Can Apple's MR Headset Supplant iPhone As Its 'Hallmark Product'? Gurman Offers 3 Tips To Avoid A 'High-Profile Flop'

Zinger Key Points
  • Apple will introduce its MR headset at a time it is still a nascent field: Gurman
  • Given it may not be superior to Apple's existing products, consumers are unlikely to pay $3,000 for it, he says.
Can Apple's MR Headset Supplant iPhone As Its 'Hallmark Product'? Gurman Offers 3 Tips To Avoid A 'High-Profile Flop'

Apple, Inc.’s AAPL iPhone continues to be its cash cow, even after a decade and a half after its introduction. Cupertino’s next-big product could give the iPhone a run for its money, according to Bloomberg’s Mark Gurman.

Apple’s Vision For MR Headset: Some Apple managers who are overseeing the launch of the mixed-reality headset think the product could ultimately supplant iPhone as the company’s “hallmark product,” Gurman said in his weekly “Power On” newsletter.

Apple’s vision for the product is hardware that can be worn all day and everywhere, replacing the need to carry a phone or tap away on a laptop, the Apple specialist said. Although pricey, at $3,000 for the initial headset, it would offer consumers a taste of that “tantalizing vision,” he added.

Gurman expects the first MR device, likely dubbed Reality Pro, to launch in 2023. This would come with several new technologies such as dual 4K displays, a flexible OLED screen on the front that shows a user’s eyes and a dozen cameras that can analyze the wearer’s body, eye movements and the external environment, he said.

On the flip side, the MR headset could be impractical and too expensive for most consumers, according to Gurman. Some of the issues he outlined include the device lasting only two hours per charge and not working well outdoors, a design that some find uncomfortable, and the likelihood of a launch with a limited array of content.

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A Strategy Change: When Apple launched its previous hardware products, there was already mainstream interest in the products and the company only needed to produce something better and beat the competition, Gurman said. Since AR/VR headsets are still a nascent field, consumers will have to be coaxed into adoption, he said.

He noted that iPhone sold one million units in the first 28 days of its launch and sold more than 10 million units in its second year, and it sold 15 million iPads in the first eight months. Apple Watch sales touched 10 million in its first year despite launching without a major use case in 2015, he added.

Going by Apple’s plan of producing about one million MR headset units in the first year, it could be one of Apple’s lowest-volume categories, Gurman said.

Since the headset won’t be any better than the iPhone or iPad at most things, except video watching and FaceTime, consumers may not be willing to shell out $3,000 for that, he added. While the company might position Reality Pro as a consumer product, Gurman recommends that it be positioned as a developer prototype.

He also noted that competing products such as Microsoft Corp.’s MSFT HoloLens, costing $3,500 and Meta Platform’s META Quest Pro haven't done well.

“To avoid turning the Reality Pro into a high-profile flop, Apple will probably need to position it as a preview of what’s to come,” Gurman said. The launch should be followed by rapid advancements with the help of outside developers, he said.

If Apple can create experiences that are far better than what’s available on an iPhone or iPad, cut the price by $1,000 and boost its battery life, then the company will definitely be on to something, Gurman said.

Apple closed Friday’s session 1.37% higher at $145.93, according to Benzinga Pro data.

Read next: Apple To Launch MR Headset After 7 Years In Development But Focus May Have Cost Innovation In Other Products, Gurman Says

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