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Mixed Results. Hi everyone. We talk a lot about how technology companies shape the world around us. But for every iPhone or Walkman, there’s a parade of hyped fads that failed to live up to their promise. And there’s no better example than virtual and augmented reality.
For years now, VR and AR upstarts have been promising “revolutionary”…and delivering niche. Despite billions of dollars in investment, no company has yet created a headset—or glasses—that have garnered mass appeal. Now, as soon as next month,
Apple
(ticker: AAPL) is looking to change that, with the heavily speculated release of new alternative reality goggles.
The history has left us skeptical. Like flying cars and robot butlers, Americans have been dreaming about the mass rollout of mixed reality goggles for decades. Chasing the hype has led to famous flops, like
Nintendo’s
(NTDOY) Virtual Boy and Google Glass. Though the latter drew wall-to-wall coverage, it never found its market. Not even a pivot to businesses could save it:
Alphabet
(GOOGL) has said it will stop supporting its Glass Enterprise Edition as of September.
Then there’s
Facebook.
Nine years ago the company paid $2 billion for VR headset maker Oculus. “Oculus has the chance to create the most social platform ever, and change the way we work, play and communicate,” Facebook founder and CEO Mark Zuckerberg said at the time.
Zuckerberg echoed that sentiment in 2021, when he unveiled the Facebook parent company’s rebrand to Meta Platforms (META), routing billions of dollars in investments toward its metaverse-focused “reality labs” segment.
Fast forward to 2023, and investors are more excited about cost cuts and artificial intelligence than anything VR related that’s come from Meta’s loss-leading reality labs segment. Its flagship metaverse app, Horizon Worlds, had fewer than 200,000 monthly active users in the fall, according to a report from The Wall Street Journal.
Meta’s Quest headsets feature some fun games, but most of my experiences with the Quest have ended in nausea. As my colleague Tae Kim has written in this newsletter, Quest lacks a killer app that justifies dusting off the headset and dealing with even mild discomfort.
Tech site the Verge, citing a staff meeting, reported in February that Meta had sold 20 million Quest headsets to date. That would put it between Nintendo’s Wii U and GameCube, both widely viewed as flops in the videogame industry. The price of the Meta Quest Pro was recently slashed to $999.99 from $1,499.99, but that’s still a high ask for a headset that can barely muster two hours on a single charge.
Microsoft
(MSFT) made similarly bold proclamations about its HoloLens project in 2015. The firm demoed a version of Minecraft in VR and AR, and talked up the device’s massive potential.
“Our vision for holographic computing is to transform the world with holograms—seamlessly connecting the digital world with real life,” the company said in a blog post.
The company noted that the HoloLens weighed “significantly less than the average laptop,” as if that’s a reasonable comparison for a device you wear on your face.
Far from transformative, these days HoloLens is focused on businesses, and rarely warrants a mention in Microsoft’s quarterly earnings reports. Bloomberg reported in February that job cuts in the HoloLens unit called into question whether the firm would produce a third iteration of the device, aside from a version built specifically for the U.S. Army. Microsoft said in a blog post in February that it’s committed to the HoloLens 2 device and the mixed reality space.
We’ve barely scratched the surface on consumer VR flops. Magic Leap, the buzzy but secretive start-up that has raised $3.5 billion, according to Crunchbase, has pivoted its pricey headsets to businesses. Saudi Arabia’s public investment fund has a controlling stake in the firm. Snap’s (SNAP) Spectacles are seen more in headlines than they are in the wild, though the firm has seen success with AR implementations in its
Snapchat
mobile app.
This is the backdrop against which Apple CEO Tim Cook is widely expected to unveil his firm’s take on mixed reality hardware at its Worldwide Developers Conference in June.
To be sure, it wouldn’t be the first time Apple takes a promising but flawed piece of tech and designs a form factor that suddenly makes sense for the average consumer.
But it will take a lot of Apple Magic—or at least significant battery and chip improvements—for the firm to pull this off.
This Week in Barron’s Tech
Write to Connor Smith at [email protected]
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