Apple’s mixed reality headset won’t replace your iPhone, not at the moment anyway

In development for seven long years, the headset — conceived and designed under CEO Tim Cook — will heavily lean on mixed reality: a type of technology that blends physical and virtual reality to produce a new environment. Mixed reality does not take place in the physical or the virtual worlds, but is a hybrid of both.

“If Apple believes its brand and developer ecosystem is ready to build exceptional new experiences on top of the device then it will start executing its strategy and enter the market,” explains Thomas Husson, VP and Principal Analyst – Marketing & Strategy at Forrester research. “I think it will take years before it scales up but is a way to maintain the innovation leadership.”

There’s constant chatter on forums and social media that Apple needs a headset – which heavily relies on mixed reality to reduce its dependency on the iPhone. But this is not a good enough reason to trigger a whole new product category… there’s more to that.

The headset will reportedly feature high-definition screens in front of the user’s eyes. (Image credit: Apple headset concept by Industrial Designer Marcus Kane)

The iPhone single-handedly changed Apple’s fortunes and made it one of the richest companies in the world. In a decade and a half, the iPhone and its sales mechanisms have matured to such an extent that even if Apple launches a new model without any fanfare, it will still sell in the millions. But very few other products that sold along with the first iPhone are still available in the market. For Apple, it is not easy to move on from the iPhone as it did with the iPod because a lot of the companies revenues still come from this one product — iPhone sales accounted for just less than half of Apple’s quarterly revenue, according to its Q2 earnings report released May 4.

Consumers might no longer line up at Apple Stores to get the new iPhone but that doesn’t mean people have stopped buying iPhones. Lately, the demand for the iPhone in many Asian markets, especially in India has skyrocketed so much that Apple has increasingly made both retail and manufacturing-related investments.

Perhaps the biggest reason why the iPhone is still around is the stickiness of the device and how it plays a central role in the Apple ecosystem. If you haven’t noticed, the iPad is a big-screen iPhone while the Apple Watch is an iPhone on the wrist. The Apple headset, whatever it will be called, will make users peer into a screen that reminds them of the iPhone but lets them watch an immersive 3D video, do interactive workouts, or chat with realistic avatars through an updated FaceTime.

Apple’s mixed reality headset has been in the works for seven long years. (Image credit: Apple)

But it is not yet clear how this new form of interactive goggles will impact the smartphone domain dominated by Apple. For now, though, the XR market which also includes virtual and augmented reality devices is at an experimental stage. Apple’s headset is likely suffering from the same problem that plagued other VR and AR headsets: most people do not want to wear bulky headsets and get cut off from the real world around them. The slow sales of VR headsets are proof that consumers aren’t convinced with existing headsets. The question is if Apple can change that.

At around $3000, the high price of the device will appeal more to developers and early adopters who write software and develop apps. With that in mind, it becomes clear that Apple’s mixed reality headset is not intended for average users. Hence, don’t expect to find any references to this being an iPhone replacement during the carefully calibrated WWDC keynote on Monday.

Apple’s debut of mixed reality could very much begin the conversations around the fate of mobile in a new world where interactions require the use of eye-tracking and hand-tracking technology rather than a touch-screen. But before that, Apple needs to answer whether or not a headset is a better way to interact with others than a phone.

Nguyen explains: “The biggest challenge is the experience it delivers – will there be enough compelling, unique content and experiences that will make people want to adopt this device and experience compared to what they already have with other end-point computing devices.”