TECH NEWS – The first augmented reality (AR) headset model, supposedly called Reality Pro, will not be a significant success for Apple.
Apple is under pressure to release its AR headset as soon as possible, costing up to three thousand dollars. Mark Gurman, writing for Bloomberg, wrote in his Power On newsletter that Apple would make what he believes will be a very minimal profit on the device. So the launch of the product is aimed at getting ahead of rivals to gain market share: “The company believes it can sell about a million units of the headset — likely to be dubbed the Reality Pro or Reality One — in its first year. At $3,000, that would mean revenue of about $3 billion. There would be little to no profit at first, given that the components in the device are so expensive and Apple won’t be seeking its typical margins just yet.”
Nevertheless, Gurman already sees the device as a failure, partly because of the high price and partly because of the market’s infancy (it is not yet ready for such a product). The second model, which will be cheaper, might be able to increase the user base: “In terms of unit sales, the first version will look like a dud next to the company’s existing products. It’s still likely to make Apple the market leader in mixed reality within a few months, but that’s just a sign of how weak the current market is.”
Gurman likened the headset to the Apple Watch, but it’s hard to back that up because when the company announced the first smartwatch, the wearable industry was at about $10 billion, and today it’s at $41.2 billion. Because Apple puts this product in the home and accessories category (like Apple TV or AirPods, for example), the Apple Watch is successful. But expecting $3 billion in cash flow from the headset in 2023 is steep, even if it’s nowhere near compared to their other products.
MacRumors even highlighted in Gurman’s newsletter that Apple has already dropped a demo of the Reality Pro for executives at the Steve Jobs Theater. The official unveiling is supposed to be in June, but it’s unknown whether it will be during WWDC 2023. Every year since 2018, executives have been able to see the developments, but only this year will they have an in-depth preview. Apple’s design team said the AR headset wasn’t ready for a 2023 release, but Tim Cook (the CEO) and Jeff Williams (COO) ignored them, presumably because they feared they could get behind the 8-ball if they delayed.
It all looks like a jam-packed flop already.
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