Kuo: Apple’s AR/MR headset will be the biggest thing since the iPhone

Well-known analyst Ming-Chi Kuo issued a new note to clients explaining the challenges and expectations for Apple’s upcoming virtual (VR) and augmented reality (AR) device. Kuo maintained his earlier prediction that the mixed reality (MR) device will get an early January 2023 launch. He also said the AR/MR headset will be Apple’s most revolutionary device after the iPhone.

But the company will have to convince the market of the expensive headset’s growth potential. And that will be the purpose of the first-gen headset.

Apple’s launch event for the AR/MR headset

The analyst explains that revolutionary products from the recent past were so successful because they provided innovative experiences that people could not previously imagine. Kuo offers the iPhone and Wii as examples. As a result, the AR/MR headset must prove to buyers and investors that it can deliver similarly unique experiences.

Kuo said Apple may announce the AR/MR headset in January 2023. The media event should ease the concerns of the market regarding the user experience and low initial shipments. The analyst says the AR/MR headset is expected to cost between $2,000 and $2,500.

Moreover, Apple should ship up to 1.5 million units in the first year. The steep entry price might impact sales.

Kuo believes Apple will focus on the three critical aspects of the AR/MR headset. The overall hardware specs, the software/services and development ecosystem, and the user experience.

“If Apple AR/MR headset’s user scenarios can convince investors, investors will believe that the headset will enter a period of rapid growth in the next few years and will be less concerned about low shipments in 2023,” Kuo wrote.

The price will drop in the next few years

While the AR/MR headset’s price will limit shipments in the first year, Kuo says that the first-gen model will focus on proving that there is demand for the wearable. Once that happens, the selling price should decrease gradually, “boosting rapid shipment growth with improved production, technology, and cost.”

With all that in mind, Kuo expects the Apple AR/MR headset to be the next revolutionary consumer electronics product after the iPhone.

Kuo thinks the eye-tracking technology that Apple will introduce is the most appealing for the headset, as it’s more sophisticated than anything offered by comparable devices. Furthermore, he signals other key details of the AR/MR headset that investors should be aware of. The list includes displays for a great immersive experience, processors, optical cameras, and flex boards.

Moreover, the device has to be comfortable for users. It has to dissipate heat without impacting comfort or high-speed computing. The parts that make that possible should also be of interest to investors.

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