Apple (AAPL 0.01%) is rumored to be debuting a mixed reality headset (combining augmented reality and virtual reality) at its Worldwide Developer Conference in June, and it has reportedly already shown the device to its board of directors. Meanwhile, Alphabet's (GOOG 0.21%)(GOOGL 0.41%) Google announced recently that it is scrapping the enterprise version of Google Glass, years after the company abandoned efforts to get Glass off the ground as a consumer product.
With Google leaving a market just as Apple is about to enter it, investors are right to wonder if Apple can succeed where Google failed.
I think there are three reasons why it can. Specifically, Apple will take things slowly, the device will likely focus on a niche or two, and Apple already has years of AR experience under its belt. Let's take a closer look at each factor.
Image source: GETTY IMAGES.
1. Apple's slow and steady approach usually pays off
As companies go, Apple is very patient. One aspect of Apple's approach to introducing new technologies is that it's not necessarily the first one to enter a new market -- but when it does enter a new one, it's traditionally very successful.
Apple has had years to examine how Google went wrong with Glass and what is working or not working with other competitor headsets, like Meta Platform's Quest headsets. Knowing the market doesn't mean Apple's device will be a slam dunk, but a good example of this strategy working in the company's favor comes from its Apple Watch.
Sony entered the smartwatch market in 2012, followed by Pebble in 2013, and rival Samsung launched its Galaxy Gear watch that same year. Google's Moto 360 watch followed a year later. By comparison, Apple was very late to the game when it launched the Apple Watch in 2015.
But Apple took the time to get its product right and understand what consumers really wanted, and now its Watch accounted for 34% of global smartwatch shipments last year and 60% of all smartwatch revenue. Compare that to the second-largest smartwatch maker, Samsung, which holds just 10% of smartwatch shipments.
Patience is Apple's virtue, and it usually pays off.
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Key Data Points
2. The device will likely focus on a niche or two
One of the main problems with Google Glass was that it tried to be all things to all people. Google co-founder Sergey Brin famously wore the device out in public, as did some early adopters. But an always-on (or at least seemingly always-on) headset didn't go over well with the public, and it contributed to the device's demise.
It's unlikely that Apple will repeat Google's mistake. Instead, Apple will probably hone in on a few key features of the device that fit into specific niches. For example, Apple might focus on marketing it as a tool for gaming and communication. The company already has an extensive list of AR-based mobile games that developers may be eager to adapt for a headset experience. Additionally, sensors in the device could reportedly be used for VR-enhanced FaceTime calls.
While Brin's regular use of Glass hinted at Google's device being built for nearly everywhere use, Apple will likely try to sell consumers on a few specific ways users would want to use the device and let its usefulness grow over time.
That strategy has worked for Apple in the past. Again, using the Apple Watch as an example, the company slowly added more advanced features to Watch year after year -- including GPS, cellular connectivity, water resistance, and autonomy from the iPhone -- which helped the Watch evolve. Apple could take a similar approach with its new headset by focusing on getting a few features right the first time and letting the device change over time.
3. Apple isn't an AR novice
And finally, when Google introduced Glass there wasn't a lot of development of AR apps at the time. In contrast, Apple released its ARKit for developers back in 2017, and RealityKit in 2019.
These two systems have given developers and companies years to play around with creating AR/VR apps for Apple's iPhones and iPads, and it's likely been a way for the company to see just how developers could potentially use a mixed-reality headset.
Image source: Apple.
Additionally, Apple has also invested in AR hardware for its devices, including integrating LIDAR sensors into higher-end iPhones beginning in 2020 and then some iPads. LIDAR has allowed users to scan images in the real world and create digital copies of them, take photos and videos with more depth, make accurate measurements, and even scan and create digital models of rooms.
While not all of these features are mind-blowing on their own, when you put them all together it begins to paint a picture of Apple investing in AR hardware and software to gain an understanding of how they'll be used by consumers.
Apple's device could be worth the wait
There's no guarantee that Apple will succeed with a mixed reality headset, but I think Apple's slow and steady approach to AR, along with its years of testing out augmented reality apps with developers, put the company in a much better position to succeed in selling a headset than Google was when it launched Glass.
The benefit for Apple will come from the company's ability to sell devices at a high price -- its headset is rumored to cost about $3,000 -- with lucrative margins. Not to mention Apple's opportunity to have yet another device tapping into its lucrative App Store.
The AR and VR markets will be worth more than $31 billion this year and grow to an estimated $52 billion by 2027. If Apple's rumored headset can succeed where Google failed, taking a lead in this fast-growing market would certainly be worth the wait.
