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.

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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.

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 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 mainstream consumers understand and want.

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

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, Apple bought PrimeSense, whose 3D camera sensor eventually ended up being part of the basis for Face ID, the company’s facial recognition system for iPhones, and influenced the company’s current depth-sensing cameras.
— In 2015, Apple 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, such as 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 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.

One early thought is 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, such as marathon battery life and a bigger screen.

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 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.