Meta’s VR Vs Apple’s AR Strategy-Who Will Ultimately Win?
You may not know it, but the tech battle of this century so far is about to begin.
Late last year, Meta’s Mark Zukerberg laid out his vision for what he deemed the Metaverse, with a significant emphasis on VR. In his world, people would work, gather, learn, and play within an immersive 3D VR world. Indeed, with an investment of close to $10 billion, Zuckerberg has bet Meta’s future on VR.
This week at the Meta Developers’ Conference, Zuckerberg also demonstrated a form of mixed reality being introduced with their new Quest Pro headset (priced at $1499) that includes MR/augmented reality capabilities tied to their Horizon workspaces. But his most important vision is clearly focused on VR headsets and delivering immersive experiences within his defined view of a 3D VR world.
Apple has instead put a stake in the ground around AR, where a person can put on some form of glasses and live in a world where information, data, games, etc., are superimposed and visually augmented on top of real-world experiences. In this case, an open environment vs. a closed environment that Zuckerberg has proposed.
In 2017, right after Apple introduced AR Kit at WWDC, I chatted with Tim Cook at a private evening event, where I asked him about his commitment to AR. He said that he believes that Apple delivering AR could be one of Apple’s “biggest contributions” to the world in the future.
Given Apple’s legacy of significant tech contributions with the iPhone, a game changer for the world, Cook’s AR statement was quite sensational.
However, Tim Cook had a bigger vision about integrating virtual digital technology into our natural world not long after Mark Zuckerberg began plotting Meta’s quest (pun intended) to dominate his definition of the Metaverse with an emphasis on VR within a virtual world.
Recent comments by Tim Cook fundamentally reaffirmed what he said to me in 2017.
In an interview published by the Dutch media outlet Bright on Friday, Cook called AR — in which virtual objects are overlaid onto the real world, though glasses or a smartphone — “a transformational technology that will soon be as ubiquitous as a smartphone or the internet.”
“I think AR is a profound technology that will affect everything. . . we are really going to look back and think about how we once lived without AR.”— Tim Cook
To some degree, Mark Zuckerberg has telegraphed a similar thought in that he envisions immersive 3D experiences through personal avatars. These avatars can represent one’s persona in work, in communication, playing and learning within a VR headset that transports an individual into virtual worlds.
Zuckerberg and Meta have bet $10 billion on this venture, and he appears to be betting the company’s future on VR.
Apple also has a substantial investment in its AR strategy. However, given its enormous success with the iPhone, iPad, and Mac, Apple sees AR as a new frontier that will bring more people into its hardware, software, and services ecosystem. So while it is a big bet that, as Cook suggests, will be transformational, in the same way the iPhone was transformational, it is less betting Apple’s future on AR than expanding Apple’s sphere of influence.
While I stated that this might be the battle of the century to date and has major ramifications for both companies, the bigger question I often receive is, who wins this battle? To some degree, both could have winning strategies, but it is clear that millions more people will adopt Apple’s AR strategy than Meta’s VR program.
For one thing, VR headsets will be the most expensive device for delivering Meta’s 3D immersive experience. More importantly, it will probably be a smaller audience that will integrate VR into their lifestyle. To date, VR headsets have gained the most traction with gamers and in vertical markets like manufacturing, field service, medical and industrial simulations.
As the following chart points out, VR’s appeal so far has been generationally driven with older users not being as interested in VR as a younger audience.
Currently, we do not have much intel on AR adoption as very few true AR headsets are available. However, where AR is in use today, it is primarily used in vertical markets such as field service, surveying, and field analysis of physical settings.
As Tim Cook points out, AR, which superimposes information on physical surroundings, will have a much broader appeal. We have already seen how companies like Ikea have used AR Kit apps on the iPhone to superimpose a piece of furniture into an actual room, giving people a glimpse of how AR could work.
Apple’s building an AR headset or glasses that integrate this kind of experience into everyday lifestyles. This delivers enhanced data of physical surroundings and should be much more appealing to a broader audience than a closed VR experience where being stationary will be a key dimension of any VR experience.
In truth, both approaches will find an audience; however, I sense that Apple could sell AR glasses at a 50-to-1 ratio over VR headsets almost from its introduction.
And that may be a low estimate given the feedback I get from people I respect who are looking at the same question about Meta vs Apple’s approach to the Metaverse.
One other thing about Apple bodes well for their entry into the so-called Metaverse. Apple has a history of not inventing new devices or categories, but once they see a new device and category evolve, they enter with a better solution. That includes innovative designs of said devices and includes easy-to-use software and services. For example, Apple did not invent MP3 players yet dominated this market when they entered with the iPod. They did not invent the smartphone, but the iPhone was a world-changing device that still delivers the highest revenue in this category. Moreover, Apple did not invent tablets, but it also delivers the most revenue in this category for Apple.
In that same sense, Apple did not invent VR or AR, but if history is any guide, Apple will innovate with some form of headset that is easy to use that includes apps and services. It most likely will be the bigger winner in the quest to bring the most people into a form of virtual world experiences.
Furthermore, if Tim Cook is correct, Apple’s influence on this part of the market will be transformational, and as he points out, “ We are really going to look back and think about how we once lived without AR.”