Apple Enters the AR/VR Device Market:
Will this be an iPhone moment or just
another device in a crowded field?
Altman Solon is the largest global TMT strategy consulting firm exclusively dedicated to the
Telecommunications, Media, and Technology sectors. This article explores how Apple’s first virtual
reality headset, the Vision Pro, competes in the existing AR/VR marketplace and what retailers,
content providers, insurance providers, and carriers should know to navigate the changing market.
The virtual and augmented reality market has but the device never had significant commercial
experienced uneven growth and its share of flops success. Magic Leap reached a $2 billion valuation
over the past decade. Still, with name-brand in 2021, only to abandon the consumer market in
companies focusing more on monetizing consumer 2023 and shift focus to enterprise. More recently,
access to new digital worlds, market realities Meta has been investing heavily in its Metaverse
may be changing. Global technology giants are concept and has built out an ecosystem to match
introducing new products and functionalities but appears to be putting that concept on the
that transcend what once was impossible for backburner to focus on AI.
consumers and businesses interacting in a virtual
world. With innovations dating back nearly half a With the confetti is still settling after Apple’s
century, when the first true VR interface, Sword of announcement, it is too early to predict how its
Damocles, displayed virtual wireframe shapes to new headset will affect the AR/VR device market.
its users, AR/VR has evolved to include realistic Apple’s long history of transforming consumer
haptic feedback, ultra-responsive imagery, and hardware such as PCs, mobile phones, watches,
immersive virtual experiences. and headphones, suggests that the world’s largest
tech company can be a big player in bringing AR/
The evolution of virtual reality has come in waves, VR to the masses. However, Apple is entering a
with its fair share of peaks and valleys, usually crowded market that already includes other tech
driven by leading technology firms. Google made giants, like Meta and Sony, that have spent years
a splash with Google Glass nearly 10 years ago, investing in this promising technology space.
Evolution over Revolution: The Fragmented
AR/VR Device Landscape Today and Where
Apple Would Play
According to findings from Grand View Research, With its $3,499 starting price tag, Apple’s Vision
the global virtual reality headset market reached Pro is expected to straddle the line between the
$7.77B in 2022 but is expected to grow to nearly ‘’Mainstream Premium’’ and “Ultra Premium”
$60B by 2030, with a CAGR of 30.6%.1 There are categories of AR/VR products, with a focus
several prominent products at the forefront of on consumer products. While there are more
virtual, mixed, and augmented reality headsets, advanced – or “Ultra Premium” – devices, such as
including the Meta Quest Pro, Microsoft Hololens, Varjo XR and Microsoft HoloLens that are targeted
HTC Vive, and Nreal Air. Each has its strengths in towards enterprise, Apple’s device appears to be
hardware, features, and interactive functionalities. more consumer-focused.
The AR/VR Headset Market
Price vs. Capabilities
Note: VR headsets typically focus on fully simulated environments shown on screens without optical passthrough; AR
Devices focus on showing images projected onto glass frames over real-world objects without the ability to cross-
interact; on MR Devices, the user interacts with both virtual & real-world objects through the lenses.
The Elephant Enters the Room: Apple’s $3,499
Vision Pro
Apple’s first virtual reality headset is targeting the alongside other household names like Microsoft
high-end consumer market. While priced at the and Meta in early 2024. It will likely compete closely
high end of virtual reality headsets, the Vision Pro with Meta’s Quest Pro for consumer dollars. While
offers high-tiered hardware and software, along both devices offer similar hardware with a good
with integration in Apple’s App Store. The Vision selection of software, Meta’s headset comes at
Pro will feature eye and face tracking, iris scanning a fraction of the price of Apple’s product. Meta is
authentication, and device continuity – syncing also doubling down on their price advantage in
across other Apple products like the iPhone, iPad, advance of the Vision Pro launch: just days before
and Mac. Apple’s announcement, Meta previewed the Meta
Quest 3, a consumer headset, available this fall for
Apple’s Vision Pro is expected to hit the shelves $500.
Apple’s Vision Pro: AR Product Comparison
Price Scale: Low: $200-500, Mid: ~$1,000, High: $3,000+
Apple’s entry into the AR/VR market poses AR and VR emerge? What considerations should
strategic questions for the ecosystem’s future. Will retailers, content providers, insurance providers,
the Vision Pro drive competition among existing and carriers keep in mind as they navigate this
industry players? Will new consumer use cases for changing market?
Business as Usual or Shock to the Ecosystem?
Considerations for Key Market Players
As Apple enters the mainstream consumer market • Carriers: Seamless interactions with the virtual
for AR/VR headset devices, these are the key world through AR/VR devices are heavily
factors for industry players to understand the dependent on high-speed, efficient networks.
potential market impacts: As AR/VR device adoption boosts traffic on
global networks, carriers will need to anticipate
• OEM/AR/VR Developers: Apple has historically the increased strain on their systems and
disrupted product categories within the manage their networks effectively for content
technology space. From smartwatches delivery on top of existing network load. Would
to headphones, Apple’s entry into these this be another use case for 5G technologies
categories has threatened the incumbent like Mobile Edge Compute or new monetization
companies with innovative products and models?
software offerings. While it is difficult to make
the same call at the launch of the Vision Pro, • Retailers: The Vision Pro headset will now find
AR/VR/OEM producers are left to prepare for space on the shelves alongside the Quest Pro
Apple disrupting yet another product category. and Hololens 2. As these products compete for
How should they evolve their current product consumer dollars, retailers must consider how
and service offering to stay ahead of the curve product placement and advertising of these
and remain competitive among brands with similar products boosts sales and competition.
strong consumer loyalty? How should these competing products be
marketed and positioned toward consumers
• Developers: This could represent a significant ready to invest in a new VR device?
opportunity for developers to make software
for a major new platform, however refining • Device Insurance Providers: Given the higher
software for a complex device like the Vision price of Vision Pro and many other AR/VR
Pro with much more interaction methods could devices, device insurance costs will likely be
mean longer development and testing cycles. much higher than smartphones to ensure that
devices with complex hardware and software
• Content Providers: With this new device on the are thoroughly protected. How should providers
market, content providers must ensure their rethink their insurance packages and financing
existing content delivers a seamless consumer options for consumers purchasing new AR/VR
experience in this new format and consider devices?
any renegotiation of licensing rights with
Apple. Should providers develop new content
specifically for this device?
Preparing for the Future of AR/VR
Apple’s Vision Pro is likely to spur competition players, and Altman Solon is helping clients
and fuel new use cases for the industry over the understand what these changes mean for their
coming months and years. This product launch product roadmaps and service offerings.
has several potential implications across industry
Leadership & Oversight
Kevin Wang
Director, San Francisco
[email protected]
END NOTES:
[1] Grand View Research, ‘’Virtual Reality Headset Market Size, Share & Trends Analysis Report By End-Device (Standalone, Smartphone-enabled), By
Application, By Region, And Segments Forecasts 2023-2030,’’ 2023
