Apple is about to turn the Mixed Reality world on its head. Why isn't the competition worried?

Legal Disclosure: I have no direct knowledge of a forthcoming Apple Headset other than what I have read from rumors and 'leaks' online. The article below is based past experiences and future conjecture.

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Do you remember the Netbook?

Back in 2006-2010 PC manufacturers were fixated miniaturizing the laptop, and figuring out how small, and how cheap they could make them.

Asus arguably had the most popular netbook of the netbook bunch with the Eee PC. Almost every other company had their take on the Eee PC. The netbook took the world by storm. Small, light, and yet, not that cheap to buy. In Europe and Asia however, these things were everywhere.

But there was one computer company that didn't join in on the craze. Apple.

In the fall of 2008, during an earnings call, when asked when Apple would make a Netbook, Steve jobs responded ""We don’t know how to make a $500 computer that’s not a piece of junk, and our DNA will not let us ship that,"

A few months later in 2009 during Apples second quarter earnings call, someone asked Tim Cook if Apple was working on a NetBook. Cook replied "For us, it’s about doing great products...When I look at netbooks, I see cramped keyboards, terrible software, junky hardware, very small screens. It’s just not a good consumer experience and not something we would put the Mac brand on. It’s a segment we would not choose to play in.”

Almost exactly a year later, when Steve Jobs announced the iPad, he referred to netbooks as not being better at anything a smartphone or laptop could do, that they were just "cheap laptops".

Then, the iPad effectively killed the Netbook.

But this is how Apple operates. They leapfrog existing tech.

• When the music industry was trying to find out how to stop music from being pirated, the iPod revolutionized the music listening and distribution experience.
• When the mobile phone industry was figuring out how to make phones slimmer and smaller, Apple launched the 'huge' iPhone.
• The iPhone killed Blackberry. Palm. Motorola. NOKIA! Compaq PDA's. HP Mobile devices.
• The iPhone killed flash and forced the adoption of HTML5.
• The MacBook Air proved the market for premium 'slim and light' laptops with normal sized keyboards.
• The Apple watch, while not the first smart fitness device, used smart technology and a great user experience to leapfrog existing wearable tech.

That's just a small bit of how Apple has forced change in the tech world.

Apple looks at the whole user experience, and they look at what future technology will enable, and how it will improve peoples lives. And based on the latest rumors and leaks, they are about to do it again, this time with mixed reality.

Let's take a look at the current VR Headset experience.

If you get a standalone VR headset like the Meta Quest pro, HTC Vive Focus 3, or Pico Neo, you are getting a headset that has limited graphics power, has a heavy battery built in that you are putting on your head and only gives you about 2hrs of runtime if you are lucky. And all 3 of these headsets use the same ?Qualcomm Snapdragon XR2 processor... which is essentially a 4 year old mobile phone processor that has been modified to fulfill the needs of 6 degrees of freedom VR.

In fact in 2023, all of the new and existing standalone VR headsets are making use of the Snapdragon XR2.

Since all of these headsets are essentially using the same processing hardware, software and user experience becomes a big differentiator. Meta has done a superb job with their software, from inside out tracking to software updates.

HTC and Pico on the other hand have their work cut out for them here. Every time you put on a Focus 3 there are several updates waiting, requiring the headset to restart each time.

Then there is the question of ergonomics - Meta is the only company that has really figured out the ergonomics of VR controllers-- you will rarely hear Meta device users complain of the controllers. The same cannot be said for HTC, who, in 2023, are still shipping their oversized 'wands' controllers with the Vive Pro 2. The Focus 3 Controllers are so large that anyone with small hands has a hard time using them for extended periods. The HP reverb ships with Windows Mixed Reality controllers made from plastics that feel cheaper than a McDonalds happy meal toy, and vibrate so powerfully and with so much noise that you effectively get a hand massage and very odd looks from anyone hearing you using them...

And that's just the controller ergonomics. I won't even begin to touch on headset ergonomics here.

Now, if you have a tethered headset, the experience can break down quite quickly. Between the need for a powerful computer with specific ports, multiple power outlets and converter boxes, and then the bulky, heavy, non flexible cable that links the headset to the computer, the experience is... less than ideal.

That said, Meta and now HTC Vive have done a good job with the wireless tethering and the single cable USB C tethering with standalone headsets that can be tethered. But even with this, the process can be annoying to setup, and is prone to bugs and failures. For those who use VR on a daily basis, this is just "part of life."

So to sum up, the current state of VR leaves a lot of room for improvment.... all current standalone headsets are using the same processor. There is only really one player who has made a pretty good software experience and has done the due diligence when it comes to ergonomics and usability.... while everyone else is focused on technology and device distribution...

And this is where, once again, if Apple makes a headset, Apple will leapfrog the current VR leaders. If the competition isn't worried....they should be.

• Apple has incredibly powerful mobile processors that are capable of amazing performance and PC class graphics power without the need for fans, and are incredibly power efficient.
• Apple has a proven track record with the integration of software and hardware, being able to create an amazing user experience that 'just works' 98% of the time.
• Apple understands optics and screen performance incredibly well -- while they have not made any XR devices, they did pioneer retina displays, and tech like ProMotion, P3 Color, and even/ efficient backlighting will work its way into the headset for sure.
• Apple understands gestures and UI/UX extremely well, and will be able to create an amazing toolkit for developers to work with that will enable totally new experiences. Remember Steve jobs intorducing the iPhone and talking about keyboards and styli?
• Lastly, Apple knows how to attract and support world-class developers and distribute software like no other. The iOS, MacOS, AppleTV and Apple Music, and Games stores provide incredible foundation for app, content and game distribution. And in typical apple fashion, they will make it easy for developers and content creators to port apps and content to MR experiences.

They are literally the only company currently out there that has so many competitive advantages for an XR headset. To not go into this market would be foolish.

Recently there have been analysts who have questioned if it makes sense for Apple to even get in this space. Ben Evans, a technology analyst who used to work with Andreeson recently wrote in one of his newsletters

The catch is that a $3,000 device might inspire or enable new classes of experience, but why would you invest in creating those experiences for a device with the low volumes that a $3,000 price will produce? And, of course, the basic VR question remains - even IF we get much better hardware, is that enough to break this out of a subset of games?

A lot of analysts still think XR is limited to games, and/or training. Many don't see the promise of XR to enable new kinds of creative experiences, and how it can help revolutionize design, engineering, architecture and UX design industries. Till now the hardware has been hugely limiting, as well as the available software.

Then there is the whole question of the metaverse. Rumors have stated that Apple isn't really targeting this area, at least not yet. If the recent layoffs in Microsofts mixed reality team, the shutdown of Altspace, and the lackluster experience of Meta's Horizon platform are any indicator, the Metaverse experience that many companies envision still needs a lot of work. And Apple has never really been great with the whole social platform, so why would they start now?

It's a chicken and egg situation. If the hardware isn't good or easily accessible, then why develop the software? Likewise, if there isn't a lot of software pushing the limits of the hardware, why invest in making better hardware?

Sadly, in the current tech market, finding the money to invest in better hardware with such a niche market is harder done than said. Which makes it once again, a perfect moment for Apple, with its deep coffers, to launch a new product.

Apple has a record of having product maturity after 3 generations....

• The first MacBook Air showed what thin and light could be. It's performance was lackluster, and it's pricing was much higher than other products. But Apple knew it could iterated on the performance and value with time. The second generation was Ok, but it was the third gen MacBook Air that proved what Apples intent was.
• The first iPhone was a test. Remember they only wanted 1% of the mobile phone market. The initial iPhone didn't have an app store, had a lousy camera, and wasn't all that good. It was a test case to see if consumers liked the touch screen and bigger form factor. Not until the iPhone 3GS did the iPhone really prove Apple's vision.
• The same is true for the Apple watch, and the iPad pro.

Apple works like this:

• Phase 1: Put out new device that offers new tech and a new experience. See how it is received. Don't worry about making it the best out of the gate-- it's about the tech first. See what the competition does and how it reacts.
• Phase 2: Keep the product the same but enhance the software, performance, and overall experience.
• Phase 3: Bring out the big guns -- product has proven its place in the market, competition hasn't caught up or is not great, show the world the true vision of the product.

With that said, and based on rumors and existing knowledge and general information about Apple, the likelihood of Apple launching a headset in the near future seems very high, and the likelihood of it becoming a market leader early on seems equally high.

The first gen headset probably won't take over right away-- again Apple probably will just want to see if it makes sense and how people and developers use it. The second gen will be Ok - better tech, better accessibility, lower price etc. Even if the first gen isn't great/ revolutionary - it doesn't have to be - it will be shots fired -- and if the competition - Meta, HTC, Pico, HP, Lenovo, and others - doesn't respond, and respond in a big way, my prediction is that?by 2025/ 2026, when Apple announces the 3rd gen of their XR headset Apple will own mixed reality in much the same way it owns the world of smart phones, tablets, and smart watches. Are you ready?