headset. Suddenly, a niche market that was struggling to capture a wide audience had a lot of eyes on it.
Apple’s anticipated entry into the VR world comes at a time when hardware sales and general interest in the metaverse dream are waning. Some companies, like Meta, have invested heavily in the idea, even if the public has lost interest. Apple has steered clear of the metaverse, but interest in the company’s VR and AR plans has been brewing for some time. Today, Apple may not eclipse the competitors but back up their ideas and lead to many developments and uses for technology.
“This will be a validation that this is really the next chapter of technology and how we communicate with it and use it,” said George Jijiashvili, principal analyst at Omdia, a technology research and advisory company. “If they take it in terms of making the headset more compelling and have really useful apps and functions, then it will serve as a product that everyone is looking at.”
But now the sector is struggling. The VR and AR headset market has seen a 54 percent decline from early 2022 to 2023, according to data from International Data Corporation, a market intelligence company. More than half of the people who bought the Meta headsets reportedly stopped using them within six months. Apple’s debut will actually help its rivals bounce back from the lows. Its announcement “brought a lot of attention to the market,” said Jitesh Urbani, a research manager at IDC. “It helps educate users. That’s what Apple does an amazing job at.”
Apple has a reputation for bringing hardware to market that is not innovative but ultimately dominates. The iPod became the top MP3 player; the iPhone killed the BlackBerry. Creating a VR and AR headset is a bigger gamble in a niche market. Apple teased that a big announcement is imminent, saying “new era“starts on Monday and that the opportunity to “code new worlds” may come. The last major hardware announcement was the Apple Watch, which took smartwatches mainstream and now dominates the market.
Apple is rumored to be working on a $3,000 headset with high-end screens, eye and hand tracking, and a separate battery pack. Meta has updated its Quest to be thinner and double the processing power of its predecessor. It will go on sale this fall for $500. The company will also drop the entry price of the older Quest model by $100 to $300 this week. If Apple’s rumored price point is true, it won’t be a competitor in the gaming world at the moment and will likely attract enterprise and developer customers. Lenovo’s headset lands in the middle, starting at around $1,300.
Other competitors have different goals and prices. AR startup Magic Leap released a second headset for about $3,300 last year, with a focus on business customers. The company is reportedly in talks with Meta about an augmented reality deal. There’s also Sony’s PSVR 2, which launched this year for $550.
One challenge in VR is taking care of people outside of the game. A high price for an unnecessary device will turn people off. But with Apple’s name in the game, more app developers may start investing resources and expanding the uses for headsets, Jijiashvili said. But the company also had to design a headset that wasn’t too intrusive or uncomfortable for the wearer.
An Apple headset may not find mass market appeal until it drops in price and proves itself to the killer apps found in the virtual world. But it’s an opportunity for people to turn their attention to VR and to see how uses outside of gaming might start to take shape. Meta’s lower price should allow it to continue dominating the market for now, said Harmeet Singh Walia, a senior analyst at Counterpoint Research, a technology research firm. Although the Apple headset is appealing, it’s too far out of reach to be an overnight sensation. “I was expecting something special, but it wasn’t an iPhone moment,” he said.
