Apple recently demonstrated its mixed-reality headset to its Top 100 executives, marking a significant milestone ahead of the product’s public release in June. The demo was an opportunity for the mixed-reality team to showcase what could be the next major platform beyond the iPhone, iPad, Mac, and Apple Watch. The Top 100 has seen glimpses of the headset since 2018, but this demonstration took place in the Steve Jobs Theater, indicating a forthcoming public unveiling. Mixed reality is a nascent area, and Apple’s push into this new market is riskier than its previous attempts to establish new beachheads. The headset’s starting price will be around $3,000, lacks a clear killer app, and the external battery requires frequent replacement.
Apple executives are taking a realistic tone as they understand that the device will not be a hit product right out of the gate, but it could follow a similar trajectory as the Apple Watch. The company expects that the device’s first version will be a dud next to its existing products, although it is likely to make Apple the market leader in mixed reality within a few months. In terms of unit sales, the best hope for the headset is a similar outcome to the Apple Watch.
Executives expect consumer interest to grow when subsequent headset models arrive, including a half-priced version and a successor to the first model with far better performance. Apple is preparing to sell about one million units of the Reality Pro or Reality One in its first year, generating roughly $3 billion in revenue. It’s hard to compare the headset’s potential success to the Apple Watch, as the latter is included in the wearables, home, and accessories division, alongside other gadgets. However, the wearables division has grown from $10 billion when the Apple Watch debuted to $41.2 billion in the latest fiscal year.
The headset is a riskier move for Apple, but the company believes that it can make it the market leader in mixed reality. Despite being a slow starter, the Apple Watch has now become a centerpiece of Apple’s strategy, and the company hopes the headset follows a similar path.