Could VR Be a Better Short-Term Option than AR for Apple?

I lost count of the products that Apple has been rumored to have canceled, products that, of course, we never knew for sure were coming to market in the first place. The latest one that was covered by the DigiTimes earlier this month is the rumored pair of Augmented Reality (AR) Glasses.

The article seems to refer to project T288 which CNET covered extensively in an article in the Spring of 2018. The headset was supposed to deliver a dual AR and Virtual Reality (VR) experience with an 8K display for each eye. One year earlier, Bloomberg had written along the same lines about project T288 but only referring to having AR capabilities.

Going through Apple’s patents, hires and acquisition, it would be hard to believe AR and VR aren’t at least a hobby in Cupertino.

AR: The Long Game

Over the past couple of years, Apple’s CEO Tim Cook has been very vocal about the opportunity that augmented reality brings to consumers; an opportunity that he deems much bigger than VR mostly because of the pervasiveness of the use cases both among consumer and enterprises.

While the industry is still touting the success of Pokémon Go, the reality is that from a technology point of view, AR is still a long way away from delivering a truly immersive experience. Even early 2020 seems like an optimistic timeframe.

More importantly, I believe that for AR to truly take off, consumers’ acceptance needs to grow exponentially compared to where we are today. What is deemed acceptable in the outside world, or in any space that is shared with strangers is very different from what we feel comfortable doing in the safety of our own home. Just look at how consumers react to digital assistants in the home and outside the home, and the difference in uptake on something that compared to AR is quite simple.

Aiming for a set of glasses that can be comfortably worn for an extended period of times in different environment and light conditions clearly poses some challenges. From the correlation between power efficiency to weight, to the size of the field of view and an aesthetically pleasing design.

The other aspect that we have to worry about with a more widespread use of AR through glasses rather than phones is how laws and regulations will decide to deal with it. Will it be illegal to walk or drive using AR glasses? Will people be concerned about privacy? We have seen similar concerns with Google Glass and Spectacles, with public places banning their use to safeguard customers’ privacy.

It seems to me that even if Apple had a technologically viable solution there are still many question marks that might have driven management to pause. At the end of the day without law and regulation falling into place, Tim Cook’s vision of AR to “amplify human connections” would not come to fruition.

VR: The Content Opportunity

Tim Cook’s view on VR’s potential is not as grandiose as AR, to say the least. At an event hosted by the University of Oxford in 2017, in response to a student’s question about what technologies would prove transformative Mr. Cook said that while he sees AR play a role in education, in consumer, in entertainment and in sport as well as in every business, he thought that VR could do cool niche things, but it will not have a profound impact in the same way AR can.

We are now almost two years on from that interview and while I don’t think Mr. Cook’s views might have drastically changed, Apple, as a company, is in a very different place. We are a couple of months away from the launch of Apple’s TV+ channel and with that the debut of its own content productions.

If I look at the content that was presented during the launch of TV+ I cannot help but think that with such a focus on storytelling, VR might turn out to be very good at making the audience appreciate those stories more and turning the audience from a passive one to an active one. Maybe the connections that are amplified here are not among humans like in the case of AR but those between content and the viewer. Think, for instance, at the opportunity to become a character in the story or to view the story from a specific perspective.

Delivering content in VR could help with differentiation both from competitors, possibly between platform if Apple ever decided to bring Apple TV+ to Windows or Android. VR content could also add to the return on investment to the content subscription by providing extra content without necessarily requiring a brand new investment in a separate production.

Outside of entertainment, I see both VR and AR play a role depending on the use cases. Education and business might want to leverage both, and I expect Apple to want to make both iPhone and iPads the best companions to either experience. From a cost perspective the flexibility for a school to maybe have a handful of headsets that create an experience that brings in tens of iPad and iPhones might be much more appealing to school districts at least as they figure out how to justify the investment and quantify the return on investment.

Ultimately, I have no idea whether or not Apple canceled its rumored glasses or if there were glasses in the first place. What I am arguing here is that if Apple wanted to play in both AR and VR, it might be beneficial to leverage VR as the company ramps up its video content offering. While it might not be profound in augmenting interpersonal connections, it might be profound in augmenting the revenue opportunity.

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Carolina Milanesi

Carolina is a Principal Analyst at Creative Strategies, Inc, a market intelligence and strategy consulting firm based in Silicon Valley and recognized as one of the premier sources of quantitative and qualitative research and insights in tech. At Creative Strategies, Carolina focuses on consumer tech across the board. From hardware to services, she analyzes today to help predict and shape tomorrow. In her prior role as Chief of Research at Kantar Worldpanel ComTech, she drove thought leadership research by marrying her deep understanding of global market dynamics with the wealth of data coming from ComTech’s longitudinal studies on smartphones and tablets. Prior to her ComTech role, Carolina spent 14 years at Gartner, most recently as their Consumer Devices Research VP and Agenda Manager. In this role, she led the forecast and market share teams on smartphones, tablets, and PCs. She spent most of her time advising clients from VC firms, to technology providers, to traditional enterprise clients. Carolina is often quoted as an industry expert and commentator in publications such as The Financial Times, Bloomberg, The New York Times and The Wall Street Journal. She regularly appears on BBC, Bloomberg TV, Fox, NBC News and other networks. Her Twitter account was recently listed in the “101 accounts to follow to make Twitter more interesting” by Wired Italy.

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