Apple's VisionPro Faces Challenges: Pressure from Meta's New AR Glasses and MR Headset

Apple's VisionPro Faces Challenges: Pressure from Meta's New AR Glasses and MR HeadsetApple is facing increasing pressure from Meta's latest AR glasses and more affordable MR headset, forcing the company to re-evaluate its VisionPro strategy. In response to this challenge, Apple's Vision product team is evaluating various options, including continuing with existing development plans, launching smart displays, smart glasses, and AI-powered smart earphones

Apple's VisionPro Faces Challenges: Pressure from Meta's New AR Glasses and MR Headset

Apple is facing increasing pressure from Meta's latest AR glasses and more affordable MR headset, forcing the company to re-evaluate its VisionPro strategy. In response to this challenge, Apple's Vision product team is evaluating various options, including continuing with existing development plans, launching smart displays, smart glasses, and AI-powered smart earphones.

Meta's new products, especially its more affordable MR headset, pose a significant challenge to Apple. While VisionPro is technically impressive, its high price and lack of compelling features make it challenging to become a mainstream product. In contrast, Meta's new MR headset is more affordable and offers a wider range of applications, likely attracting more consumers.

Apple's iPhone and AppleWatch both underwent significant adjustments and optimizations before becoming market hits. For the iPhone, Apple gained market share by lowering prices, supporting third-party apps, and providing faster 3G connectivity. AppleWatch, on the other hand, gained traction only after the company focused on fitness tracking, health monitoring features, and notifications.

However, VisionPro faces challenges unlike those encountered by the iPhone and AppleWatch. Apple plans to develop VisionPro into a device family spanning different features and price points, but its starting point isn't as solid as the iPhone's. If Apple achieves future success in the headset market, the final product may be vastly different from today's VisionPro in terms of appearance and experience.

VisionPro is undoubtedly a remarkable technology, particularly excelling in video playback. It can transform any room into a virtual cinema, and Apple's immersive videos including sports highlights and natural landscapes are breathtaking. The hardware design is equally impressive, featuring a sleek aluminum and glass design, high-end cameras, advanced chips, and stunning displays.

However, VisionPro is more of a technological showcase than a true consumer product. Consumers lack a compelling reason to use VisionPro as a computer replacement, and its shortcomings are undeniable. It's uncomfortable to wear for extended periods, lacks third-party software and video content, and lacks other compelling features. Whether you call it MR (combining AR and VR) or Apple's preferred term "spatial computing," the concept hasn't caught on with consumers yet.

Price is another hurdle. VisionPro costs $3500, excluding taxes, storage upgrades, and accessories, making it inaccessible to most consumers. Apple could potentially boost sales by lowering the price by $500 to $1000, but that might not be enough to entice consumers reconsider the product. Given its high manufacturing cost, Apple might significantly cut profit margins, but market share growth could still be minimal.

Meta's string of new technologies further underscores Apple's apparent missteps. At Meta Connect, Meta unveiled its latest Ray-Ban smart glasses. Unlike VisionPro, these glasses aren't technological marvels nor intended to be a true augmented reality device. However, with their stylish design, practical features, and effective marketing all areas where Apple excels they have resonated with consumers. To be frank, Meta's Ray-Ban smart glasses seem like a product that should have been Apple's and would have integrated well with its wearable device lineup.

In the mixed reality realm, Meta further challenges Apple with its new Quest 3S headset, starting at just $299. At this price, Meta has a much better chance of bringing MR technology to the mainstream market, far exceeding Apple's reach. You'll see many Quest 3S purchased as gifts or by casual consumers seeking a more immersive gaming or movie experience. In comparison, Apple's VisionPro costs ten times more than the entry-level Quest 3S but doesn't offer ten times the performance. If the primary applications of a headset are gaming and video playback, VisionPro's high complexity isn't necessary.

Meta's trump card lies in the demonstration of its "Orion" AR glasses prototype. While this device isn't ready for the consumer market, it's perhaps the closest we've seen to a practical AR device. Orion offers a wide 70-degree field of view (close to VisionPro) and operates through elegant eye and hand gestures. Its design philosophy aims to eventually deliver a device that can be worn comfortably on the face all day long, replacing smartphones.

Orion glasses are still in the prototype stage, with a projected release for consumer consumption in three to five years. Therefore, comparing it to Apple's current development might be unfair. After all, Apple traditionally doesn't showcase products years before release. However, Meta proves its steady progress towards this compelling goal. Based on all available information, Meta appears to be ahead of Apple in AR glasses development, already beyond the lab stage.

According to analyst Mark Gurman, Apple seems to realize the need to reassess its headset strategy, but there is no consensus yet. Currently, Apple's Vision Product team is evaluating several different options, including:

1. Maintain current course: Keep the VisionPro's design largely intact but release a more affordable version. Apple could reduce costs by using less expensive materials, simplifying internal technology, and employing lower-quality displays. Simultaneously, the company plans to introduce a second-generation high-end VisionPro with new chips and Apple's intelligent technologies.

2. Smart Display Route: In this scenario, Apple would remove the computing unit and external battery from the VisionPro and move most of the internal functions to the iPhone. This would not only reduce the headset's weight and heat dissipation but also achieve a price reduction by eliminating hundreds of dollars worth of components.

3. Smart Glasses Route: Develop a product akin to Meta's popular Ray-Ban smart glasses collaboration, without augmented reality features. Apple could leverage its strengths in chips, audio, and artificial intelligence to create a compelling device. While this product could be considered a "me-too" effort, its potential resembles an "upgraded AirPods" and would likely resonate with Apple fans.

4. AI-powered AirPods Route: Apple is developing a new generation of AirPodsPro with external cameras and artificial intelligence that can perceive the external environment and provide information to users. This design could be seen as an alternative to smart glasses, albeit without the actual glasses.

5. Ultimate Dream Route: Apple's ultimate goal is to develop a standalone augmented reality glasses with high-performance lenses, a battery system, internal computing unit, cameras, eye-tracking, and all the comforts and lightness of normal glasses. This vision has long been CEO Tim Cook's dream, but due to significant technical challenges, Apple had previously paused its development.

Apple could eventually release some or all of these products, but it needs to accelerate its development speed. Otherwise, it risks losing its leading position in this potentially transformative product category that could fundamentally change how people use technology.

Apple has been facing challenges expanding beyond its core business in recent years. Its smart home strategy lacks coherence, its automotive project has failed, and even in artificial intelligence, Apple has been a late bloomer and has performed poorly. Nevertheless, with the vast revenue generated by the iPhone, Apple can afford some failures. However, its long-term robust development depends on its ability to capture the next innovation frontier before its competitors.