At Apple, rare disagreement on a new product: interactive glasses

When Apple held a corporate retreat in California’s Carmel Valley about five years ago to discuss its next major product, its longtime design chief Jony Ive captivated a room of 100 top executives. company with a concept video as neat as an Apple ad.

The video showed a man in a London cab wearing an augmented reality headset calling his wife in San Francisco. “Would you like to come to London?” he asked, said two people who saw the video. Soon the couple were sharing views of London through the husband’s eyes.

The video got executives excited about the possibilities of Apple’s next business-altering device: a headset that would merge the digital world with the real world.

But now, as the company prepares to introduce the headset in June, enthusiasm at Apple has given way to skepticism, said eight current and former employees, who requested anonymity due to Apple policies prohibiting to talk about future products. There are concerns about the device’s roughly $3,000 price tag, doubts about its usefulness, and worries about its unproven market.

This dissension was a surprising shift at a company where employees have been building devices — from iPods to Apple Watches — with the determination of a lunar mission.

Some employees left the project due to doubts about its potential, three people with knowledge of the moves said. Others were fired due to lack of progress on certain aspects of the headset, including its use of Apple’s Siri voice assistant, one person said.

Even Apple executives have questioned the product’s prospects. It was developed at a time when morale was strained by a wave of departures from the company’s design team, including Mr. Ive, who left Apple in 2019 and stopped advising the company. Last year.

An Apple spokeswoman declined to comment on the company’s plans for future products.

Apple’s headset is considered an indicator of virtual and augmented reality. For more than a decade, technology leaders have touted it as the next wave of computing after the smartphone. Apple chief executive Tim Cook told university students last year that in the near future “you’ll be wondering how you ever lived your life without augmented reality, just like today you’re wondering: how did people like me grow up without the internet?”

But the road to augmented reality has been strewn with failures, false starts and disappointments, from Google Glass to Magic Leap and from Microsoft HoloLens to Meta Quest Pro. Apple is seen as a potential savior due to its success in combining new hardware and software to create groundbreaking devices. Yet the challenges are daunting.

Meta, Facebook’s parent company, has invested billions of dollars trying to build a virtual reality business. The experience was humbling. It has sold around 20 million of its $400 Quest 2 headsets since 2020 and recently slashed the price of the Quest Pro, its top-end device, to $1,000 from $1,500 amid lackluster sales.

By comparison, Apple sells over 200 million iPhones a year with an average retail price of over $800.

Unlike the iPhone, which incorporates many existing technologies, virtual reality forces Apple and others to design new chips and wearable displays, said Matthew Ball, author of “The Metaverse: And How It Will Revolutionize Everything.” . “The difficulty of the problem was much greater than expected,” he added.

Uncertainty about the potential of Apple’s project has led some people who worked on it to speculate that the company might delay its release, especially in light of the faltering economy, those people said. The company has delayed other new products in the past, including AirTags, the coin-sized location tracking devices, which Apple held back for more than a year to address privacy concerns. . But at this point, manufacturing of the helmet is underway for an expected reveal in June, the people said.

Apple is expected to ship less than 500,000 headsets per year, according to Counterpoint Research, a market research firm. By comparison, the company was expected to ship around 40 million Apple Watches after its debut. Modest expectations for the headset speak to challenges in a category where sales fell 12% last year to $1.1 billion, according to NPD Group, a market research firm.

Seeking to define an emerging market is an aberration for Apple.

“Apple is always pretty good at entering a market when the market is already established and changing that market,” said Carolina Milanesi, consumer technology analyst for research firm Creative Strategies. “This is not the case for Apple VR and XR. There is still a lot to learn.”

Some internal skeptics wondered if the new device was a solution in search of a problem. Unlike the iPod, which puts digital songs in people’s pockets, and the iPhone, which combines the capabilities of a music player and a phone, the headphones weren’t driven by the same clarity, these people said.

The product was born during a period of limbo. This year, Mr. Ive’s successor overseeing industrial design, Evans Hankey, left. With evolving design leadership, Mike Rockwell, an engineer, led the development of the device.

The helmet looks like ski goggles. It features a carbon fiber frame, a fanny pack with battery holder, exterior cameras to capture the real world, and two 4K displays that can render everything from apps to movies, two of the people said. Users can activate a “reality dial” on the device to increase or decrease real-time video of the world around them.

The New York Times has already reported on some features, as have Bloomberg and The Information.

The headset is expected to cost around $3,000, three people said. And it’s seen as a bridge to a future product, like augmented reality glasses, that would have wider appeal but require technical breakthroughs.

Because the headset doesn’t fit over the glasses, the company plans to sell prescription lenses for screens to people who don’t wear contacts, a person familiar with the plan said.

During the development of the device, Apple strove to make it excellent for video conferencing and spending time with others as avatars in a virtual world. The company called the device’s signature app “copresence,” a word designed to capture the experience of sharing real or virtual space with someone in another location. It’s akin to what Facebook founder Mark Zuckerberg calls the “metaverse.”

The device will also serve as a tool for artists, designers and engineers, tracking them as they draw freely in space in image editing applications and tracking hand gestures for editing. virtual reality movies. Finally, it will function as a high-resolution TV with custom video content from Hollywood filmmakers such as “Iron Man” director Jon Favreau.

Apple is expected to present its device as something different from the ones Meta has introduced. In an interview last year with Dutch publication Bright, Mr Cook said he avoided using the term ‘metaverse’ because it was foreign to the average person.

The headset’s price and applications suggest it will appeal more to businesses such as design firms than most of the billion iPhone owners. Apple got rich by selling smartphones that were expensive but still balanced price with utility.

Mr. Ball, the author of “The Metaverse”, compared the company’s strategy with this device to Tesla’s strategy with the Roadster, its initial $100,000 electric vehicle. Eventually, Tesla followed suit with lower-priced cars with broader appeal.

Ms Milanesi said Apple’s experimental approach to the glasses was more like its execution of the Apple Watch than its introduction of the iPhone. Apple initially described the watch as a miniature extension of an iPhone. After learning what consumers were doing with the watch, the company marketed it more as a fitness accessory similar to a Fitbit.

“It’s not very Apple-like,” Ms. Milanesi said. “But Apple is a very, very different company.”