Apple’s new VR/AR headset risks being delayed until 2023

NEW YORK (BLOOMBERG) – Apple is considering pushing back the debut of its mixed-reality headset by at least a few months, potentially delaying its first major new product since the Apple Watch in 2015, according to people familiar with the situation.

The headset – a high-end device that blends virtual and augmented reality – was targeted for an unveiling at Apple’s annual Worldwide Developers Conference in June, followed by a release later in the year. But development challenges related to overheating, cameras and software have made it harder to stay on track, said the people, who asked not to be identified because the matter is private.

That could push the announcement until the end of 2022 or later, with the product hitting shelves by 2023, the people said. A spokesman for Cupertino, California-based Apple declined to comment.

Apple shares, which had been up about 1 per cent Friday (Jan 14), retreated on the news, dipping as low as US$171.68 (S$231.49). The stock gained 34 per cent in 2021, outpacing the S&P 500 Index.

The delay would mark a setback for a product seen as one of Apple’s famous “next big things” – a new category that can keep sales growing and help justify the tech giant’s nearly US$3 trillion market valuation. The company has not discussed the headset publicly, but the product has been years in the making and already delayed before.

Apple had previously planned to introduce the headset in 2021 and ship it this year, according to other people with knowledge of the matter. The company has been developing the device since around 2015 and is counting on it to be the first of many headsets that could eventually replace the iPhone a decade from now. The hope is to create products with more appeal than current augmented reality goggles, which let users superimpose data and imagery on top of real-world views.

Past AR headsets, such as Google Glass or Magic Leap, have either been fringe products or flops – and have drawn ridicule for making users look creepy. VR headsets, meanwhile, have been more successful. Devices from companies like Meta Platforms shut out the real world and immerse users in a digital reality – setting the stage for the so-called metaverse. But even VR has not caught on much beyond a core group of gamers.

Apple’s product would combine both technologies in one device, letting the company plant a flag in the still-nascent industry. The headset is not expected to be an iPhone-like hit from the start – it will be an expensive niche item – but the device may set the stage for bigger moneymakers in the years ahead.

The challenge is getting such a product to customers. Apple recently informed supply-chain partners that the device probably will not be released until 2023, according to the people familiar with the discussions. However, it is still pushing vendors to have units available at the end of this year so that they are ready for the roll out.

Apple is planning to focus its 2023 developers conference on building virtual and augmented reality apps for the device, which will have an App Store, according to the people.

It is also laying other groundwork for the headset. That includes building in support for the device in iOS 16, codenamed Sydney, a new version of the iPhone’s operating system that is set to be unveiled in June.

That means Apple could still theoretically preview technical aspects of the headset or its software, without showcasing the full device, as early as this year’s developer conference. When it ships the product, Apple will face immediate competition. Meta, formerly Facebook, is working on its own mixed-reality headset, known as Project Cambria, that is likely to be cheaper than Apple’s. Apple has weighed price points north of US$2,000 for its headset because of the inclusion of powerful chips, high-resolution screens and new audio technology.

Today’s consumer VR market is led by Meta’s Quest 2 headset and products from HTC, with both companies developing ecosystems of content and developer support around their hardware.