Can AR/VR headsets save Apple’s market value? The most complete revelation is here

On January 3, Apple’s stock price plummeted 3.7%, and its market value evaporated by approximately 534.5 billion yuan overnight!

At this point, the last member of the global $2 trillion club has officially withdrawn.

# Just one year ago today, this company, which was founded in a garage in California in 1976, with a stock price of US$182.88 per share, The price once caused the market value to exceed 3 trillion US dollars (about 19 trillion yuan).

Although the stock price fell later and closed at US$182.01, Apple's market value still reached a record high of US$2.98 trillion at the close of the day.

Now, Apple’s market value has fallen to US$1.99 trillion, which is equivalent to the evaporation of US$996.5 billion in one year.

# However, this still fails to break Amazon’s record - the latter is still the only American company whose market value has fallen by more than $1 trillion. .

If you look at the stock market performance of other technology giants in 2022, Apple is still the most resilient. You know, there was Meta before and Tesla after. This year’s performance in the stock market can only be described as tragic.

Meta’s shares have fallen 62% in the past year, while Tesla has fallen 71%.

If you are an investor with a heavy position in technology stocks, the stock with the highest position should be Apple.

The $2 trillion club disbands

In fact, in the past year, Apple has performed better than the S&P 500 index for most of the time. But concerns about Apple's demand have intensified recently, causing its stock price to plummet in a matter of weeks.

On Tuesday, Apple shares fell 3.7% and closed at their lowest level since June 2021.

So far, the decline in stock prices has pushed Apple's market value to less than $2 trillion, becoming the latest victim in the rout of technology stocks. It is worth noting that this is the first time in 18 months that Apple’s market value has fallen below the $2 trillion mark.

In 2022, as the market values ​​of Microsoft and oil giant Saudi Aramco fell below US$2 trillion, Apple became the last company in the world with a market value of more than US$2 trillion. Yesterday, Apple also withdrew from the "2 trillion club."

This milestone marks the decline of Apple's status.

One of the important reasons for the stock price decline is that concerns about iPhone supply during the holidays have intensified, and investors have also lost confidence in the market.

Apple shares have outperformed the S&P 500 for much of the past year. Exactly a year ago, Apple's stock briefly rebounded as the S&P 500 hit an all-time high, climbing to a market capitalization of over $3 trillion.

But Apple’s stock price has tumbled in recent weeks on concerns that iPhone production capacity issues in China will jeopardize holiday sales, which Sales volume is the most important period for Apple every year.

December was Apple’s worst month on the stock market since May 2019, with its stock price down 12%, compared with 9% for the Nasdaq 100 Index during the same period The decline is even higher.

iPhone production reduction, unclear prospects

In fact, as early as early December 2022, Japan’s Murata Manufacturing Co., Ltd., the leader in the electronic parts manufacturing industry and a key supplier of Apple mobile phones (Murata Manufacturing Co.) has predicted that due to weak demand, Apple will further reduce production plans for the iPhone 14 series of mobile phones in the next few months.

Previous epidemics once caused disruptions in Apple’s supply chain, but now the situation has eased.

In the world’s largest iPhone foundry, production capacity has returned to about 90% of expected peak production capacity. Most of the high-end iPhone 14 Pro and Pro Max devices are produced here.

And Murata President Norio Nakajima said in an interview: "Judging from the supply of mobile phones in stores, I think the iPhone production plan will be reduced."

Meanwhile, Nikkei reported on Monday that Apple has notified several suppliers to reduce component production for some products, including AirPods, Apple Watch and MacBook, due to weakening demand.

#Apple is expected to release its latest quarterly earnings report in the coming weeks. The quarter that runs into December is its biggest sales period of the year, and analysts initially expected revenue to hit a new high. And now they're forecasting a slight decline in revenue, according to Bloomberg estimates.

Although Apple once relied on the success of the iPod to give birth to one of the most popular products in the technology circle-the iPhone. (Accounting for about half of Apple’s revenue)

But since then, whether it is Apple Watch or AirPods, they are only “high-profit supplementary products” that rely on the iPhone ecosystem to survive.

In this regard, Michael Gartenberg, Apple’s former senior marketing executive and Gartner market research analyst, said that as the smartphone market becomes fully saturated, Apple must turn its attention to new markets and look for “ The next big thing".

Betting heavily on AR/VR, the most complete revelations about headsets

What seems most likely to be realized now is that it is rumored to be equipped with the xrOS operating system, and will be Mixed reality headset to be launched in 2023.

Although it sounds very exciting, in fact, Apple’s move is a risky move.

If you want to expect it to have a revolutionary impact on the entire world like the iPhone did in the past, Apple must not make a mistake.

Many features of the headset have never been tried in mass-market headsets, and if the product is too clunky, it will tarnish Apple's good reputation for "good design" .

Sporadic news has been revealed before. For example, this headset looks like a pair of ski goggles. It will allow users to experience the effects of AR and VR through a series of cameras. .

Now, The Information has shared some new details——

In order to give the wearer a good viewing experience, this headset A small motor will be used to automatically adjust the lenses. There will be a physical dial on the headset, allowing users to quickly switch between the immersive VR experience and seeing the surrounding environment (this technology has been quietly added to the latest version of AirPods Pro by Apple).

Starting last year, the headset uses an external battery pack connected by wires, rather than having the battery integrated into the headset. This design caused great controversy among Apple engineers because Apple has always preferred wireless designs.

For this reason, this headset, internally codenamed N301, has gone through multiple iterations. Initially, it required a base station, and later, it became a standalone device. The timetable for this project has also been pushed back several years. The head-mounted display project team also had to compete with thousands of iPhone engineers.

However, it seems to be fast.

It is said that the headset has gone through multiple prototype stages, entered engineering verification testing, and is currently being assembled by Pegatron. During this time, engineers test whether existing designs are suitable for mass production.

Despite reaching this stage, Apple is still cautious and may cut off part of the design or even cancel the headset.

Display and optical components

The internal display has a single-eye resolution of 4K, which is ultimately integrated to form an 8K image.

At the same time, there is also a display on the outside of the device that can show the wearer's facial expressions, or other types of images, to people around the user. This is said to reduce the sense of isolation users may feel while wearing the device.

To reduce power consumption, the external display has an extremely low refresh rate and may work similar to the screen-off display of the iPhone 14 series and Apple Watch.

Apple’s headset will be one of the first products to use Sony’s Micro OLED technology. This means that displays will be very small and thin, but at the same time contain a high density of pixels.

When the user puts on the headset, it will use small motors to automatically adjust the display lenses to match the user's interpupillary distance, thereby providing a field of view of up to 120 degrees. (Which is larger than the Meta Quest Pro’s 106 degrees)

Additionally, Apple allows users to secure custom lenses inside the headset via magnets.

Chip

In order to process images with a resolution much higher than that of the Meta Quest Pro, Apple will work with SK Hynix to develop custom chips of high-bandwidth memory.

In terms of chips, the headset will be equipped with two at the same time: an image signal processor ISP (codenamed Bora) and an SoC (codenamed Staten).

Both chips are based on the 5nm process, so when the headset is launched, it is not based on the most advanced chip manufacturing technology.

This dual-chip design made latency so obvious that Apple had to build another chip, a streaming codec, to speed up communication between them.

Because there are two chips, this headset will be larger than any standalone AR or VR device on the market. Battery life and heating issues are also challenges.

Cameras and Sensors

Apple’s headset will feature more than a dozen cameras and sensors to capture facial expressions and body movements, including legs.

Each eye will be equipped with at least one camera. This will allow the headset to implement a technology called foveated rendering, which only renders the image at full resolution on the part the user is looking at, thus saving battery power.

The Apple headset will also feature both long-range and short-range lidar, which illuminate the physical environment around the user with laser light to map its surfaces and distances in three dimensions.

Interestingly, three people familiar with the matter said that the headset originally had dedicated cameras to capture eyebrow and chin movements, but these cameras were later removed because engineers Found a way to use machine learning to better capture facial expressions.

Headband and Audio

It was previously revealed that the headband that secures the headset to the back of the user’s head is replaceable .

But last year, engineers encountered technical challenges because the headband needed to bear the function of powering the headset.

Now, Apple has designed different headbands, including one designed specifically for developers and one with a built-in speaker. The speaker version is similar to the Apple Watch band and is made of synthetic rubber.

The headset cannot use third-party Bluetooth wireless headsets, nor can it plug in wired headsets.

Behind the scenes, Apple has made great efforts to ensure that future AirPods can be used with headsets. However, this involves privacy protection issues, so there is controversy.

It is reported that both this headset and the second-generation AirPods Pro released in September will contain Apple’s customized H2 chip. When paired, an ultra-low latency mode is achieved.

Battery

It is said that early prototypes of the headset were quite clumsy and used large batteries. Later, Apple integrated the battery into the headband, just like the Meta Quest Pro.

At the beginning of last year, Apple reused a battery pack as a power source. This battery pack will be worn around the user's waist and connected to the headset by wires.

This design greatly reduces the weight of the headset and also allows users to replace the battery and extend the use time.

The battery can be used for 2 hours. The power cord will clip to the headband with a magnetic clip, similar to the MagSafe power connector on a Macbook.

The stand-alone battery pack is a design favored by former Apple chief designer Jonathan Ive, who left Apple in 2019 but remains an adviser to the company.

In Ive’s opinion, putting the battery in the headband would make the headset too bulky and restrictive. The New York Times said Ive stopped working as an Apple consultant last year.

With his exit, Apple may no longer stick to the battery design he favors.

Design and Input

The Apple headset will be made of aluminum and glass, using carbon fiber to reduce its size and weight, making it smaller than Meta Quest Pro is lighter and thinner. At the same time, its cameras and sensors are hidden as much as possible for aesthetic reasons.

One of the distinguishing features of the Apple headset is a small dial on its right side, similar in concept to the crown of the Apple Watch, but without tactile feedback. As first reported by The Information, the watch face will allow users to quickly switch between the virtual and real worlds.

To control the headset’s functionality and interaction with the digital environment, Apple’s industrial design team prefers to use hand tracking and voice recognition. However, Apple has also tested solutions such as controllers, so it is still unclear what the final method will be.

People who have done relevant work said that Apple does not seem to have invested too much in games. Simply put, Apple will not release a dedicated game controller, at least not yet.

Software and Content

Apple sees video conferencing as a potential killer app for headsets, in which digital avatars can accurately mimic the user's Facial and body movements.

In addition, Apple is also building a new operating system for the headset. The system can even run iOS apps, but these apps can only be presented in 2D format. The RealityKit engine will be the only way for developers to build AR applications for headsets.

Another Apple project, code-named Z50, is dedicated to developing other content for the device, including allowing users to observe the Apollo moon landings.

Among them, live sports is likely to be a focus. In 2020, Apple acquired NextVR, a startup that broadcasts live events in VR. In June 2022, Apple began to cooperate with Hollywood to customize content for the headset to match Apple TV programs.

But it’s hard to be the Next Big Thing

Analyst Michael Gartenberg said that Apple’s bet on AR/VR is not a very ideal decision.

In this field, we have seen too many cases that are far from the word "success".

Microsoft’s HoloLens failed to make an impact; Google’s AR glasses were clearly a failure; Snapchat’s Spectacles are not even available to the public (only to developers); and Magic Leap, it is not an exaggeration to say that it is a rolling model.

VR headsets launched by Meta, Valve, Sony and other companies are still only a small part of the huge gaming market after many years.

As for other uses? Sorry, we haven't seen either so far. Although Zuckerberg firmly believes that the Metaverse is the future of our social lives and work meetings.

First and most important is the battery life issue of AR devices.

As envisioned by Google Glass and Snapchat Spectacles, AR is meant to be worn for extended periods of time, overlaying digital images and functionality onto the real world.

Although Apple has not released specifications in this regard, it seems impossible for any type of AR device to work for a long time without charging.

Also, while Apple leads the way in elegant hardware design, battery life isn't really its strong suit.

For example, Garmin’s smart watch can last for two weeks on standby, while Apple Watch can only be used for 2-3 days at most.

Secondly, there is the issue of wearing comfort.

Even ordinary glasses can feel uncomfortable after being worn for a long time. If coupled with the hardware supporting AR and VR technology, the excessive weight and volume will make the wearer even more uncomfortable.

Not to mention, many people don’t like wearing glasses at all, and this will also greatly limit the market for these products.

Finally, and what everyone is most concerned about, is the price issue.

Microsoft’s HoloLens costs between $3,500 and $5,200.

The price of Apple Glasses is believed to be in the price range of US$1,000 to US$1,500, but there are also predictions claiming it to be US$3,000 or higher.

However, even for a low-end product, this is still a big investment, because its performance is far lower than that of a comparably priced MacBook or iPad.

In addition to what was just mentioned, there is a very basic problem for AR/VR devices: the lack of convincing use cases.

While these technologies have exciting potential, there is currently no killer app that would make them a must-have for consumers, outside of certain types of games.

Just as Meta's Oculus often gets shoved away in a corner of a cupboard and forgotten about entirely before Apple or any other company can demonstrate a truly compelling case for it, This technology will be difficult to achieve widespread application.

Although Apple’s AR/VR projects may be attractive to those “hardcore fans” and technology enthusiasts who will queue up on the first day, this is not enough To become Apple’s “next big thing.”

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