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Rumors and speculation continue to swirl around Apple’s (AAPL) plans for its entry into the world of AR/VR, with a multitude of hardware and options ranging from a relatively expensive (neighborhood of $3,000) and/or a low-priced alternative to compete with mass market VR headsets such as the Oculus (FB) Quest 2 or the Pico (pvt) Neo 3. Apple’s entry into the AR/VR market will be a watershed event for the industry, but we see a trend that will blur the lines between AR and VR over the next year or two. Currently there is a distinctive difference between headset designs for AR and VR, with AR headsets trending toward almost normal looking eyeglasses and VR headsets still more massive and obtrusive. The technology behind AR was developed to combine the user’s view of the outside world, and an artificial image that can be superimposed on a normal visual image. VR systems do not use external visual images, and in fact, require a darkened, enclosed space inside the headset to be fully effective.
This dichotomy is obvious in most cases but we have noticed that both VR and AR headset developers are more extensively looking over their shoulders and wondering if they each might be missing out on something. In the vase of AR, we have seen a few systems that include technology that can darken the image an AR user sees, emphasizing the artificial overlay and reducing the impact of the pass-through image. As the display overlay systems become more sophisticated in AR headsets, it seems AR developers are trying to gain at least some access to VR, albeit in a rudimentary way, as the AR market develops broader applications.
The same seems true for VR, where a number of systems either allow the user to remove the light blocking cover typically seen on VR headsets, which allows the system to function like an AR device, at least in a limited capacity and other systems use pass-through cameras to mix the outside world with VR. While it might seem that giving a VR headset the ability to be used for AR is overkill, we expect the VR case is more likely used to allow a VR user the ability to intermittently ‘see’ someone or something in the user’s location, without removing the headset, but we expect the trend toward such mixed use devices will continue, making data collection a bit more difficult as AR and VR devices move toward each other’s home ground.
We believe both AR and VR headset developers will continue to improve this ‘mixed reality’ feature set and over the next two years, while there will still be dedicated AR and VR headsets, a greater number of new releases will gravitate toward becoming mixed reality devices, in order not to miss an unexpected growth path of application classification, and while Apple’s entry into the space seems to be inevitable, we expect Apple will be careful not to limit their market specifically to AR or VR. Perhaps that might not be the case with the company’s first AR/VR iteration, but we believe Apple is smart enough not to pick a side and hope that consumers agree.
This dichotomy is obvious in most cases but we have noticed that both VR and AR headset developers are more extensively looking over their shoulders and wondering if they each might be missing out on something. In the vase of AR, we have seen a few systems that include technology that can darken the image an AR user sees, emphasizing the artificial overlay and reducing the impact of the pass-through image. As the display overlay systems become more sophisticated in AR headsets, it seems AR developers are trying to gain at least some access to VR, albeit in a rudimentary way, as the AR market develops broader applications.
The same seems true for VR, where a number of systems either allow the user to remove the light blocking cover typically seen on VR headsets, which allows the system to function like an AR device, at least in a limited capacity and other systems use pass-through cameras to mix the outside world with VR. While it might seem that giving a VR headset the ability to be used for AR is overkill, we expect the VR case is more likely used to allow a VR user the ability to intermittently ‘see’ someone or something in the user’s location, without removing the headset, but we expect the trend toward such mixed use devices will continue, making data collection a bit more difficult as AR and VR devices move toward each other’s home ground.
We believe both AR and VR headset developers will continue to improve this ‘mixed reality’ feature set and over the next two years, while there will still be dedicated AR and VR headsets, a greater number of new releases will gravitate toward becoming mixed reality devices, in order not to miss an unexpected growth path of application classification, and while Apple’s entry into the space seems to be inevitable, we expect Apple will be careful not to limit their market specifically to AR or VR. Perhaps that might not be the case with the company’s first AR/VR iteration, but we believe Apple is smart enough not to pick a side and hope that consumers agree.
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