Why Apple’s headset could succeed where every similar product has failed

Published

2 years ago

June 1, 2023

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An attendee wears an HTC Vive Virtual Reality headset during the Apple Worldwide Developers Conference in San Jose, California, June 5, 2017.

David Paul Morris | Bloomberg | Getty Images

On Monday, Apple is expected to announce its first new major product line since the Apple Watch in 2014.

During Apple’s software-focused developer conference, WWDC, it could release its first mixed reality headset, according to analyst research, media reports and increasingly, vague references from Apple itself.

The headset, according to reports, will feature high-definition screens in front of the user’s eyes. But it could also let users see and interact with the real world through high-powered cameras mounted on the device, a trick sometimes called passthrough or mixed reality.

Apple is launching its headset as the broader virtual reality industry sifts through what’s been called a trough of disillusionment.

“Although the lackluster uptake of the AR/VR market and the transitory enthusiasm about the Metaverse create a backdrop of challenges, it is instructive to remember that Apple invents entire new categories that have the potential to disrupt existing markets and create entirely new markets,” Bank of America analyst Wamsi Mohan wrote in a recent note.

When Facebook rebranded as Meta in October 2021, it drew attention to VR and the metaverse headsets could enable. But since then, sales for existing VR headsets haven’t been great, usage has been worse and the anticipated explosion in successful VR software companies hasn’t happened.

Augmented reality, a related technology that shows computer graphics through pricey, specialized transparent lenses, has also failed to thrive. Microsoft’s Hololens, announced in 2014, had a high-profile deal to make headsets for the U.S. Army, but it recently stalled. The most visible AR startup, Magic Leap, has changed management and refocused from making a consumer-oriented gaming device to developing a tool for a small set of industries.

Apple’s headset is expected to be more powerful than what’s out there — even current $6,500 VR headsets. It’s expected to have a 4K resolution screen for each eye and a powerful Apple-designed chip, according to TFI Securities analyst Ming-Chi Kuo.

It could also be pricey, retailing for as much as $3,000, according to a note from TD Cowen analyst Krish Sankar, and could only sell in the hundreds of thousands in the first year. By way of comparison, the Apple Watch sold millions in its first year.

But many people in the industry believe Apple’s announcement will energize consumers and software developers and bring the technology closer to its ultimate promise: a headset you wear daily, as you go about your business, or perhaps a pair of lightweight glasses, helping you with contextual information.

“It’s good to see others get into this business, particularly Apple, who doesn’t jump into markets too early,” Magic Leap CEO Peggy Johnson told CNBC. “That is a huge validation of what we have been doing to date, and we welcome that, because it’s also good for the ecosystem.”

Here’s why Apple could succeed where everybody else has failed.

Apple breaks products into the mainstream

Apple seldom invents something unprecedented. Instead, it takes existing ideas and refines them in critical ways that make them a lot more appealing to consumers.

Before the iPod, there were several hardware MP3 players in the market. Before the iPhone was released, the Blackberry had merged a wireless cellular internet connection and pocket computer into what is still called a “smartphone,” and other companies were building smartphones based on Microsoft’s Windows Mobile system. When Apple released the Apple Watch, there were many other smartwatches on the market, chasing a concept that had been around in cartoons and science fiction for decades.

Historically, Apple uses its significant consumer brand and hefty marketing budget to explain to consumers why they need its latest gadget.

“Apple has a trust and a granted entitlement that no-one else has, and they’ve earned it,” said Jarrett Webb, a technology director at Argodesign who develops mixed-reality apps. “They have this leadership position and this poise to help define, and give confidence, to this new form of computing.”

The best example of this was at the original iPhone launch. Steve Jobs, founder of Apple and CEO at the time, described the new device as a combination of three things: An internet communications device, an MP3 player, and a phone.

The late Apple CEO Steve Jobs unveiling the first iPhone in 2007.

David Paul Morris | Getty Images News | Getty Images

The language may be dated now — the clunky phrase “internet communications device” transformed into “there’s an app for that” quickly. But it still showed how Apple can quickly slim down a pitch for a new gadget into terms consumers understand.

For now, the world of headset technology is confusing and has no clear use cases. Industry practitioners spend a lot of time explaining the differences between augmented, virtual, and mixed reality. If Apple can demystify the whole industry for the public, it could end up with the first headset that mainstream consumers understand and want.

Plus, Apple has about 34 million developers for its current phones. That’s a huge resource that Apple could encourage to build the killer app that would turn its headset into a must-have.

Apple has been laying the groundwork for a decade

When Apple releases a headset, it won’t just have the technology that Apple developed in secret. It will have a base of software and hardware infrastructure that Apple has been building and buying for years.

Starting in 2016, Apple CEO Tim Cook began frequently talking about the benefits of augmented reality, often contrasting it with the limitations of virtual reality.

Around the same time, Apple started buying several companies focused on specific technologies that could end up in a headset.

In 2013 it bought Primesense, whose 3D camera sensor eventually ended up being part of the basis for FaceID, the company’s facial recognition system for iPhones, and influenced the company’s current depth-sensing cameras.
In 2015, it bought Metaio , which made AR software for mobile devices.
In 2016, it bought Flyby Media, which worked on computer vision technology.
In 2017, it bought SensoMotoric Instruments, which developed eye tracking, a core VR technology, as well as Vrvrana, which developed a VR headset.
In 2018, it bought Akonia Holographics, which developed transparent lenses for AR glasses
It bought NextVR, which filmed video content for virtual reality, including sports.

Apple also started releasing developer’s kits for augmented reality, including one called ARKit which could use the iPhone’s hardware to create limited AR experiences on the phone, like interacting with a virtual pet or trying out digital furniture in a living room.

Apple now has an entire library of software to perform difficult tasks that the headset will need to be able to do to integrate the real world and a virtual world seamlessly.

RealityKit allows developers to render graphics that mesh with the real world.
RoomPlan scans the room around the user.
Animoji is a 3D avatar that can match the user’s facial expression.
Spatial Audio can make audio sound like it’s coming from somewhere, not just from the user’s headphones.

Apple doesn’t give up easily

When the Apple Watch hit the market, Apple didn’t know entirely what it was going to be. Cook even said at its release that the copmany was excited to learn what developers would do with it.

One early thought is that the Apple Watch was going to be a fashion must-have. In the early days of the product, Apple spent a lot of time courting fashion media and seeding the product with tastemakers. Beyonce was spotted wearing a gold Apple Watch model (with a never-released band) before it was released.

But once the Apple Watch got into user hands, Apple figured out people were most interested in it as a fitness tracker. Subsequent versions de-emphasized the luxury gold model and introduced a version co-branded with Nike.

When Apple finally released a new premium model of the Apple Watch, the Apple Watch Ultra, its selling point was features that dedicated fitness trackers had for serious weekend warriors, like marathon battery life and a bigger screen.

Apple announces high-end Apple Watch Ultra for more rugged conditions

Apple could pull the same move with its headset. Even if the first is expensive and doesn’t sell well, Apple is already planning future versions at lower prices and higher volumes, according to Kuo.

Analysts don’t expect Apple’s headset to turn into a significant source of revenue immediately. But they believe that Apple is dipping a toe into a market that could one day be worth billions.

“By 2030, I believe the wearables/glasses segment could account for 10% of Apple’s sales (assuming they don’t release a car), a similar size business as Mac and iPad are today,” said Gene Munster, founder of Deepwater Asset Management, in an email.

Technology

iPhone 17 goes on sale globally as Apple faces China rivals and AI doubts

Published

7 hours ago

September 19, 2025

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iPhone 17 goes on sale globally as Apple faces China rivals and AI doubts

A customer holds up the new orange-colored iPhone 17 Pro Max smartphone inside an Apple retail store in Chongqing, China, on September 19, 2025.

Cheng Xin | Getty Images News | Getty Images

The iPhone 17 hit store shelves worldwide on Friday, drawing lines from Beijing to London.

But beyond the launch buzz, Apple is under pressure to prove itself, grappling with questions over its artificial intelligence plans, as well as increasing competition.

Products on display for the first time include the iPhone 17 Pro, iPhone 17 Pro Max, and iPhone Air, as well as new Apple Watch and AirPods models.

While they were available for preorders in the U.S. from Sept. 12, the global launch holds particular significance as Apple takes on growing competition in overseas markets.

China competition

One of those markets is China, where customers waited for hours — and even overnight — to get their hands on the new iPhone

First in line at the Apple flagship Store in Sanlitun, Beijing, this morning, was Liu — he did not wish to be identified by his full name — who told CNBC that he had been queuing since 11 p.m. local time Thursday for his chance to pick up the iPhone 17 Pro Max.

A customer shows off his new iPhone 17 at Apple’s Regent Street store on Sept. 19.

Arjun Kharpal | CNBC

He said he was excited about the smartphone’s new color and exterior design, which Apple says has improved the phone’s heat dissipation.

Notably, Liu also said he has changed to Apple from Huawei in recent years, saying he preferred the iPhone for daily use and entertainment.

Another person, who wished to be identified only by his surname, Yang — an erstwhile Xiaomi user — said he had been waiting to get his hands on the latest iPhone, preferring its operating system.

First reactions as iPhone 17 hits London

Both Liu and Yang expect many Chinese residents to buy their first iPhone this year due to the new features, including larger internal storage.

If that trend were to pan out, it would be welcome news for Apple, which has lost market share in China to players such as Huawei and Xiaomi.

After years of leadership in the region, the iPhone-maker now only holds 10% of the Chinese smartphone market, trailing local players like Oppo, Huawei, Xiaomi and others, according to data from Omdia.

Apple’s latest iPhone models are shown on display at its Regent Street, London store on the launch day of the iPhone 17.

Arjun Kharpal | CNBC

So far, the signs are positive for the iPhone 17 series in China. Last Friday, JD.com — one of China’s largest ecommerce platforms — saw the first minute of iPhone 17 series preorders surpass the first-day preorder volume of last year’s iPhone 16 series, the company reported.

At 10 a.m. local time on Friday, JD.com said that iPhone 7 trade-in sales were four times higher than the same period last year.

Other markets

In the much smaller but affluent market of Singapore, the redesigned iPhone 17s were also met with fervor, with long lines forming outside Apple outlets across the city.

Iman Isa and Daniel Muhamed Nuv, two young professionals in Singapore, both queued for hours at Apple’s outlet in the city’s iconic Marina Bay mall to buy iPhone 17 Pros, which they said were their first new phones in years.

Citing the fresh design, longer battery life and improved camera, they said the new phones offer enough to keep them loyal to the Apple ecosystem.

WSJ’s Tim Higgins: Apple is facing a situation similar to the one Microsoft faced a generation ago

Based on preorder times and consumer feedback, the initial global demand for the iPhone 17 series appears largely positive, said Le Xuan Chiew, a research manager at Omdia.

The iPhone 17 base model in particular has outperformed expectations, as the pricing at launch remained unchanged from its predecessor despite upgrades in memory storage, Chiew said.

In Singapore, customers arriving at Apple outlets had also been looking to nab some of the company’s new AirPods Pro 3, citing the product’s live translation feature as a major selling point.

In London, lines were notably longer than they were at last year’s launch of the iPhone 16, and customers appeared more interested in the premium offerings — the Pro and Pro Max models — this time around.

People lined up outside Apple’s Regent Street, London store on Sept. 19 to get their hands on the latest iPhone 17.

Arjun Kharpal | CNBC

“For the last five years, I’ve been in a pattern of constantly upgrading my phone, because every year Apple is bringing something new to the table,” one customer, Jasmine, said. “I just love having that experience of Apple every year.”

Meanwhile, Michael, who described himself as a content creator, said he was drawn by the battery and camera.

“I thought about going for the [iPhone] Air, but I just don’t know whether or not the battery is going to be able to hold up. And that single camera? I don’t know, it’s just a little bit off-putting on the back,” he said of Apple’s thin iPhone 17 offering.

Apple intelligence

A successful iPhone 17 launch could help reassure Apple investors after a somewhat underwhelming rollout of its artificial intelligence features, which began late last year.

Speaking to CNBC’s “Squawk Box Europe” last week, Ben Wood, chief analyst at CCS Insight, lauded Apple’s latest product launches but said the company now needed to deliver on artificial intelligence.

'Apple need to deliver on AI': says analyst

“There is no question that Apple needs to deliver on AI,” he said, noting that the company had “dropped the ball” last year by making big promises that failed to materialize.

“Apple has to catch up [in AI], but right now, I think they’ve got enough runway to be able to cope in the intervening period.”

– CNBC’s Eunice Yoon contributed to this report

Technology

Nvidia just spent over $900 million to hire Enfabrica CEO, license AI startup’s technology

Published

16 hours ago

September 18, 2025

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Nvidia just spent over 0 million to hire Enfabrica CEO, license AI startup's technology

Co-founder and chief executive officer of Nvidia Corp., Jensen Huang attends the 9th edition of the VivaTech trade show in Paris on June 11, 2025.

Chesnot | Getty Images Entertainment | Getty Images

Nvidia has just shelled out over $900 million to hire Enfabrica CEO Rochan Sankar and other employees at the artificial intelligence hardware startup, and to license the company’s technology, CNBC has learned.

In a deal reminiscent of recent AI talent acquisitions made by Meta and Google, Nvidia is paying cash and stock in the transaction, according to two people familiar with the arrangement. The deal closed last week, and Enfabrica CEO Rochan Sankar has joined Nvidia, said the people, who asked not to be named because the matter is private.

Nvidia has served as the backbone of the AI boom that began with the launch of OpenAI’s ChatGPT in late 2022. The company’s graphics processing units (GPUs), which are generally purchased in large clusters, power the training of large language models and allow for big cloud providers to offer AI services to clients.

Enfabrica, founded in 2019, says its technology can connect more than 100,000 GPUs together. It’s a solution that could help Nvidia offer integrated systems around its chips so clusters can effectively serve as a single computer.

A spokesperson for Nvidia declined to comment, and Enfabrica didn’t provide a comment for this story.

While Nvidia’s earlier AI chips like the A100 were single processors slotted into servers, its most recent products come in tall racks with 72 GPUs installed working together. That’s the kind of system inside the $4 billion data center in Wisconsin that Microsoft announced on Thursday.

Nvidia previously invested in Enfabrica as part of a $125 million Series B round in 2023 that was led by Atreides Management. The company didn’t disclose its valuation at the time, but said that it was a fivefold increase from its Series A funding.

Late last year, Enfabrica raised another $115 million from investors including Spark Capital, Arm, Samsung and Cisco. According to PitchBook, the post-money valuation was about $600 million.

Tech giants Meta, Google, Microsoft and Amazon have all poured money into hiring top AI talent through deals that resemble acquihires. The transactions allow the companies to bring in top engineers and researchers without worrying about the regulatory hassles that come with acquisitions.

The biggest such deal came in June, when Meta spent $14.3 billion on Scale AI founder Alexandr Wang and others and took a 49% stake in the AI startup. A month later, Google announced an agreement to bring in Varun Mohan, co-founder and CEO of artificial intelligence coding startup Windsurf, and other research and development employees in a $2.4 billion deal that also included licensing fees.

Last year, Google made a similar deal to bring in the founders of Character.AI. Microsoft did the same thing for Inflection, as did Amazon for Adept.

While Nvidia has been a big investor in AI technologies and infrastructure, it hasn’t been a significant acquirer. The company’s only billion-dollar-plus deal was for Israeli chip designer Mellanox, a $6.9 billion purchase announced in 2019. Much of Nvidia’s current Blackwell product lineup is enabled by networking technology that it acquired through that acquisition.

Nvidia tried to buy chip design company Arm, but that deal collapsed in 2022 due to regulatory pressure. In the past year, Nvidia closed a $700 million purchase of Run:ai, an Israeli company whose technology helps software makers optimize their infrastructure for AI.

On Thursday, Nvidia announced one of its most sizable investments to date. The chipmaker said it’s taken a $5 billion stake in Intel, and announced that the two companies will collaborate on AI processors. Nvidia also said this week that it invested close to $700 million in U.K. data center startup Nscale.

— Correction: A prior version of this story mistakenly included the name of a company as an investor in Enfabrica.

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Technology

CrowdStrike pops nearly 13% on upbeat long-term guidance at investor day

Published

19 hours ago

September 18, 2025

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CrowdStrike pops nearly 13% on upbeat long-term guidance at investor day

CrowdStrike logo is seen in this illustration taken July 29, 2024.

Dado Ruvic | Reuters

CrowdStrike shares popped about 13%, a day after the cybersecurity firm issued better-than-expected long-term guidance at its investor day.

The company on Wednesday said it expects net new annual recurring revenues to grow at least 20% in 2027, ahead of analysts’ expectations. CrowdStrike plans for ARR to hit $10 billion by 2031, and then double to $20 billion by 2036.

Earlier this week, the firm said it was buying AI security platform Pangea and announced a partnership with Salesforce.

“CrowdStrike is by far the most advanced security platform in the industry, and the plethora of AI-based solutions announced today will further separate CrowdStrike from the competition,” wrote Wells Fargo analyst Andrew Nowinski in a note following the event.

Some Wall Street firms also boosted their price targets.