Apple’s blockbuster AirPods sales bode well for ‘Apple Reality Pro’ headset

In 2023, Apple will unveil the company’s next major computing platform, a mixed reality headset that supports both virtual reality and augmented reality. AR/VR headsets are a small market by Apple standards right now, but the company’s massive headset division shows just how big Apple can make what was once considered a niche product.

Apple VR/AR headset concept by Antonio DeRosa
Apple VR/AR headset concept by Antonio DeRosa

Max Chafkin for Bloomberg Businessweek:

Its codename is N301, although trademark filings suggest its real name could be Apple Reality Pro. Those filings and early word suggest the device’s components are likely to blow VR headsets from Facebook, Sony and HTC. Apple’s version of VR is likely to look better, run faster, and offer more immersive graphics.

Apple has been working on its headset for seven years, and the project now has about 2,000 employees, including the man who previously led VR development for NASA. However, today’s VR market is still tiny by Apple standards. Facebook, which renamed itself Meta Platforms Inc. to reflect its commitment to the Metaverse, as VR is sometimes called, accounted for nearly 80% of headset sales last year, according to market research firm IDC. The entirety of this business accounts for a little over 0.5% of Apple’s total revenue, which sounds less like a fundamental shift in strategy and more like what the company is doing with selling fancy iPhone cases.

…[Enter] probably the greatest success story in the tech industry of the last decade: AirPods.

Apple doesn’t disclose sales of its headphones — its quarterly filings lump AirPods in with its watches, home speakers, and other accessories — but outside analysts say it sold about 120 million pairs in 2021. Estimates from IDC and Bloomberg Intelligence suggest AirPods account for about half of the sales of what Apple calls “wearables, home and accessories,” its fastest-growing division. From 2016 to 2021, revenue in this category grew 245% to $38 billion. Piper Sandler Cos., the investment bank, estimates that 3 out of 4 US teenagers own AirPods. Apple set the standard for wireless headphones, making a free pack-in accessory a $200 must-buy.

MacDaily News Take: The initial mixed reality headset “Apple Reality Pro” is called “too expensive”, “insufficient content”, “weird looking”, “most expensive headset in the world and doesn’t like it” by the usual suspects. business users because it doesn’t have a keyboard, which doesn’t make it a very good email device”, etc.

The fact is, Apple’s smart glasses will be expensive, cool, and niche, but it’s subsequent Apple smart glasses that will change the world.

The big, “expensive” VR headset will serve in part as a vehicle for developers to create the next killer AR apps for real, light, powerful Apple smart glasses. – MacDaily News, February 4, 2021

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