Apple Prepares To Launch Its $3,000 Headset

Apple Inc.'s highly anticipated annual WWDC developers' conference is swiftly approaching, and this year's event is expected to be particularly significant as the consumer-electronics giant is poised to unveil its long-awaited mixed-reality headset.

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Since the introduction of the Apple Watch in 2015, Apple has not made any major product launches. However, with an expensive headset offering support for augmented and virtual reality, the company will be venturing into a market that has yet to gain widespread popularity. Meta Platforms Inc., on the other hand, has made a substantial bet on virtual reality with its Oculus headset, but has only achieved limited success.

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Nonetheless, Apple has a track record of transforming technology categories into trends, and a team of analysts from Goldman Sachs suggests that the company may be capable of achieving the same feat with its Reality Pro headset.

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"While we acknowledge that the augmented/virtual reality industry as a whole has generally been underwhelming, we believe that Apple's potential AR/VR headset can succeed where others may have failed, given Apple's unique differentiators in comparison to competing headset manufacturers," stated the analysts, led by Michael Ng.

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One advantage that Apple possesses is its large base of over 1.1 billion active iPhone users, all of whom represent potential consumers for the new headset. Additionally, the company can leverage its extensive developer community to create compelling content for the device while simultaneously adapting crucial first-party apps like Facetime, Apple TV+, and Apple Music for mixed reality experiences.

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"Significantly, non-gaming applications should set Apple apart, where we believe Apple holds even greater competitive advantages compared to existing virtual reality headsets and ecosystems," the Goldman Sachs team explained.

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As an example, the analysts highlighted the potential for "immersive sports" experiences that could utilize Apple's partnerships with MLB Friday Night Baseball and MLS Season Pass.

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However, Apple will need to persuade consumers to make a substantial investment for these experiences, as the Reality Pro headset may carry a price tag of $3,000.

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While it is projected that the company may not sell more than 1 million units of the device in its initial year, the Goldman analysts envision a future where the Reality Pro contributes between $11 billion and $20 billion in annual revenue from fiscal year 2024 to fiscal year 2028.

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The analysts draw a parallel between the Apple Watch and this forthcoming launch. They note that the Apple Watch was initially regarded as a "flop," but eventually went on to define an entire category.

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