Yahoo Finance Why Apple’s headset could seriously boost the flagging VR market
The virtual reality (VR) market didn't have a great 2022, but if Apple's (AAPL) long-rumored headset drops this year, some analysts say it could send VR barreling toward mainstream consumers.
In 2022, sales in the VR market were down about 2% year-over-year to $1.1 billion, according to research from NDP, while Meta (META) has reportedly struggled to retain consumers' interest in its new Meta Quest Pro, cutting prices just last week. However, if Apple enters the market this year as they're expected to, it could start to change how the general public views VR.
"In VR, we haven't hit that hockey-stick moment yet, where this is just going to just take off like we saw with smartphones," said IDC Research Director Ramon Llamas. "We're not yet at the place where people look at this and say, 'Wow, I just want to put that on,' but Apple just might help create that hockey-stick moment."
Llamas believes that the combination of Apple's design capabilities and far-ranging ecosystem could welcome new consumers into the market.
"Apple is perhaps the most trusted brand in the tech industry, and it's in Apple's DNA to make things so gosh darn easy to use," he told Yahoo Finance. Additionally, Apple's "broad ecosystem of devices and applications and services" could provide a wide variety of entrance points for consumers, as they move back and forth seamlessly between between, say, Apple TV and applications from their Apple Watches or iPhones.
"How would you like to watch Apple TV on your VR headset? There's a certain flow there that could add up," said Llamas.
'That's where the battle's really going to begin'
If Apple's headset indeed hits shelves this year, it'll undoubtedly shake things up for VR's incumbent leader, Meta (META). Currently, Meta has a staggering 82% grip on the VR market, according to IDC.
"Meta is the obvious market leader in VR and very advanced in terms of building a compelling B2C and B2B ecosystem – the Meta-Microsoft partnership is an example," said Rolf Illenberger, managing director at virtual reality software provider VRdirect. "However, Meta is facing an uphill battle, when it comes to acceptance by enterprise customers. Apple already knows this market and leveraged their smartphone business in the B2B space. Meta will continue to be the market leader, but the competitive dynamics will grow."
Those dynamics could potentially evolve into a full-fledged standoff between Apple and Meta over time.
"Once Apple's headsets get to cycle two or three when we're past the 'warts-and-all stage,' we'll be able to go feature-by-feature and ask who's doing it best," said Llamas. "That's where the battle's really going to begin."
However, that's likely years in the future. Fundamentally, VR's still in early innings.
"A VR-related Apple announcement will definitely help the VR market, but there are some big hurdles (lack of depth and breadth of content, convenient and accessible devices and experiences, and usability) that VR need to overcome that can’t be addressed by a single vendor," said Gartner Director Analyst Tuong Nguyen. "Apple can certainly add to the momentum, but it will need to be a concerted industry effort."
"There’s still a big gap between what we want and some are promising versus what it can actually deliver," Nguyen added.
Allie Garfinkle is a Senior Tech Reporter at Yahoo Finance. Follow her on Twitter at @agarfinks and on LinkedIn.
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