Apple’s leap into the metaverse could jolt a sputtering market, but it won’t happen overnight

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    John Swarts

    Apple’s mixed reality headset will release in June and sell for $3,000

    Apple Inc.’s first groundbreaking hardware product in nearly a decade, a mixed reality headset, is due in June and should shock the stagnant Metaverse market, but it’s making an overnight comeback. Not necessarily.

    Apple (AAPL) executives are reportedly cautious about selling the $3,000 headset, which will be called the Reality Pro or Reality One. Bloomberg reports that the company plans to sell about 1 million headsets in its first year, or $3 billion worth of headsets. That would put the headset on a similar trajectory as the Apple Watch.

    Radio Free Mobile analyst Richard Windsor said in a note Monday that “Metaverse devices launched to consumers will likely come at a higher price point and lack content available on the platform. When you think about it, it’s likely to struggle to gain traction.” He added that the device is unlikely to make a measurable difference to his Apple earnings.

    Apple’s entry into every market (think mobile phones and watches) justifies that market for consumers. However, the Metaverse has been envisioned for a long time and, despite years of hype, has not yet penetrated the general public, so it is not a typical market.

    Hardware sales have been sluggish due to a lack of apps, and Meta Platforms (META) has slashed the price of its Oculus headsets this month. Facebook’s parent company is also in the midst of his second layoff to cut costs, following criticism that he spent lavishly pushing the metaverse. Meta’s Reality Labs generated about $2.2 billion in 2022 revenue, but endured an operating loss of $13.7 billion.

    Meta isn’t the only company with disappointing Metaverse revenue.

    Last week, IDC reported that an estimated 8.8 million augmented and virtual reality headsets shipped last year, down 21% from 2021. A few months ago, market research firms predicted annual sales of about 9.7 million units.

    “Given the limited number of vendors in the market, the difficult macroeconomic environment, and the lack of mass-market adoption by consumers, this decline was not completely unexpected,” IDC said. increase.

    Yet vendors continue to pursue metaverse wealth based on optimistic market research.

    New metaverse opportunities in video games, hardware, commercial software and services, e-commerce, advertising, and other segments will generate $52.39 billion in annual revenue by 2027, according to last week’s S&P Global Market Intelligence report. will produce

    Video games will account for 41% of the metaverse’s annual revenue by the end of the forecast, S&P Global Markets concluded. This is because publishers and platform holders “embrace the possibility of a permanent digital identity to purchase virtual goods for use across a range of settings and game modes.”

    – John Swartz

    This content was produced by MarketWatch operated by Dow Jones & Co. MarketWatch is published independently of the Dow Jones Newswires and The Wall Street Journal.


    (Closed) Dow Jones Newswire

    03-27-23 1348ET

    Copyright (c) 2023 Dow Jones & Company, Inc.


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