According to a client note by Morgan Stanley analyst Erik Woodring, Apple is expected to announce its AR/VR headset at the Worldwide Developers Conference (WWDC) next week. However, the devices are not expected to be available in large quantities until the fall. Production is slated to begin in October, with general availability scheduled just before the December holidays, as per sources within the Apple supply chain.
Woodring’s note highlights several features of the anticipated headset. It is said to have mixed-reality capabilities, allowing users to switch between augmented reality (AR) and virtual reality (VR) modes using pass-through cameras and a dial. The device will incorporate sensors and cameras to track hand gestures and eye movements for device control. The home screen is expected to resemble a 3D iPhone layout and include familiar apps such as Messages, Mail, TV, and FaceTime. Users will also be able to run existing third-party apps. Notably, the outward-facing display will represent the user’s face and facial gestures, enhancing communication experiences.
In terms of sales and revenue, Apple is not expected to provide any data about the new product until Q1 2024. Woodring estimates the price of the headset to be around $3,000, which could present a challenge to mass-market adoption. To entice early adopters, Apple will need to showcase unique usage cases and content partnerships. Woodring’s sources anticipate producing between 300,000 and 500,000 devices this year, with production increasing to 1.2 million in 2024. Sales are predicted to rise as well, reaching up to 4 million devices in 2025.
Woodring expects the mixed-reality headset to become a significant business for Apple, estimating its potential to generate $20–$70 billion per year, accounting for up to 18% of the company’s revenue. He also believes that the new devices will drive increased adoption of Apple services. However, it’s important to note that these figures and predictions are based on the analyst’s analysis and sources, and the actual outcome may vary.
While WWDC will unveil the specifics of Apple’s AR/VR headset, Woodring suggests that it should be seen as the beginning of a larger journey rather than the final product. Additionally, Apple is expected to introduce new Macs, announce new operating systems and services, and showcase evolutions of existing services at the event.
