MR: Apple to the left, Microsoft to the right

Source: China Electronics News

Author: Qi Xu

Image source: Generated by Unbounded AI tool

"One More Thing (one more thing)..." In the early morning of June 6, Beijing time, as Apple CEO Tim Cook shouted this sentence at Apple's annual developer conference (WWDC23), the outside world expected The Apple MR (Mixed Reality) headset that has been rumored for a long time has finally revealed its true face.

The last time the field of virtual reality was so excited was eight years ago. In 2015, Microsoft's first-generation HoloLens was released, just as the Apple MR project had just started. Since then, HoloLens has continued to iterate, but failed to become a hot-selling product. In the past two years, Microsoft's budget for MR has also been reduced again and again. Unlike Microsoft, Apple, which is good at making hardware, has continued to increase its investment in MR in recent years. It still makes bold bets when the industry is tepid and consumer electronics innovation is weak.

On the surface, Apple is "advancing", Microsoft is "retreating", one is going left and the other is going right. But behind the different business options, the battle for new markets and new business models triggered by those epoch-making products may have just begun.

Apple switched from AR to MR

"One More Thing" is the logo of Apple's "Jobs era". Following the phrase "One More Thing" was the iPhone, which ushered in the era of mobile Internet, and the Macbook, the thinnest and lightest laptop at that time. At this year's WWDC23, Tim Cook said the same thing. As Tim Cook said: "iPhone brought people into the mobile era, and Vision Pro will mark the era of spatial computing."

Tim Cook's original idea was to create AR glasses that looked like ordinary glasses and could be worn on a daily basis. But this is a revolutionary product that is enough to redefine the industry. However, judging from the current technology, AR glasses are still difficult to solve the "impossible triangle" of computing power, battery life and volume. In the end, Apple switched from AR glasses to MR headsets.

"VR 'isolates' users from the physical world, while AR is currently difficult to have powerful computing power and batteries, and it is more like a portable 'big screen'." Industry experts told reporters. MR headsets that integrate the functions and forms of VR and AR are becoming more and more promising.

Apple has laid the groundwork for this for a long time: since 2016, it has successively acquired many companies including motion capture, eye tracking, and vision, and has added more than 5,000 related technology patents; in 2017, it launched the AR development platform ARkit, bringing more than 14,000 AR applications, Cultivated a large number of AR developers for myself; after 2020, it began to expand to downstream application scenarios...

In fact, the concept of MR was proposed by Alex Kipman, the former head of Microsoft HoloLens business. "The mission of technology companies is to use technology to improve people's production efficiency and reduce production costs. The purpose of creating virtual space is to strengthen physical space." Wei Qing, chief technology officer of Microsoft (China), said in an interview with a reporter from China Electronics News. Wang Congqing, global vice president of corporate development at HTC, also believes that most new XR devices in the future will have MR functions.

Microsoft hopes to rely on MR to restore the missed "those years"

In the past 10 years, Microsoft's proud Windows scenery has faded away, and it has missed the trend of smartphones.

"We used to think that the PC was the center of everything. This caused Microsoft to miss the opportunity in the smartphone market. Now it seems that this may be one of the biggest mistakes we have made." Microsoft CEO Satya Nadella said frankly , "We will never miss out on some other new technology trends such as AR/VR."

Next, on the one hand, Microsoft sharply reduced its less-successful consumer hardware business expenditures such as PCs, mobile phones, and xboxes, and on the other hand, it began to shift resources to the next wave of technology such as virtual reality and artificial intelligence.

In January 2015, Microsoft officially launched the MR headset HoloLens, and believes that it may become an "ultimate computer". Through holographic optical waveguide technology and SLAM positioning, Hololens superimposes holographic images in the real world, allowing users to grab and drag virtual objects with both hands to achieve multi-directional gesture interaction. On the basis of the first generation, Hololens2 was released in February 2019, doubling the field of view, upgrading the picture quality from 720P to 2K, and enhancing the accuracy of gesture interaction and diversification of interaction methods, allowing users to command and control on the device. Control, internet connection in real time.

"Microsoft HoloLens has explored the boundaries of MR technology. HoloLens has strong technical capabilities and algorithm capabilities. At that time, it allowed everyone to see more possibilities in the exploration of technological frontiers, and at the same time made a lot of market popularization for the entire MR industry. and education.” Xiang Wenjie, co-founder of Hangzhou Lingban Technology, told the reporter of China Electronics News.

According to Microsoft's official introduction, HoloLens has increased the training rate of some companies by 60%, reduced travel costs by 75%, and improved the productivity of on-site workers, thereby saving an average of $1.3 million in labor costs... The iterative upgrade of equipment has made Microsoft has gradually embarked on a commercial MR road, which has been recognized and used by many enterprises, universities and even the US military. Microsoft was once satisfied with the sales of HoloLens, revealing that MR is Microsoft's "must-win market."

Apple "in", Microsoft "out"

At the moment when the VR/AR industry is tepid and consumer electronics innovation is weak, in the eyes of many people, Apple's entry into MR now seems a bit "adventurous".

According to data from authoritative research institutions, global AR/VR headset shipments in the first quarter of 2023 will drop by 54.4% year-on-year. According to statistics from the venture capital platform PitchBook, in the first five months of 2023, the total financing of startups related to the Metaverse in the United States was 664 million US dollars, less than a quarter of the same period last year.

There was a disagreement within Apple about the release time of the headset-the design team wanted to wait for the technology to mature before bringing this product to the market, while the operations team believed that it was more important to launch the first-generation product to seize the market opportunity first, even if it was expensive and bulky. Some are okay too. It was not until March of this year that Tim Cook finally made a decision, requiring the MR headset to be on the market within 2023.

"Apple has always taken the lead in the era of mobile Internet and smartphones, and the iPhone continued to generate profits for the company, so at that time it did not have a strong motivation to quickly produce MR products." Xiang Wenjie said. It is reported that Apple's annual iPhone sales are about 200 million units, with an average selling price of more than $800, which is the core cornerstone of revenue. "But the smartphone market has been developed so far, and the room for growth has been limited, so we still need to expand into new markets." Xiang Wenjie said.

A Vision Pro experiencer said that Apple, which has always been good at hardware, can be said to have come up with housekeeping skills to create its own MR head display. The Micro OLED screen, 8K for both eyes (4K for one eye) display, and M2+ self-developed R1 are the strongest. The chip combination can be said to be an unprecedented configuration. He saw the high-quality design collection of Apple smart terminals such as Apple Watch and AirPods Max on Vision Pro.

"Unlike other headsets, there is no dizziness when wearing the Vision Pro, which is very critical for long-term use in work and leisure." The experiencer said. According to the official introduction, the transmission data of the headset can be reached within 12 milliseconds, which is faster than the blink of an eye, which greatly reduces the dizziness.

In terms of software, similar to the "predecessor" HoloLens2, Apple has developed its own operating system for Vision Pro based on iOS - visionOS. Application ecology.

Comparison of MR Head Display Parameters

Just when Apple was gradually "topping up" MR, Microsoft, which was once firmly betting on MR, began to adjust its business direction and become a "software company" again. In the past two years, Microsoft has continuously cut the budget of MR business such as HoloLens and reorganized The HoloLens team of more than 1,000 people was killed, more than 100 employees left, and in March this year, it also closed AltspaceVR, a virtual reality company acquired in 2017. At the same time, fully invest in research and development in the field of generative AI, inject 10 billion US dollars into Open AI, and fully integrate GPT4 into the Windows operating system and Office family bucket.

"Microsoft has been working hard for years to make HoloLens a success. But developing the headset and the software it runs on has proven more difficult than anyone expected, stymied by technical limitations and impatience by management. ”A former Microsoft employee revealed.

Mixed reality headsets mean very different things to Microsoft and Apple. "For Microsoft, MR is just one of the businesses seeking a new growth curve. It cannot be compared with cloud, operating system and other fundamental software businesses. The top management lacks the patience to cultivate this; and Apple has continued to cultivate consumer electronics since its inception. Its products can be said to have written the "consumer electronics development history" in recent years. MR has been regarded by Apple as a new generation of consumer electronics terminals after PCs and smart phones, so it will naturally attach great importance to this opportunity and maintain its own competitiveness. .” An unnamed industry expert told reporters.

Xiang Wenjie believes that in the future, Microsoft will return more to the software field it is good at, and its investment in hardware will continue to decrease. For Apple, which is good at making hardware, it will definitely continue to increase investment in MR, and its ecology on the consumer side is very complete, and it will form a community of interests with all parties.

2B or 2C, it is indeed a question

After the release of Vision Pro, Apple’s share price in the U.S. stock market fell instead of rising, and finally closed at $179.58, a drop of 0.76%. Almost the entire fruit chain sector of the A-share market was adjusted across the board. The leading Changying Precision fell by nearly 19%. , Qingyue Technology almost encountered a 20CM limit. The market does not seem to buy into Apple MR.

First of all, the high price may directly turn away a large number of consumers. The price of US$3,499 (approximately RMB 25,000) is several times that of mainstream VR products in the market, which is enough to become a "luxury". The people who buy it may be more developers and some enthusiasts who are willing to try early adopters. Second, the lack of usage scenarios may make it difficult to expand the market. Well-known Apple analyst Ming-Chi Kuo said that Apple's innovative design and spatial computing vision does not indicate "the necessity of Vision Pro in daily use." Finally, releasing this year and launching next year may not be conducive to short-term investment sentiment. The capital market and consumers may think that the product has not yet reached the mass production requirements.

Xiang Wenjie pointed out that companies in the VR/AR industry are now facing a common problem, that is, products on the consumer side are "necessary and necessary", that is, strong performance, light weight, cheap price, and detailed content . Even a relatively powerful company like Apple cannot take care of everything. The dual constraints of technology and price will easily lead to the failure of shipments, and ultimately make it difficult for the ecology to follow up.

In fact, the HoloLens2, which is also priced at US$3,500, has never become a hot-selling product, and the small market is one of the important reasons.

But this is also a process that the industry will inevitably go through in the development process. When the product form and price reach a reasonable range, the product can be mass-produced, and the software ecosystem can keep up. In Wang Congqing's view, Apple's entry is an important verification of the MR industry, which will comprehensively advance the industry and bring many new consumers and developers.

For the two giants in the MR industry, Microsoft and Apple, due to the different industries and fields of products, the opportunities and challenges they face in future development are also very different.

"From the perspective of user needs, users' requirements for consumer-grade products are good performance, strong capabilities, low cost, and more content, while commercial-grade products focus more on solving user needs for specific application scenarios, deepening and focusing, and industry attributes. Stronger; From the perspective of product iteration evolution, commercial-grade products will naturally go slower, which is caused by the longer initial market expansion period, but its profits are higher and it is easier to build a moat, so To B products need to be in Slowly grow through continuous polishing." Xiang Wenjie said.

Analysts predict Apple Vision Pro shipments in 2024

Apple still has at least half a year to educate and inspire the market, and constantly modify the experience through market feedback, instead of directly taking out the product and putting itself in a passive position. Market research firm CounterPoint Research predicts that Apple's MR products may sell 500,000 units in the first year.