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The latest report from Bloomberg has Apple officially showing off its first MR (Mixed Reality) headset to 100 executives inside the company.

Apple has spent nearly eight years and invested billions of dollars in this. Apple executives have seen demonstrations of the MR headset every year since 2018, but previous demonstrations have only been for the progress of the project, not the full device. The headset is expected to be announced at the WWDC Worldwide Developers Conference on June 5th this year.

Apple executives are not optimistic, saying that the first MR headset will not be a "launch hit" and that the sales curve is likely to be similar to that of the Apple Watch, with consumer interest expected to rise further as the headset iterates and prices come down.

At a time when VR/AR/MR is experiencing resistance, Apple's reputation for creating benchmark products is a great incentive for hardware manufacturers, content developers, the capital markets and the industry chain, and may influence the VR/AR/MR landscape.

The first MR device is controversial

From a combination of information, the first MR device will feature a flexible OLED screen that displays the user's eyes, and it will be equipped with more than a dozen cameras to analyse the wearer's body, eye movements and external environment. Its mixed reality technology combines augmented reality (AR) and virtual reality (VR) technologies, and its core features include a 3D version of FaceTime calls, immersive video, multi-device connectivity between Apple's ecosystem and MR content.

Apple has always been very good at entering a market when it's already established and changing it to beat the competition," said a consumer technology analyst at research firm Creative Strategies.

But MR devices are still an emerging field, meaning Apple needs to not only build a good product, but convince consumers to buy it. Apple has a long history of being the best at bending the rules, and it will take time and the market to see how well it does with its "first forays" into new areas.

The market position, outlook and pricing for Apple's mixed reality headset are all rather vague, and Apple employees have raised a number of questions about the first MR headset, including the following:

- An overpriced starting price of around $3,000 (approximately R20,600);

- Apple has yet to find a true "killer app" for the device. Unlike the iPod and iPhone, which address user pain points, there is a lack of clarity of purpose and demand, and industry insiders are sceptical that MR-based integration with other Apple products will appeal to consumers.

- The need to replace the battery every few hours and the poor practicality and portability;

- the adoption of designs that testers found uncomfortable, e.g. the popularity of invasive devices still needs time and space to be resolved

- not much media content at the time of possible launch, etc.

Apple executives have a clear understanding that the device will not be a "launch hit" and that the sales curve is likely to be similar to that of the Apple Watch, with little to no profit in the early stages of sales and an inevitably long payback period. With future iterations of the headset and lower prices, consumer interest is expected to rise further.

Apple insiders say sales of the first version of the MR headset will be worthless compared to the company's existing products. Even if it might be the market leader in MR for a few months, it just shows the extreme weakness of the headset market.

Companies in the A-share that have laid out VR/AR/MR

With Apple's seven year old headset on the horizon, perhaps a new "tipping point" for VR/AR/MR will come with Apple's reputation for creating benchmark products and appeal. Here's a look at the companies in the A-share that are already in the VR/AR/MR business.

The companies that have laid out their business in optical display are Changxin Technology, Sanlippu, Hongli Zhihui, Lante Optical, Lianchuang Electronics, Weir, Crystal Optoelectronics, etc. The company has been supplying display modules for Meta Quest2 and VR headset modules for domestic VR giants; Sanlippu's VR product certification work is almost complete, and has procured corresponding production equipment, which is currently being installed and commissioned, and is expected to achieve small batch supply in the second half of the year; Hongli Zhihui's Mini-LED products have been supplied in batch to internationally renowned VR companies; UniCreative Electronics has The company has mature and key core technologies, such as geometric light waveguide, ultra-thin lens, etc.

The companies that have laid out their plans in terms of chips include Allwinner Technology and Rexin Micro. Allwinner Technology has launched VR9 special chip for VR all-in-one machine applications; Rexchip has released a new generation of flagship chip RK3588 VR/AR display module and complete machine solutions.

The companies that have laid out their plans in the manufacturing of complete machines include Goer and Lixun Precision. Goer can provide one-stop VR solutions, and is also active in the upstream core business of VR, including optics, software and structural components; Lixun Precision is committed to building the parts, modules or systems required by the AR/VR market.

Other companies that have laid out in other areas such as structural components include Anjie Technology, Zhaowei Electromechanical, Smart Cube and Changying Precision. Anjie Technology mainly supports Meta 0culus products with precision functional devices and precision structural parts, and has supplied 0culus Quest2 for mass production; Zhaowei electromechanical has laid out eye tracking and refractive adjustment applications in XR, and has cut into the supply chain of many customers such as Pico; Changying Precision is participating in the design of large parts of structural parts for Apple AR/VR devices.

Apple's new products have a significant incentive effect on hardware manufacturers, content developers, the capital market and the industry chain, and the outside world expects to continue to influence the layout of VR/AR/MR manufacturers' actions in the future.

With the overall weakness of global consumer electronics products and the decline in VR/AR/MR shipments, the industry expects a reversal in demand for VR/AR/MR due to Apple's influence in creating benchmark products. The industry has high hopes that Apple, Meta and other major companies will overcome the "lack of heavyweight applications exclusive to VR/AR".

Hardware manufacturers, content developers, the capital market and the industry chain are in the same chain of interests at the beginning of the emerging field, and the market needs a giant like Apple to act like a catfish to promote a healthy mix in the industry, with all forces working together to build a complete meta-universe ecology. In particular, all AR/VR/MR manufacturers in the industry should work together to promote the deep integration of optical display, chip, machine manufacturing, structural component manufacturing and a series of other technical fields, and accelerate the pace of integrated innovation.

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