In mid-February, Patently Apple posted a report titled “China’s largest video game publisher has bowed out of their ‘Metaverse’ project just as Apple is preparing to introduce their first XR Headset.” The report noted that Zuckerberg’s Metaverse is quickly loosing momentum, especially with China’s Tencent, one of the highest grossing multimedia companies in the world based on revenue, decided to disassemble their VR hardware unit that was designed to address the Metaverse phenomena that never materialized.
Today, IDC confirmed that in 2022, AR/VR headsets shipment declined sharply by close to 21%. The decline was not completely unexpected, however, given the limited number of vendors in the market, a challenging macro-economic environment, and a lack of mass market adoption from consumers.
Despite the downturn, the overall market was led by Meta with nearly 80% share. In second place was ByteDance (Pico) with 10% share as the company continued to ramp up its product portfolio and focus on markets where Meta was notably absent or a lesser known brand. The remaining top 5 spots were held by DPVR, HTC, and iQIYI. One other notable company was Nreal who captured the sixth position amongst AR/VR headsets but held the top spot in the AR market by shipping nearly 100K units over the course of 2022.
Yet it’s Apple and Sony that will provide meaningful competition to Meta’s lead and likely pressure others including ByteDance and Nreal to step up their efforts or drop out.
Ramon T. Llamas, research director for Mobile Devices and AR/VR at IDC: “Another area that is slowly gaining attention is mixed reality – devices that can switch between augmented and virtual reality. The release of the Meta Quest Pro last fall and the announcement of HTC’s XE Elite earlier this year demonstrate clear innovation as to what is possible for the ARVR market, and it should not be difficult to imagine others following suit.
Moreover, commercial users with multiple use cases – ranging from on-boarding and orientation to training and collaboration – may gravitate to its appeal. However, given the still low penetration of AR and VR into the market, it may take several cycles for mixed reality headsets to gain salience.” Read the full IDC report for more on this.
While Apple’s marketing approach is shrouded in secrecy, Apple’s headset OS, rumored to be unveiled as ‘xrOS,’ will reportedly run iOS apps and may introduce a macOS simulator. That feature alone would technically provide Mac users with a mobile desktop experience for the home and on-the-go, allowing the Headset display to provide users with a working display that could mimic a 32″ or much larger display to work with. This isn’t me dreaming, Apple already patented this back in 2018 and was granted a patent for it in 2020. One of Apple’s patent figures is presented below.
In that same vein, one could only imagine Apple delivering a ‘Cinematic’ experience for both Apple TV+ content and Triple-A gaming. That, along with Apple’s long list of patents on record showing us many other projects and capabilities in-the-works including new health related sensors, Apple may be able to provide the XR Headset market with a badly needed shot in the arm and finally deliver features with depth and purpose that will give consumers multiple reasons to invest in yet another high-tech toy.