Apple delays mixed-reality pivot

The news: Apple’s long-rumored mixed-reality (MR) headset, its first new product category since 2015, is being pushed back to June due to software and hardware setbacks, per Bloomberg.

What we know about Apple’s MR pivot: Apple’s AR headset was expected to be revealed in late 2022, and reports indicated it could have more processing power than an iPhone, per Insider.

• Initial reports stated the Reality Pro AR glasses would run off the iPhone’s processing power. Now it looks like they will have their own onboard Apple Silicon.
• Apple’s AR pivot was expected to serve as the cornerstone of a 10-year plan to replace smartphones with AR headsets. 
• The company could now be accelerating its MR pivot as smartphones are starting to plateau in innovation and in sales.
• Apple recently reported earnings of $117.1 billion, versus the $121.1 billion expected—its biggest decline in revenue since 2016.

What’s the holdup? Apple will reportedly use its Worldwide Developers Conference in June as a springboard to announce the headset and developer ecosystem.

• Apple, which has been working on this technology since 2015, reportedly delayed the launch after product testing revealed both hardware and software had significant issues that need fixing. 
• The company looks to bring the product to market in late 2023, but supply chain hiccups and its contentious developer relations could be hurdles beyond its control.

Pricing is a sticking point: Apple reportedly plans to charge $3,000 for the headset, which is expected to be more of a developer tool similar to Microsoft’s HoloLens rather than a consumer-oriented product like Sony’s and Meta’s offerings.

• The cost is nearly double what Meta charges for its high-end Quest Pro headset. Meta’s flagship already has a supporting app ecosystem but is still considered niche and expensive.
• Sony’s PlayStation VR2 headset, which is designed around gaming, is being panned for being too expensive at $550.

The problem: While it is under pressure to produce another hit product category, now might not be the right time for Apple to pivot toward AR and VR. Even Meta CEO Mark Zuckerberg, the leading proponent of the metaverse, said a functional metaverse is years away from being realized.

This article originally appeared in Insider Intelligence's Connectivity & Tech Briefing—a daily recap of top stories reshaping the technology industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.

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