Apple AR/VR Plans Continue to Crystallize for Both Hardware and Content

Over the past few weeks, Apple has made a handful of moves in the Augmented Reality (AR) and Virtual Reality (VR) markets, once again preparing for a significant hardware, software, and service AR/VR presence in the next couple years. Most recently, rumors point to there being two separate Apple AR/VR devices, the first one being a high-end mixed or merged reality headset (merged reality being a VR headset with camera pass-through capability), and the second being a simpler assistive/AR device. No specific announcements have been made on these products, but related happenings are significant.

On the hardware side, Apple filed a patent for a new ring-like input device for controlling headsets (the patent is officially titled “Finger-Mounted Device With Sensors and Haptics”). The company also recently partnered with TSMC to develop small-scale microOLED displays. Dan Riccio, Apple’s hardware engineering chief, has also shifted focus to AR/VR products for the company.

On the software and content side, Apple released an AR app to market its second season of Apple TV+ title For All Mankind. For All Mankind: Time Capsule is available on the App Store for free and bridges the story of season 1 and 2 of the show with some interactive AR experiences and storytelling.

The recent hardware announcements do not indicate any immediate impact or changes to Apple or the wider market, but rather cement Apple movement towards being an active AR and VR contender, just at Apple scale rather than the small/medium scale common in the immersive markets. Input is an integral part of an AR/VR experience that has sometimes been forgotten. Gesture control can be great for hands-free interaction and user experience, so long as the gesture recognition and associated UI/UX is on par as well, but haptic feedback is also integral for many applications. There has not been a compelling input solution that can be hands-free, haptic-enabled, accurate, and have mass appeal. It is too early to say if this Apple patent will turn into a product, and if it will be successful if it does, but the focus on and concern for input is at least there.

With the timing of the TSMC partnership, it is not likely these displays even make it into the first wave of Apple HMDs, although it is possible. Either way, it shows a longer-term commitment to HMDs for the company. MicroOLED is a logical step for small footprint displays for HMDs, and while a silicon partner may not be the first to come to mind for displays, again microOLED fits here because the process is direct on wafer. It is likely some manufacturing processes can be shared between chipsets and displays. TSMC is already the supplier of Apple’s processing chipsets.

As for the ultimate HMD products, these will both be impactful in their own way. The mixed reality device will target content consumption first, which can leverage Apple’s pushes and strength in content and services. The company already has Apple Arcade and Apple TV+ for gaming and video content, and this headset can easily tap into those services for content. The company also acquired NextVR last year, pointing to in-house immersive content development. The For All Mankind AR tie-in is the first glimpse into cross-service synergies, and we can expect much more in the future. While the For All Mankind app can be deemed just another promotional effort, it hints at more than that for Apple.

For the later AR-focused product, it is expected to serve a similar purpose to the Apple Watch: an iPhone companion device at the core, for notifications and calls, light content navigation, social media, etc. Keeping the price similar to an Apple Watch just is not possible for a high-quality immersive experience product, but it is possible for this more streamlined AR device. Like the mixed reality product, this would leverage the foundation Apple has been building and growing over the past few years in AR enablement (ARKit), content, and services.

While Apple is often the focus of attention for new tech stories, which naturally includes AR/VR, there is plenty of activity and potential outside of the company. Of course, Apple’s impact will be prominent on a significant chunk of the market, but this is only a positive overall. With new devices comes greater content and services opportunities. The iOS and App Store install base is vast, so developers and content creators will likely find a user-rich market to launch content into, which has not been the case thus far.

Apple’s mere presence in a new market as competition also spurs opportunity. Facebook is confirmed to be working on an AR product to release in 2021; Google is not confirmed to be working on a consumer AR product, but with the acquisition of North last year and similar backend AR efforts ongoing, it is likely the company is developing something. Outside of AR, VR is still actively growing even though more slowly than anticipated. Sony confirmed plans for a next-generation PSVR product for the PS5; the first PSVR did not push the needle too greatly, but it still sold well.

An influx of new connected devices that require content opens content delivery opportunities for operators as well. Telcos can realize this opportunity in a few ways. On the networks side, ensuring low-latency content delivery for anything streaming is paramount, whether delivering to a smartphone that happens to be tethered to an HMD or to a standalone HMD. Network uniformity and performance will be stressed in high usage areas and scenarios as well. Partnership opportunities are also strong with retail device sell-through; outside of the Apple Store, cellular providers and their retail setups are an early touchpoint for customers—promotional deals for device purchase, device bundling options, new device activations (assuming cellular connectivity for a standalone HMD), etc.

Finally, while much of the discussion around Apple is consumer focused, there is a significant play in enterprise as well. Enterprise mobility devices are ubiquitous, with iOS devices almost always present. Over the next few years, the desire for lower-cost, well-supported AR devices will grow significantly in all enterprise verticals. Devices with proven development ecosystems and end-user familiarity are a boon; Apple has both, as would a similar competitive offering from a Google, Samsung, etc. So long as devices are compatible (or easily integrated) with existing systems like MDMs, then the lower upfront cost of a consumer product (which is a requirement for this type of product to succeed in the consumer space) and likely ease of use are both attractive to enterprise adopters. Specialty devices will still have a comfortable place in enterprise—ruggedized needs are not going anywhere—but it is another example of competition and choice pushing the entire market forward.