I don’t expect this to be a popular opinion, but Apple has sucked all the oxygen out of the virtual/augmented reality industry with the announcement of its Vision Pro headset.

What’s the evidence? Just data.

Counterpoint data from China shows the VR market there declined 56% year-over-year across the first half of this year. This follows two years of growth in the sector.

Global sales patterns reflect a similar reality, with sales down 39% in the first part of the year. IDC data reflects similar trends, with a 44.6% decline in Q4.

Some of the reasons the analysts see for this decline include consolidation in China’s VR market, tepid economies, and the absence (yet) of killer apps and ecosystems. Those are all valid, but I think anticipation of the Apple product is also denting interest in current VR platforms.

“Chinese Augmented Reality (AR) companies ... have a more optimistic outlook for their future development, thanks to the emphasis on Mixed Reality (MR) features by the Apple Vision Pro,” wrote Counterpoint. “They strongly believe in the significance of the interaction between virtual objects and the real world, which may position AR as the ultimate future solution.”

Developers are focusing on visionOS. Apple has been hosting developers to Vision Pro developer labs since June. We know this because the market keeps inventing reports to say how poorly attended these are, which probably isn’t completely accurate.

Other than Apple, Meta remains the current leading hope to take VR mainstream with its Quest 3 headset. But it lacks the hold on people’s hearts and minds that Apple has achieved.

Not only that, consumer perception of products from the brand is permanently dented by Facebook, which roughly three quarters of adult Americans say makes society worse.

Consumers do worry about price, but they also prefer to take the best option they have. $500 isn’t cheap, nor is $3,500, but anyone preparing to spend a dime on headsets will want to take a look before they buy. Right now, consumers will want to see what Apple achieves with Vision Pro next year.  

Yes, the $3,500 price tag for those devices may put people off, but they aren’t going to shove $500 on the table for a lesser device today if they think it’s possible that what they’ve bought will instantly look second rate when Apple’s device finally appears. They may not be able to afford that device, but they won’t want to end up with something no one wants — where’s the bragging rights?

In the weeks before Apple’s Vision Pro announcement, industry speculation predicted that Apple’s entry into the market would raise all the boats. It will, but it must leave dry dock first.

Not only that, but the current economic and political climate is increasingly risk averse, prompting at least one survey report to state: “The data shows businesses believe VR/AR is the future of content, but after so many false starts in recent years, marketers are clearly more sceptical about the potential of the technology right now.”

No one will jump until they see what’s up.

Apple’s Vision Pro is the hot ticket for a future for the whole industry. All the same, Apple does now need to deliver.

With that in mind, it’s not a huge surprise that we’re being treated to the usual negative reporting that presages most Apple products these days, from challenges around prescription lenses to potential neck ache if you use the devices for hours and hours (which you obviously shouldn’t).

This speculation may be true. The speculation may be false. But the fact that such market chatter exists at all helps us see who the gorilla waiting at the side of the AR industry ring is. No wonder Meta is allegedly afraid of what happens once the match begins.

That’s not to say that Apple will land a knockout punch in the first few rounds. The device’s cost, the relative novelty of all the new apps that may appear on the device, the need for killer apps, and the physical problems around design, lenses, battery power, and so on will dent the initial impact.

Apple is already planning follow-up devices and will learn from any errors made in v.1. It always does. At what point will the lenses in these devices become capable of self-setting to match a user’s optical prescription?

In fact, with so many known unknowns, the most likely truth is that the current decline in this category is nothing other than the calm before the storm. And that storm could see Apple’s Vision Pro become an $11 billion business by 2027, which is when some speculate an updated model may appear.

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