Senior industry executives say Apple’s entry into virtual reality is a ‘watershed moment’

Welcoming competition for the US tech giant, CEOs of some of the major players in the augmented and virtual reality space said the debut of Apple’s mixed reality headset marked a “watershed moment” for the industry.

Apple launched its Vision Pro headset at its annual WWDC event on Monday, ending months of speculation that the Cupertino tech giant is preparing to launch its own VR or augmented reality product.

Cher Wang, CEO of Taiwanese tech giant HTC, told CNBC that she sees Apple’s move as validation for the industry. HTC has long been a mainstay of the virtual and augmented industry, breaking out of its struggling smartphone business several years ago to focus on the Vive headset division.

“Apple’s entry into the market is a watershed moment for the industry, validating everything HTC VIVE is working on,” she told CNBC. “This will increase confidence in the global virtual reality market.”

However, she added that the “closed” nature of Apple’s services ecosystem — which is more restrictive when it comes to the platforms and devices through which users access its services — is problematic.

“Apple has historically used a closed ecosystem for its iOS products and content distribution platforms, which can be straitjacketing developers in a new value chain. If developers are locked into one ecosystem, it’s difficult for them to maximize their reach.”

Apple says Vision Pro will allow users to see apps in a new way in the spaces around them. Users can use their eyes and hands to navigate through apps and search with their voice.

Using the headset, users can watch movies, including 3D with spatial sound, view their photos or videos, and play video games. It can also be used to work through video conferencing applications such as Microsoft Office tools and Adobe Lightroom.

The Vision Pro will run on VisionOS, a new spatial computing platform designed specifically for the company’s new headsets to enable developers to build apps as they do for iOS on the iPhone. It will be available starting at $3,499 starting early next year.

The public’s reaction to Apple’s AR headset was certainly more muted than it was to other announcements from the company earlier in the day, including new features for the iPad and Apple TV’s Siri Remote.

“The next paradigm shift will happen when these devices are fully integrated with 5G technology, and they stream content from the Cloud Edge network,” Wang told CNBC.

“HTC VIVE has already invented this technology, and we will lead this paradigm shift in the near future.”

HTC has shifted over the years from expertise in smartphones to an increasing focus on virtual reality, as it struggled to win traction in the highly competitive handset market.

In 2018, the Taiwanese company sold most of its smartphone business to Google for $1.1 billion.

The virtual reality industry has always struggled to be taken seriously, with consumers primarily viewing it as a way to play casual games rather than as a device built into their daily lives.

Meta, formerly Facebook, has centered its entire future on the idea that people will participate in virtual worlds through VR products like the Meta Quest line of headsets and the social game Horizon Worlds VR, in a network of vast virtual worlds known as “Metaverses”.

But Meta hasn’t yet found wide commercial appeal for its product — it loses billions of dollars on its technology investments every year.

Sales of virtual reality headsets have been underperforming lately, especially as consumers grapple with a sharp rise in the cost of living.

Research group NPD Group told CNBC last December that sales of VR headsets in the United States fell 2% in 2022 from a year earlier, to $1.1 billion.

It’s considered a surprise launch for a company like Apple, which is usually stuck waiting for a product to get mass approval before it enters a product category.

However, industry executives said the launch marked a major milestone in the emerging mixed reality market.

It points to how likely Mixed Reality is to have more viable use cases on the business facing side, said Urho Konttori, chief technology officer at Finnish Varjo, in an emailed comment.

“Apple’s entry into the XR with Vision Pro is an important moment for our entire industry,” said Conturi.

“Mixed reality is already a staple of the enterprise sector, and the innovative technologies Fargo pioneered have changed the way the world’s largest companies operate, train, design, research, and collaborate.”

He added, “We hope that today will be a turning point for consumers as they start to be a part of their daily lives as well, with promising applications for entertainment, personal productivity, and communication.”

“Although it won’t launch until early 2024, we expect Vision Pro to change the spatial computing sector, thanks to some of Apple’s design decisions and innovative vision,” said Liu Gebi, an analyst at CCS Insight.

He added, “Virtual and augmented reality (VR and AR) has been through a period of intense scrutiny and skepticism lately, but if one company has the star power to revive the sector, it’s Apple.”

— CNBC’s Kif Leswing, Ashley Capoot, and Rohan Goswami contributed to this report.