Augmented Reality and Virtual Reality headsets
According to supply chain and media reports, augmented reality and virtual reality headsets can be said to be a upcoming product that is almost certain to be launched. The current launch schedule is uncertain, and a conservative estimate is 2023.
The detail spec of this headset are not very clear, but it will definitely take the high price route, and the production volume will not be too large (because the market is limited), and it may be one box can switch between Augmented Reality and Virtual Reality.
Note: Mixed Reality is Microsoft’s term, while Apple uses the term of Augmented Reality.
In fact, Apple is a leading company in augmented reality. A few years ago, it launched a complete package of ARCore, which provides developers with the development of augmented reality programs on Apple’s platform.
At present, there are many programs on the App Store, and there are many companies in the market that support the Augmented Reality technology provided by Apple.
It is also worth mentioning that since Meta made a big splash last year to change the company name from Facebook to Meta, and declared that the positioning of the entire company in the future will be shifted to the Metaverse, and even proposed a budget of at least $1 billion to invest in the Metaverse.
But have you ever thought about it, the metaverse cannot succeed without the necessary devices, software, and platforms. Zuckerberg knows this all too well, and it’s the main reason why Meta has been bloodily selling its Oculus headsets over the past few years with a big subsidy.
And Apple has an unparalleled advantage in this area, see my previouse post “What is the metaverse? any related companies?” Apple is one of the platform provider of two major mobile devices, and has launched a complete package of ARKit for many years, plus a complete and unique ecosystem, and highly loyal users. As long as Apple launches related headsets, it will definitely create a whirlwind.
- Meta (formerly Oculus): 3 million Quest 2 units sold in 2021. Meta (formerly Oculus): 3 million Quest 2 units sold in 2021. According to IDC data, among the global shipments of 10.95 million VR headsets in 2021, Meta will monopolize the shipments of about 8.76 million units. Moreover, IDC expects global VR shipments to grow further in 2022, with annual shipments reaching 13.9 million units.
- Sony: PlayStation VR headset accounts for about 1/3 of the global market share in 2017. A new generation of VR headset PSVR2 will be available in early 2023.
- Samsung: The Samsung Gear VR was developed in partnership with Oculus VR, but Samsung has announced its exit from the VR business.
- ByteDance’s Pico
- HTC Hive
Apple Smart Glasses
Product launch possibilities
It is also a futuristic installation that has been legendary and covered by the media for many years. It is unlikely to launch within two or three years for three basic reasons:
- Moreover, Apple has always had high requirements for its own products, it is impossible to rush to launch any products just to meet market expectations or simply for short-term business interests.
- All parties have high expectations for Apple products, hoping that Apple can make a smart glasses that are different from the current ones in the market from other vendors. In other words, so far, none of the smart glasses launched by various parties has impressed the market.
- More importantly, with the current level of technology, including materials, viewing angles, display clarity, weight, mixed reality, and the degree of integration and maturity of technology, it is unlikely that it will meet the requirements of light and thin, satisfactory functions, and easy to use. Most customers will not pay for it unless the product meets all of these three conditions.
Highly doubtful market acceptance
Media and Wall Street analysts have repeatedly stated that Apple’s smart glasses may replace the iPhone and become Apple’s main revenue source in the next decade. I personally think that this is very uncommon and unreasonable speculation. Apple’s smart glasses can indeed create a market and revenue, there is no doubt; but it cannot become everyone’s must-have electronic device, which is my core rationale. And market experience with similar devices on the market now and in the past has long proven this (see the Competitors subsection below).
Apple is a consumer product-oriented company. It is currently the listed company with the largest revenue and market capitalization. The revenue figures are extremely large. It is basically impossible to find a revenue source that replaces the iPhone, which accounts for more than half of the revenue.
Technologies are not matured
Moreover, for a product to sweep the market, it involves not only the maturity of technology, but also usage scenarios, functionality, and potential possible markets; in terms of these four points, smart glasses are not eligible and will not have the market of the iPhone. Everyone needs a mobile phone, but does everyone need smart glasses? I highly doubt this, at least not for the next ten years in sight.
- Microsoft’s Holelens: It is the only smart glasses in the market with a sales volume of 100,000 units. Since its launch, a total of 120,000 units have been sold, but the price is as high as US$3,500, and it is not fully open to end consumers. After revealing the HoloLens 2 at the 2019 MWC event, Microsoft seems to have canceled the original HoloLens 3, and may turn to a new mixed reality headset in partnership with Samsung. In addition, the inventors and the head of this product line have just left, and the future prospects are bleak.
- MojoVision: A prototype of MojoLens, the world’s first AR contact lens startup, was released in early 2022. Recently, the open wearing test was announced in August 2022.
- Magic Leap: It has fallen from the highs of a few years ago, abandoned the consumer market, and the company is currently in poor shape. Since its launch, Magic Leap One 6 has only sold 6,000 units, most of which are gifts, and only 2,000 units are actually sold to end consumers. The company’s biggest problem is that the authenticity of the technology it has repeatedly demonstrated doesn’t exist.
- Alphabet’s Google Glasses: Due to the lack of market acceptance at the time of launch, it has now been transformed from consumer devices to a few enterprise-side special applications. Only a few thousand units are believed to have been sold since launch. At present, the Alphabet is starting from scratch, and Google has announced that it will test AR glasses in public places, such as instant translation functions.
- Meta’s smart glasses: The first version of Meta’s Orion’s AR glasses will be distributed only to developers and will not be sold to end consumers.
- Snap’s smart glasses: The Spectacles product line was a flop, with several versions selling poorly, and the company reported a loss-making write-down of nearly $40 million in unsold glasses inventory and parts in 2017. It’s augmented reality glasses, launched in 2020, haven’t sparked any discussion either.
- castAR: The castAR glasses combine elements of augmented and virtual reality, and the company went out of business in 2017.
It’s not news or secret that Apple might build its own car. The question is when will it be launched?
The positioning of the Apple car has almost been determined:
- The Apple Car will be an electric car that runs on batteries.
- Targeting the high-priced car market, that is, the 2% market where competitors Mercedes-Benz and BMW’s focused. Just like the positioning of the iPhone in the mobile phone market, the market positioning of the Apple car will even be higher than that of the Tesla Model S and Model X.
- Car industry is more complicate than mobile phone, so it will find a foundry, Apple is impossible to build Apple cars by itself.
Apple must first solve the general direction of the following issues, otherwise it is impossible to enter the engineering research and development, let alone mass production:
- Self-driving: This is a very complex subject, and the scope is complicate, including at least the following topics:
- Sensor technology, camera
- Artificial intelligence algorithm
- With or without the steering wheel
- Major ODMs for Apple Cars
- The establishment of the supply chain of the Apple car
- Battery technology
- Engineering team
- Timeline: CEO Cook’s current contract with Apple is only signed until 2025, so speculation is that a more reasonable launch date for the Apple Car would be before his current contract expires.
In addition, what most people don’t know is that Apple’s CarPlay car software system has now captured all the more well-known car manufacturers in Europe and the United States except Tesla (ticker: TSLA). This can be regarded as a uneasy achievement.
And the development of CarPlay has been similar to a non-core technology in Apple a few years ago, and it is only an interface for the car dashboard; it has developed into the current function is very complete. Outside speculation is even likely to go in the direction of the Android Auto in-vehicle operating system against Alphabet (tickerss: GOOG and GOOGL) and become the core in-vehicle operating system of the car.
Apple already has modem chips
It is not that Apple is incapable of designing or launching its own modem chip, and Apple already has its own modem chip. The problem now is that Apple has high requirements for its own products, and it is impossible to launch them easily without a full and perfect grasp. Another major factor is how picky the public is about Apple’s products, and Apple’s products usually have great significance in terms of indicators and wind direction in the market, not purely technical considerations.
How difficult is the modem?
You may think that if it is not just one chip, Apple has money and people, and even the iPhone’s A series chip (Please be aware: it’s an Application Processor, not Communication Processor we are talking about here) beats Intel’s personal computer’s processor in the performance score, there is nothing that can’t be done. Things are not as easy as most people think, because the modem chip consists of four parts, one of which is indispensable, and all four are important:
- Chip design: This is the part that is generally understood.
- Patents: Tthis is not something that can be solved with money, image why Qualcomm was sued by governments around the world for antitrust, and it still make a lot of money everywhere.
- Adaptation with various communication providers, field test, and usage scenarios will consume a very long time, resources, manpower, and money. It’s not something that can be done in the short term, nor is there any shortcut.
- Backward compatibility, 5G mobile phone modem chips must include all functions, technologies, and tests of previous 4G, 3G, and 2G. The implication of this is that it is more difficult for a competitor to join later, because the new player has no basis for the old one. In addition to 5G, all the functions, technologies, and tests of the previous 4G, 3G, and 2G must be completed.
How important is the modem?
Modem, called Baseband processor (Baseband processor) in mainland China, or known as the mobile phone communication chip (Communication Processor: CP). It’s price is almost two times of the so-called mobile phone application processor (Application Processor: AP).
Please note: Apple has so far only produced application processors, which are chips in the Ax series (Application Processor: AP); it cannot produce modems in-house. If Apple is included, there are currently only six manufacturers (Qualcomm, MediaTek, Samsung, Apple, Huawei, UniSoc) capable of designing 5G mobile phone modem chips in the world. It can be seen how difficult the technology is, so it is not surprising that the price is so high.
iPhone only used Infineon and Qualcomm
Strictly speaking, Apple’s iPhone has only used modems from two companies, one is Qualcomm (iticker: QCOM) and the other is Infineon (ticker: IFNNY). The early iPhone mainly used Infineon, and later mainly used Qualcomm. The Intel modem that was later adopted after Apple and Qualcomm had a falling out was actually obtained by Intel’s acquisition of Infineon’s wireless business for $1.4 billion in 2010.
Apple’s acquisition of Intel modem unit
Therefore, based on cost and unwillingness to be strangled by Qualcomm. Intel gave up the mobile computing business in 2016, and Apple had been developing it for many years before, and Apple could not make significant progress in producing their own modem chip. The two sides hit it off. Apple bought the entire unit of Intel’s modem business for $1 billion in 2019.
Apple will soon use its own modem
Qualcomm’s chief financial officer has said that it is expected that Qualcomm will only provide 20% of the modems required by Apple’s iPhone in 2023, because Apple will use its own modems at that time. However, according to media reports, Apple’s development of the modem is not going well at present, and it is very likely that it will not be able to use its own modem in 2023 as scheduled.
Apple can’t give up in-house modems
But I personally absolutely believe that Apple will continue to develop its own 5G modem, and I don’t think it will back down just because of a little trouble. Because regardless of the core technology of the product, the irreplaceable importance of the iPhone to Apple, and the cost, it is impossible for Apple to give up launching its own modem.
In July, 2022, Apple outline the strategy in digital health, courting consumers with health and fitness features on one hand while engaging with traditional healthcare systems on the other.
In addition to the launch of Apple Fitness+ last year, the Apple Watch has gone through a painful period of initial unknown positioning. At present, it is clearly positioned in personal healthcare-related services, that is, the Apple Watch will focus on health-related functions in the future. The health-related functions is the focal point of design or version updates of Apple Watch.
At present, Apple Watch has provided the main functions of body health index detection including heartbeat, respiratory rate, electrocardiogram and even blood oxygen concentration measurement. It has been working hard and is now being developed. Services that may be launched in the future include body temperature, non-invasive blood sugar level detection, etc.
In addition to the Apple Watch, the new version of AirPods in the future may become an important health detection tool than the Apple Watch. This can be seen from the patents Apple has applied for AirPods-related health detection functions in the past. Apple’s investment and achievement in this aspect can be seen as well.
AirPods do have advantages as a health detection device. The small size of the earphones coupled with the fully wireless design reduces the impact on the wearer when AirPods are worn. Compared with the Apple Watch and other wearable devices worn on the hand, it is “closer” to the human body, and the data obtained when detecting heart rate and body temperature will be more accurate.
And Apple has gone to great lengths to expand its R&D investment in healthcare over the past few years, and it has indeed achieved good results and acclaim.
Apple used two search engines only
In order to get rid of its dependence on Google, Apple has been reported by the media to develop its own Internet search engine. But this has never been officially confirmed by Apple. Apple also used Microsoft’s Bing search engine as the default search engine on the iPhone in the early years, but soon switched back to Google because of the poor user experience.
Billion dollar annually
Google has to pay at least tens of billions of dollars per year (will increase year by year) to obtain the status of the default search engine on Apple devices. Investment bank Bernstein estimates this amount at US$20 billion in 2022. This is of course a lot of money, but Google paid it well, because the iPhone accounts for more than half of the US market, and iPhone users are heavy mobile phone users, spending twice as much as Android, which brings a lot of commercial interests (mainly advertising) and visibility to Google.
The value of search engine
The pros and cons of Apple developing its own search engine
Let me emphasize again the importance of a search engine, search engine is the key of internet business! It is how Alphabet comes from.
The advantages of Apple are obvious:
- Apple can use its own search engine on 1.5 billion Apple devices worldwide
- Redirect traffic to where it benefits Apple, bringing huge cash to Apple, benefit its future advertising business.
- The consumption power of users of Apple devices is much higher than that of Android systems, and it is the target that all parties want to strive for.
- Take full control of Apple’s ecosystem without having to look at the Alphabet’s faces.
There are mainly the following items:
- If Apple decides to develop itself rather than acquire it, it will be a long road, and it will be difficult to say when it will be launched, and it will be very difficult.
- Because there is already a high-standard Google out there, and Apple’s own standards and users’ standards and expectations are high.
- It’s impossible to beat the Alphabet’s Google.
During the Jobs era, Apple made a big splash by setting up a dedicated team to develop its own advertising business, called iAd at the time. However, the development was not as expected. Jobs admitted that Apple was not professional in advertising, and the time was not ripe, so he disbanded the iAd department.
Apple is developing an advertising business
Apple’s entire ecosystem is now very organized and large, and it is no longer the same as in the Jobs era; therefore, it makes sense to develop its own advertising business. In fact, Apple has already sold advertisements on its App Store for a long time, and developers can place advertisements to make their programs get better exposure on the App Store. But Apple’s vision should be more than that!
Todd Teresi, vice president of Apple’s advertising platform, said that the current annual advertising revenue of 4 billion US dollars will grow to exceed 10 billion. Apple’s e-book reading software Books and Podcasts will include more advertisements, and there is also the possibility of adding search advertisements to the map service Apple Maps.
- “How does Unity, the only software partner of Apple Vision Pro, make money?“
- “Apple company culture deep dive“
- “How does Apple make money?“
- “Apple’s upcoming products, services, and technologies“
- “Apple’s product design philosophy, How does Apple think?“
- “Why Apple’s new features always come later? “
- “Steve Jobs’s Apple innovation gone with him?“
- “Apple’s small privacy change caused US stocks evaporate 200 billion U.S. dollars in one day“
- “Did Apple really lose the lawsuit with Epic Games?“
- “The importance of the App Store legal battle between Apple and Epic Games“
- The content of this site is the author’s personal opinions and is for reference only. I am not responsible for the correctness, opinions, and immediacy of the content and information of the article. Readers must make their own judgments.
- I shall not be liable for any damages or other legal liabilities for the direct or indirect losses caused by the readers’ direct or indirect reliance on and reference to the information on this site, or all the responsibilities arising therefrom, as a result of any investment behavior.