Apple is known for launching iconic consumer devices across generations. But not all gadgets remain hits.
Take Vision Pro, Apple's $3,500 mixed reality headset, which launched to much fanfare earlier this year. The company is now reportedly on the brink of discontinuing production after months of sluggish sales.
If this were to happen, it would not be a surprising development. Apple failed to sustain early enthusiasm for the device, which it introduced as a breakthrough in “spatial computing” in areas ranging from immersive video to workplace collaboration to content creation.
A common theme in online discussions and reviews about Vision Pro is that people love it, but don't see many ways to incorporate it into their work or recreational routines. As a result, even those who could afford the device tended to consider it expensive for something that was rarely used.
AR/VR is not yet a hitmaker
Apple's next-best foray into mixed reality computing follows a long path of failed startups in augmented reality, virtual reality, and the metaverse space.
Investors are paying attention. Approximately $758 million has been used to raise funds for AR, VR, and Metaverse-related startups so far this year, according to data from Crunchbase. As you can see in the chart below, this is the lowest annual total in years.
Most of the startups that raised their largest funding during the 2021 fundraising peak have not completed a new equity round since then. This includes headset maker Magic Leap and augmented reality game developer Niantic.
Although funding is down this year, we are still seeing some sizable rounds. The biggest AR-related investment went to Rokid, a maker of augmented reality glasses that raised $70 million in January. Redwood City, Calif.-based Rokid sells products primarily for workplace and industrial use cases, but also offers consumer products.
An even bigger round of funding went to Beijing-based mixed reality glasses maker Xreal, which raised $60 million in a round in January, valuing it at $1 billion. The company is pitching itself as a low-cost competitor to Meta's Quest and Apple's Vision Pro.
Will cheaper devices be available?
In the future, developers of mixed reality devices may focus on lower-cost products, given that expensive products are not selling well.
For example, Apple is reportedly working on smart glasses. The company is also said to be developing a cheaper headset to replace the Vision Pro, which could be released in 2026.
Meanwhile, Meta has partnered with Ray-Ban to roll out its own line of smart eyewear starting at about $300. The company touts features like hands-free calling and photo-taking rather than portals to virtual worlds, but these services could increase consumers' comfort level with wearables.
Despite the setbacks, it may be too early to give up on the vision of widespread wearable headsets and glasses that also serve as portals to more immersive digital experiences. But clearly we're not there yet.
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