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Apple’s new Vision Pro virtual reality headset is displayed during Apple’s Worldwide Developers Conference (WWDC) at the Apple Park campus in Cupertino, California, on June 5, 2023.

Josh Edelson | AFP | Getty Images

It’s been nearly a decade since Apple revealed its last major product, the Apple Watch.

Now the company has a completely different kind of wearable, the mixed-reality headset called the Vision Pro, which the company revealed at its annual Worldwide Developers Conference on Monday.

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I got to take one for a test drive.

Apple gave some WWDC attendees a controlled demo of Vision Pro, walking us through how to manipulate apps and other content in 3-D space and to train the internal cameras to track our eyes. Many features weren’t available for to try, like Siri voice controls and the camera that will let you capture 3-D images and videos. The Vision Pro won’t go on sale until early in 2024, Apple says, so it likely has a few more kinks to work out before the company lets the public try it all.

Still, my demo gave me a taste of where Apple fits in the burgeoning headset space.

But first we had to deal with my glasses. The Vision Pro isn’t large enough to fit glasses if you wear them. The solution: A system of snap-in prescription lenses. An Apple representative took my glasses and placed them on a machine that could read what my prescription is. By the time I got to the demo room, a customized set of lenses were waiting for me inside the Vision Pro. (You don’t need to worry about this if you wear contacts.)

Then it was time to jump in.

The headset was comfortable, with a cushy fabric lining around the face and headband keeping it strapped my head. But, like every other headset I’ve tested, it started to feel a bit heavy and uncomfortable by the end of my 30-minute demo.

Apple’s new Vision Pro virtual reality headset is displayed during Apple’s Worldwide Developers Conference (WWDC) at the Apple Park campus in Cupertino, California, on June 5, 2023.

Josh Edelson | AFP | Getty Images

When I first switched the device on, the external cameras fed the outside world to the sharp displays on the inside. It was crystal clear — almost shockingly so. While Meta‘s most advanced headset, the Quest Pro, feeds you blurry, pixelated images of the outside world, Apple Vision feels like you’re looking through glass, not at a screen.

Then it was time to dive into what the Apple Vision can do. Pressing the dial on the top right of the device, which Apple calls a Digital Crown like the one on the Apple Watch, brings up a menu of app icons. It’s sort of like pressing the home button on an old iPhone. All the standard Apple apps you’d expect to see were there: Photos, iMessage, Apple TV, Safari and so on, floating in the air in front of me.

Apple Vision Pro

Source: Apple

To select an app (or anything else you want to “click”), you look at what you want and then make a pinching gesture with your thumb and index finger to select it. Cameras on the inside of Apple Vision track your eyes and recognize what you’re looking at. The external cameras track your hand movements. Meta’s headset has a similar feature, but it doesn’t work nearly as well as it does on Apple Vision, if it works at all. (Meta ships its headset with a wireless controller for better control.)

Opening an app brings up a window floating in space in front of you, and you can surround yourself with apps if you’d like, almost like working on multiple screens on a desktop computer. The apps look just as crisp as an app on an iPhone or MacBook. That’s significant — until now, I’ve never used a headset with visuals that clear.

I went through several demos like browsing through a library of images in photos, including panoramic photos that made it feel like I was inside the scene. Apple TV is another key app — you can place a virtual movie screen anywhere in the room. I watched a 3-D clip of the latest “Avatar” movie, and it was just as clear as watching on my 4K TV at home.

Apple Vision Pro

Source: Apple

You can also rotate the Digital Crown clockwise to bring the headset into full virtual reality and place yourself in an immersive environment, like a starry night in the wilderness. I especially liked that for watching a movie — it felt like I was sitting in my own personalized IMAX theater.

But VR doesn’t take you fully out of the real world. If someone is in the room with you and you look at them for a few seconds, the headset slowly fades them into view within your immersive environment.

The other demo worth mentioning: FaceTime.

An Apple employee wearing her own Vision Pro in a separate room gave me a call and she popped up in a window hovering in front of me. But it wasn’t her actual face — it was a realistic avatar Apple calls a “persona.” Apple’s demo didn’t let me scan my face with Vision Pro to make my own persona, but the one belonging to the woman I was talking to looked realistic enough that it tricked me into thinking it was a regular video chat at first. It’s a far cry from Mark Zuckerberg’s cartoonish “metaverse selfie” that went viral last year.

Even though most of the focus with Apple Vision is on the visuals, I was equally as impressed by the audio. The Vision Pro has a pair of speakers that sit near your temples and provide a surround sound effect. If you’ve ever used the spatial audio feature with AirPods, you’re already familiar with the concept. But it’s much more pronounced in AR and VR, and it gave me a better sense of presence and immersion than the visuals alone. And even though the sound wasn’t pumping directly into my ears, other people in the room couldn’t hear it. (You can still pair AirPods with the Vision Pro, of course.)

Finally, there’s the price. The crowd at WWDC Tuesday — which was packed with some of Apple’s biggest fans — audibly groaned when the $3,500 price tag popped up on screen. But as someone who has tried just about every mainstream headset to date so far, I can tell you Vision Pro feels like a $3,500 machine. It’s that much more advanced than its next closest competitor, Meta’s Quest Pro.

That’s the state of this technology today: A mediocre-to-bad experience for several hundred dollars, or a premium and visually satisfying experience for thousands.

That alone should tell you the Vision Pro and other devices like it have a long way to go to move beyond a niche product.

Apple unveils Vision Pro headset, calling it 'revolutionary' new augmented reality product

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Meta shares plunge on weak revenue guidance even as first-quarter results top estimates

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Meta shares plunge on weak revenue guidance even as first-quarter results top estimates

Meta shares plunged more than 11% in extended trading on Wednesday after the company issued a light forecast, which overshadowed better-than-expected first-quarter results.

Here are the key numbers:

  • Earnings per share: $4.71 per share vs. $4.32 per share expected by LSEG
  • Revenue: $36.46 billion vs. $36.16 billion expected by LSEG

Revenue increased 27% from $28.65 billion in the same period a year earlier, the fastest rate of expansion for any quarter since 2021. Net income more than doubled to $12.37 billion, or $4.71 per share, from $5.71 billion, or $2.20 per share, a year ago.

One reason for the pop in net income is that, while revenue growth accelerated, sales and marketing costs dropped 16% in the quarter from a year earlier.

Meta said it expects sales in the second quarter of $36.5 billion to $39 billion. The midpoint of the range, $37.75 billion, would represent 18% year-over-year growth and is below analysts’ average estimate of $38.3 billion.

The company no longer reports daily active users and monthly active users. It now gives a figure for what it calls “family daily active people.” That number was 3.24 billion for March 2024, a 7% increase from a year earlier.

Meta has raised investor expectations due to its improved financial performance in recent quarters, leaving little room for error. The stock is up about 40% this year after almost tripling last year. In February 2023, CEO Mark Zuckerberg told investors it would be the “year of efficiency,” which initiated the rally.

At the time, Zuckerberg said the company would be better at eliminating unnecessary projects and cracking down on bloat, which would help Meta become a “stronger and more nimble organization.” The company cut about 21,000 jobs in the first half of 2023, and Zuckerberg said in February of this year that hiring will be “relatively minimal compared to what we would have done historically.”

Headcount declined by 10% in the first quarter from a year earlier to 69,329.

Capital expenditures for 2024 will be $35 billion to $40 billion, an increase from a prior forecast of $30 billion to $37 billion “as we continue to accelerate our infrastructure investments to support our artificial intelligence (AI) roadmap,” Meta said.

Average revenue per user in the quarter was $11.20, Meta said.

The Facebook parent has been clawing back digital ad market share after a dismal 2022. At that time, the company was reeling from Apple’s iOS privacy update and macroeconomic concerns that led many brands to rein in spending.

Zuckerberg spearheaded an initiative to rebuild the ad business with a focus on AI. On the company’s last earnings call in February, finance chief Susan Li said Meta has been investing in AI models that can accurately predict relevant ads for users, as well as tools that automate the ads-creation process. 

Advertising revenue, which accounts for the vast majority of Meta’s business, jumped 27% to $35.64 billion.

Meta is benefiting from a stabilizing economy and surge in spending from Chinese discount retailers like Temu and Shein, which have been pumping money into Facebook and Instagram in an effort to reach a wider swath of users. Some analysts have warned that slower spending from China-based advertisers could be a source of concern in the first quarter and as the year progresses.

The company’s Reality Labs unit, which houses the company’s hardware and software for development of the nascent metaverse, continues to bleed cash. Reality Labs reported sales of $440 million for the quarter and $3.85 billion in losses, bringing total losses since the end of 2020 to over $45 billion.

Analysts expected the division to show an operating loss of $4.31 billion for the quarter.

Executives will discuss the company’s results on a call with analysts at 5 p.m. ET.

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Meta’s Reality Labs posts $3.85 billion loss in first quarter

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Meta's Reality Labs posts .85 billion loss in first quarter

Facebook co-founder and chief executive, Mark Zuckerberg, speaks at an Oculus developers conference while wearing a virtual reality headset in San Jose, California.

Glen Chapman | AFP | Getty Images

Meta shows no signs of substantially trimming its losses from investing in the metaverse, as competition heightens between the Facebook parent and Apple in the virtual reality market.

In its first-quarter earnings report Wednesday, Meta disclosed that its Reality Labs unit recorded a $3.85 billion operating loss. Revenue in the metaverse division was $440 million, up about 30% from $339 million a year ago and representing only around 1% of Meta’s total sales for the quarter.

Analysts were expecting a $4.31 billion operating loss and sales of $512.5 million for the quarter, according to StreetAccount.

Reality Labs has now lost more than $45 billion since the end of 2020, when Meta first began reporting the business segment separately.

Meta CEO Mark Zuckerberg has called the metaverse “the next frontier,” imagining a digital world that facilitates both productivity and recreation. He changed the name of his company from Facebook to Meta in 2021 to reflect his vision for the future of computing.

For now, developing metaverse technology remains a fledgling and costly effort.

The company unveiled in September the Quest 3 VR headset, the latest version of its mixed reality hardware, with a starting price of $499. Apple started selling its $3,499 Vision Pro in February, touting a so-called “spatial computing” experience.

Meta announced Monday that it will partner with third-party hardware companies to create new VR headsets using the same Meta Horizon operating system that powers its Quest headsets. Zuckerberg said that while Apple “basically won out” in the phone market with its closed ecosystem, Meta’s move aims to ensure the “open model defines the next generation of computing.”

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IBM to acquire HashiCorp in $6.4 billion deal, reports another revenue miss

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IBM to acquire HashiCorp in .4 billion deal, reports another revenue miss

IBM CEO Arvind Krishna appears at the World Economic Forum in Davos, Switzerland, on Jan. 16, 2024.

Stefan Wermuth | Bloomberg | Getty Images

IBM shares slipped as much as 6% in extended trading on Wednesday after the hardware, software and consulting provider said it would acquire cloud software maker HashiCorp and reported first-quarter revenue that was lower than analysts had predicted.

In a statement, IBM announced that it intends to pay $35 per share in cash for HashiCorp in a deal with a $6.4 billion enterprise value, net of cash. On Tuesday, The Wall Street Journal reported that IBM was getting close to acquiring HashiCorp, sending shares upward. Bloomberg said earlier on Wednesday that IBM was looking to offer $35 per share.

The deal would be accretive to adjusted earnings before interest, taxes, depreciation and amortization in the first full year after close, and accretive to free cash flow in the second year after close. IBM said it expects the transaction to close by the end of 2024. Dave McJannet, HashiCorp’s CEO, will report to Rob Thomas, IBM’s senior vice president in charge of software, if the deal goes through, a spokesperson said.

HashiCorp would complement Red Hat, which has contributed to IBM’s revenue growth since the $34 billion acquisition in 2019. IBM now sells Red Hat’s version of the Linux operating system for use on multiple public clouds, making it a neutral entity. HashiCorp pioneered open-source software that developers rely on to control cloud infrastructure. Premium versions of the Terraform cloud-management software and other products have brought revenue to HashiCorp.

In 2021 HashiCorp shares started trading on the Nasdaq. But revenue growth has slowed, and the company has continued to report losses. Still, it’s adding revenue at a faster pace than IBM.

HashiCorp shares moved 4% higher in extended trading following the acquisition announcement.

Here’s how IBM did in comparison with the consensus among analysts polled by LSEG:

  • Earnings per share: $1.68 adjusted vs. $1.60 expected
  • Revenue: $14.46 billion vs. $14.55 billion expected

IBM’s revenue increased around 1.5% year-over-year during the quarter, according to a statement. This marks the company’s third revenue miss in the last five quarters.

Revenue from software, at $5.90 billion, increased about 6% and was below the $5.96 billion consensus among analysts surveyed by StreetAccount.

IBM’s consulting revenue came in at $5.19 billion, down slightly and just under the $5.20 billion StreetAccount consensus.

Infrastructure revenue totaled $3.08 billion. It declined 0.7% but came in higher than the StreetAccount consensus of $2.94 billion.

During the quarter, IBM said it was providing its 160,000 consultants with artificial intelligence assistants to boost productivity, and the company completed the divestiture of The Weather Company to Francisco Partners.

Notwithstanding the after-hours move, IBM shares are up about 13% so far this year, outperforming the S&P 500 index, which is up 6% over the same period.

Executives will discuss the report with analysts on a conference call starting at 5 p.m. ET.

This is breaking news. Please check back for updates.

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