To The Moon

Apple unveiled its long-awaited “mixed reality” headset on Monday. The gadget, called Vision Pro, will be available “early next year”. It combines virtual reality with augmented reality, which overlays digital images on top of the real world.

Apple said it would sell for $3,499, even more than most analysts had expected and nearly 12 times the price of Meta’s Quest 2, the biggest-selling VR headset.

Apple shares hit a record high ahead of the announcement, as the headset was unveiled, the shares ended the day 0.8 per cent lower at $179.58. How many people will actually buy this $3,499 device?

After a burst of interest during the pandemic, headset sales tumbled in the first quarter of this year, with the overall AR/VR headset market declining 54.4% year over year.

Revenue from Meta's Reality Labs segments, which includes headset sales, declined 50% in the most recent quarter compared to the year prior.

That puts Meta well behind on a trajectory once imagined for the unit. One Meta executive predicted in 2018 that the company's metaverse would reach 100 million hardware units within a decade, half of which would be Meta devices.

"Between now and the end of the year, there will be a slowness," said Jitesh Ubrani, a research manager who tracks the virtual reality market at IDC. "VR to date has been largely built around gaming. And I think gaming will still remain the dominant use case even going forward."

In March, Meta cut the prices of most of its existing Quest headsets in hopes of stirring demand, after raising the price of its entry-level Quest 2 128 GB version in July 2022.

Its high-end Meta Quest Pro now retails for about $1,000, down from a launch price of $1,500, and the Quest 2's 256 GB version now starts at about $430, down from $500.

Meta's Quest 2 and Quest Pro devices comprised nearly 80% of the 8.8 million virtual reality headsets sold in 2022, according to an estimate by market research firm IDC.

Far behind in second place at 10% market share was the Pico device by Chinese-owned ByteDance, which also owns social media competitor TikTok.