Following our analysis yesterday on the drivers for Apple’s rumored VR play, we continue the narrative in this week’s XR Talks. Specifically, we’re featuring a wide-reaching and technically-astute discussion from Ian Hamilton and David Heaney at UploadVR… fittingly set in VR.
First, to level set, Bloomberg reported last week that Apple plans for a VR headset to release next year. Codenamed N301, it’s rumored to be a high-end headset (more Valve Index, less Oculus Quest). Our theory is that its mission is at least partly to pave the way for Apple’s AR plans.
Beyond our breakdown yesterday of supply-chain factors and market-competition implications Hamilton and Heaney dive deep on several technical variables. These include Apple’s strengths in building VR hardware, technical limitations, company culture, and lots of privacy implications.
Diving right in, Heaney starts with a historical recap of Apple’s AR and VR moves (mostly the former) in the past few years. One key takeaway here is that Apple’s direction can be extrapolated with the acquisitions it’s made, such as Akonia Holographics, Spaces and NextVR.
These acquisitions collectively support a rumored VR play, as the technologies align with VR components and technical requirements. But also in that short history of Apple’s XR ambitions, Tim Cook disparaged VR in 2017 (favoring AR), so something has changed since then.
A bigger question is what Apple’s headset will be and do. In other words, what will be its selling points and differentiators? Heaney believes that Apple’s persona would likely steer the device beyond VR’s common gaming-centric persona. This could include media and entertainment.
In fact, one advantage Apple has — along with its vertical integration and supply-chain leverage examined yesterday — is a media ecosystem. It has Apple TV+, not to mention an established content delivery system in iTunes where many users have purchased movie and TV libraries.
Apple also has a payment infrastructure through iTunes and Apple Pay. This could eliminate lots of friction in VR. From personal VR experience, signing into things and getting onboarded to a given experience is often clunky. Apple could apply its account management and DRM systems.
Another place Apple could integrate its products is the iPhone as a VR input device. The standard VR format of typing text by ray casting to floating keyboard isn’t natural. But tapping your phone — viewable in VR through passthrough cameras or tracked graphically — could feel natural.
As you can tell, the prevailing theme in the above (and our analysis yesterday) is Apple’s ability to gain leverage and differentiation through existing product integrations. For example, Apple’s recent forays into LiDAR position it for depth-sensing VR hardware and room-scale experiences.
This is another place Apple could deviate from VR gaming. With LiDAR (in tandem with RGB cameras for color passthrough), it can offer room-immersive AR. That could involve entertainment, Memoji-based social interaction, or a version of Facebook’s “Infinite Office” concept.
Heaney asserts that this will bring us more compelling and graphically-rich AR experiences than what’s possible with AR glasses. As we’ve examined, passthrough AR holds some advantages (and some practical disadvantages) over optical combiners in see-through AR glasses.
Another place that Apple’s vertical integration plays in is with its new Silicon line. By making its own chips, it can achieve even greater levels of hardware and software integration. This involves cost-benefits in owning the supply chain, as well as power-saving and performance advantages.
For the latter, if there are any technologies where these advantages shine, it’s VR. Based on the technology’s graphics-heavy processing requirements, it can benefit from being closer to the silicon. Here, Apple can develop and directly deploy purpose-built SoCs for VR.
This is an area where Facebook will have to catch up. It has already made notable moves towards vertical integration by having its own VR hardware. But there are still key parts of the tech stack that it outsources, including processing. So Apple will have an edge in that department.
Paving the Way
Speaking of which, there’s still an open question about whether or not Apple’s rumored VR play will compete with Facebook. As we examined, they’ll likely sit at different segments of the market with different price points — Facebook at the low end and Apple at the premium end.
These positions are logical given Facebook’s goal to get more people into VR and build a network effect through affordable hardware. It doesn’t need to make money on each unit sold, which makes it difficult to compete with….especially for the hardware margin-centric Apple.
Knowing that, Apple is going for a high-end approach where it can achieve margin — helped by its supply-chain economies — and not have to compete on price. And though its goal isn’t only to sell a few hundred thousand units, it can still reach its greater goal of paving the way for AR glasses.
That greater goal includes establishing a more robust supply chain for the components that AR and VR will share (processing, sensors, etc.). And as noted yesterday, VR could represent a live market R&D project to observe behavior and optimize some aspects of AR glasses design.
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Elephant in the Room
Lastly, there’s the elephant in the room: privacy. Here Apple has an advantage as it’s branded itself over the last decade as a privacy-centric tech play. Moreover, its business model doesn’t incentivize data collection in the ways that advertising does — a model that haunts Facebook.
Facebook VR and AR lead Andrew Bosworth has announced that Facebook plans to differentiate its VR products on the basis of privacy. That’s a smart play, but it’s a question of whether the cat’s out of the bag with respect to consumer distrust. We’ll have to wait and see how that plays out.
Meanwhile, all of the above is good news for consumers. With more choice, they’ll ultimately benefit. Meanwhile, Facebook and the rest of the VR industry will only benefit from Apple’s entrance. As we’ve seen for years, its signature “halo effect” can mainstream emerging tech.
For more, we recommend the entire deep-dive in the video below, which also gets into matters of company culture, AI prowess, and other influential factors. We’ll also continue to keep a close analytical eye on all of the above as clues continue to trickle out of Cupertino.