Eleven years ago, Facebook acquired Oculus VR, Inc., a virtual reality headset maker, for about $2B. Around the same time, Apple began work on its own VR headset. Together, the two companies have so far spent about $100B building the hardware and software for what they’ve called the next generation in personal computing.
“Mobile is the platform of today, and now we’re also getting ready for the platforms of tomorrow” -Mark Zuckerberg
“It’s tomorrow’s technology today, is the way I think about it” –Tim Cook
First there were desktop PCs, then laptops, then smartphones, and now, as Tim Cook and Mark Zuckerberg would have us believe, is the age of immersive computing using strap-on facial PCs.
I don’t buy it, and it seems most others agree.
Meta has been in market with the Quest standalone headsets for five years. The Quest devices are priced at $300 and $500 depending on capabilities and have sold about 30 million units. Despite those sales numbers, Quest headsets often end up sitting on shelves or in drawers with fewer than 1/3rd actively used, leading to a relatively small user base that’s stalled out somewhere around 7 to 9 million users.
Apple joined the race just over a year ago with the retail launch of its Vision Pro headset. Apple’s headset has higher end components and fit and finish than the Meta offerings, and a price to match, starting at $3,500 and going up to $3,900. Apple produced an initial run of about 500 thousand units for 2024 with plans to ramp up in 2025. However, after the initial excitement wore off, Apple exited 2024 with enough unsold headsets to cover all of 2025 demand, so production was ended and press reports suggest Apple has moved on from the goggles form factor after Vision Pro’s failure in the market.
“All signs are pointing to the company’s Vision Products Group shifting its resources to other form factors.” -Mark Gurman, Bloomberg
Analysts disagree on the precise numbers, but 2021 seems to have been the high water mark for VR headset sales with a decline of about 21% in 2022, 40% in 2023, and 12% in 2024.
Apple’s entrance in 2024, along with Meta’s more affordable Quest 3S model, helped to slow the decline in 2024. With no new Meta or Apple headset models expected in 2025, this year’s decline is probably going to be considerably steeper than last year’s.
Meta, like Apple, has seen the writing on the wall and has also begun to pivot away from the goggles form factor.
So what’s next? AR spectacles, probably.
Meta and Apple are both working on the spectacles form factor with Meta in the lead, at least publicly. Meta, partnered with Ray-Ban, is already in market with $350 to $550 smart glasses that can capture images and video, play audio, and utilize voice commands for calls, messaging, and an AI-powered chatbot. There’s no screen in these smart glasses, but Meta’s committed to adding a simple display soon and also previewed more advanced visual technology called Orion, that could arrive in about 10 years, if they can bring the component cost down below the currently wild $10,000 per pair.
Apple has apparently also been working on spectacles, though a tethered device that was under development has reported to have been recently shelved. We’ll have to wait and see what comes from the far more secretive Apple.
If we do end up with AR glasses sometime in the next decade, they will not offer an experience like VR goggles. The goggles form factor is bulky enough to contain very high resolution screens and complex lenses affording an immersive and realistic virtual environment that can also do video pass-through of the user’s surroundings for a mixed reality experience. AR spectacles will be much more like your car’s heads up display.
Where VR goggles offer extremely high resolution, good enough for reading text over extended periods or watching 4K movies, AR spectacles will offer very low resolution translucent overlays unsuitable for small text. Where VR goggles have around 110° field of view with room to improve, AR spectacles will at least initially top out around 70°. And where VR goggles support 3D content at any distance, AR spectacles will have a simple fixed-distance 2D overlay.
All that’s to say that AR spectacles are not the evolution and shrinking of VR goggles to a more acceptable form factor. Instead, they are an entirely new experience built on totally different technologies. Where VR goggles carry you into rich virtual and mixed reality experiences, AR spectacles are going to be much more like Apple CarPlay or Watch for your face, with navigation, notifications, and a few other basic apps.
Commercial virtual reality hit the scene in the mid-1980s with head mounted displays showing up in video game arcades. The idea isn’t new and there have been several attempts at delivering VR to the mainstream. None before have had the investments made by Facebook and Apple, but even the biggest tech companies in the world have failed with this latest generation to take take VR mainstream.
I believe the Quest and Vision Pro failures are proof that the goggles form factor is simply unacceptable to most people, that regular folks are simply unwilling to smash a PC to their faces held in place with straps around their heads. It seems Meta and Apple are figuring this out and shifting their efforts to far less ambitious, but perhaps acceptable form factors like smart glasses with cameras and AI, and eventually full AR spectacles with visual displays.
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