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Apple Vision Pro

Source: Apple

Apple‘s new Vision Pro headset has sparked a resurgence of interest in head-worn computers that immerse users in a virtual world.

Engineers have been dreaming about virtual reality since 1968 when a professor at the University of Utah built the first 3D VR headset, and since then some of the most powerful consumer electronics companies have released headsets, including Nintendo, Microsoft, Meta, Google, and Sony. None have been a hit.

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Now Apple’s at the table and virtual reality experts and developers say it has a chance to succeed where others haven’t.

“When people ask me what’s really special about this announcement, in one word, it’s Apple. The largest tech company in the world and also the most responsible,” said Ori Inbar, co-founder of Superventures and the CEO of Augmented World Expo, an industry conference. “They always put everything behind every product they put out there. And that’s exactly the message they’re sending to the XR industry, but also to everyone else out there.”

Apple’s reputation and record afford it the benefit of the doubt when it comes to genuinely new technologies, and many consumers already own and like Apple’s products.

Apple commercialized the success of multitouch displays with the iPhone, which transformed the smartphone industry by showing the world a new way to interact with phones. It may be able to replicate that in the VR industry with the Vision Pro’s gesture and voice-based user interface. Unlike other headsets, it doesn’t require a controller.

“Part of the Apple effect is they’ve built up this brand equity, they’ve done it time and time again, across multiple categories, whether it’s the watch, music player, and of course, the smartphone,” said Tipatat Chennavasin, general partner at the Venture Reality Fund. “What I think is really interesting about it, too, is they clearly laid out for their vision for the future — this is the next iPhone, the next big platform.”

The Apple Vision Pro is significantly more powerful than nearly all competing products on the market. It’s equipped with two high-definition screens, a battery of cameras and sensors, and custom processors that reduce latency and lag. Put simply: It can do more than any other headset.

The increased horsepower under Apple’s goggles has also enabled a relatively new concept, sometimes called “XR,” “mixed reality,” or “passthrough,” or, as Apple dubs it, “spatial computing.”

The cameras on the outside of the Vision Pro can display the real world in near-real time inside the headset, which makes the technology less isolating, and addresses one long-time issue with virtual reality: Users can’t see what’s around them while they’re in virtual reality.

But Apple also has to change the public perception of virtual reality. The moment that everyday consumers wear headsets on a daily basis may still be years away.

Huge specs

The new Apple Vision Pro headset is displayed during the Apple Worldwide Developers Conference on June 05, 2023 in Cupertino, California.

Justin Sullivan | Getty Images

One notable aspect of Apple’s Vision Pro is that it has a lot of raw power and expensive parts. Past initial Apple products didn’t emphasize processor speed, display resolution, or specifications.

The Vision Pro does. A short and incomplete list of its components we know so far:

  • Two Micro-OLED displays about an inch in diameter, each with the resolution of over a 4K television.
  • An Apple M2 processor — the same as in a laptop — and a specialized R1 processor for cameras and other visuals.
  • Eye tracking
  • Six microphones
  • 12 cameras and five sensors for monitoring hand gestures

All these specs put together means that the Apple Vision Pro operates at a higher level of fidelity than products currently on the market, like Meta’s $299 Quest 2, which uses a mobile processor and has lower resolution screens.

It also costs a whole lot more: It costs at least $3,499, and likely even more if users opt for custom lenses or other potential upgrades, like storage.

The powerful specs allow the Vision Pro to display the outside world through video feeds on the inside of the headset in real time, making it the first device to do both high-quality VR, which transports users to a virtual world, and AR, which integrates virtual objects into the real world.

“Apple seems to be all in on the notion that it will let you see out, but it will let you see out using cameras and passthrough and very, very, very, low latency and very, very, very, high-powered computing and processing applied to the problem,” said Avi Greengart, analyst at Techsponential, who demoed the headset earlier this week at Apple’s campus.

That’s compared to rival devices like Magic Leap and Microsoft Hololens, which use transparent displays, that require less processing power but offer lower-quality images.

This level of visual quality means that demos can be better, and that developers don’t have to limit themselves based on the hardware. There’s headroom for new experiences that require a lot of processing power.

It also establishes a floor for virtual reality experiences going forward: Once people have tried an Apple headset, with thousands of dollars of computing gear, it will be more difficult to use a cheaper headset without seeing the tradeoffs.

“Apple is unapologetically saying, in order to do VR, or AR, or what they’re calling ‘spatial computing,’ this is the experience you need to offer, and that’s the price point it’s going to cost,” said Greengart. “Anyone else coming out with a product at that price point would simply be dismissed as niche. But Apple, because of its history with consumer products, and because of its history iterating, you can expect the experience gets better over time, and the price comes down — well, hopefully it comes down.”

A new interface

Apple Vision Pro

Source: Apple

Just as the iPhone did, the Apple Vision Pro introduces a new kind of user interface.

The iPhone introduced multi-touch screens, replacing styluses and mechanical keyboards, and enabled web browsing and full-color maps on a pocket device.

“The user experience is always the most important aspect. The most important part of the iPhone wasn’t shrinking it down, the display quality, the multi-touch, but it was making that UX feel good and magical,” Chennavasin said.

The Apple Vision Pro replaces controllers with simple gestures. The user’s eyes become the cursor and a simple tap of the thumb and index finger selects a button.

“No other headset has really introduced eye-plus-pinch as the main interaction modality,” said Jamin Hu, technical chief of Doublepoint, a private firm working on software to enable gesture-based interactions. “Apple is the first one that we’ve seen focusing on building their entire operating system to support eye tracking.”

Apple Vision Pro

Source: Apple

Eye tracking often uses small sensors to see where the user’s gaze is resting. It works well, according to people who had controlled hands-on demos earlier this week. “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,” wrote CNBC’s Steve Kovach.

The controller-less, gesture-based interface has been a goal of the VR industry for years.

“I think it’s pretty well known in the industry that eye-plus-pinch is magical. It’s even faster than the computer mouse. And it’s easier to learn,” said Hu.

Apple even brought up its record on new computer interfaces as one reason to believe in the potential of Vision Pro.

“So in the same way that Mac introduced us to personal computing and iPhone introduced us to mobile computing, Apple Vision Pro will introduce us to spatial computing,” Apple CEO Tim Cook said at the launch.

The Apple ecosystem

Apple CEO Tim Cook stands next to the new Apple Vision Pro headset.

Justin Sullivan | Getty Images News | Getty Images

The VR industry has waited years for Apple’s formal entry. Developers and experts believed Apple could set the standard once it launched its own headset. It invented the iPhone, and it could be inventing the next major mainstream computing product now.

“You have this element that Apple never comes into an industry until they really know this is going to be something special,” said Sean Mann, CEO of RP1, a technology firm working to enable immersive online experiences.

Apple is likely to have the strongest pipeline of apps that could take advantage of the unique aspects of a virtual reality headset. It already has millions of software developers and the Vision Pro will support iPhone and iPad apps at launch. No other headset has that.

“Apple has the unique ability to catalyze developer interest in new platforms,” Greengart said. “For the Apple Vision Pro, the App Store is going to be there on day one.”

Plus, Apple has a product ecosystem it can integrate with, from iPhones, Apple Watches, and even the Mac. The headset can even function as a massive Mac monitor for getting work done.

Apple also has retail stores that are well-suited to be a first-experience in virtual reality for people who are curious about the technology. Apple’s headset needs significant configuration, including head scans and custom lenses for people who wear glasses — but if any company was well-suited to providing those demos to give them the best chance to elicit a “wow,” it’s Apple.

“No one else in the industry has what Apple has. Apple has the phone, they have the watch, they have the desktop, and now they have a headset, and they all work with each other,” Mann said. “Something that I capture on my cell phone now could easily be shown in my new Vision Pro, and that ecosystem doesn’t exist in any other VR manufacturer.”

Getting developers excited for an untapped market

Source: Apple

The industry is still nascent. Data from Forrester, a research firm, found that 79% of online adults don’t currently use a VR headset.

“It can be read as, ‘My gosh, most people aren’t going to use this device’ or it can be read as, ‘Hey, there’s an opportunity to now penetrate an untapped market with something that will help everyday users,” said Mike Proulx, a research director at Forrester.

It’s expected to be a low-volume product, however, selling hundreds of thousands of units over the year, according to TFI Securities analyst Ming-Chi Kuo, versus the tens of millions of iPhones Apple sells in a quarter.

But many people in the VR industry think that’s fine for this kind of product, which isn’t meant for the mainstream yet due to its price, its clunky battery pack and its novelty.

Instead, it’s possible to see the Apple Vision Pro as a sort of developer’s kit. Sure, some Apple fans and enthusiasts will buy it, and everyone wants to try it, but what it’s really doing is kicking off a gold rush for software developers to make must-have apps for the platform.

Eventually, like other computers, prices for Apple’s Vision could come down, updated models could become slimmer and lighter, and it could become a must-have like a smartphone.

“I talked to a lot of developers who are already in the XR space, and all of them have said they’re interested in getting this headset and getting their hands on it and using it. Every single one of them,” said Anshel Sag, an analyst at Moor Insights.

When the iPhone introduced multi-touch, advanced phone cameras, and mobile internet, it birthed Uber and Instagram. Now, it costs $3,500 to start tinkering with software that could become an everyday experience for regular people as the market potentially expands.

“If you could’ve gotten the iPhone two or three years before it was released, and had access to understand the hardware, don’t you go for that? How much would you pay for that? This is the future today,” Chennavasin said. “If I was a developer, $3,500 is a small price to pay for that.”

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Mark Zuckerberg slams Apple on its lack of innovation and ‘random rules’

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Mark Zuckerberg slams Apple on its lack of innovation and 'random rules'

Meta CEO Mark Zuckerberg appears at the Meta Connect event in Menlo Park, California, Sept. 25, 2024.

David Paul Morris | Bloomberg | Getty Images

Meta CEO Mark Zuckerberg slammed rival tech giant Apple for lackluster innovation efforts and “random rules” in a lengthy podcast interview on Friday.

“On the one hand, [the iPhone has] been great, because now pretty much everyone in the world has a phone, and that’s kind of what enables pretty amazing things,” Zuckerberg said in an episode of the “Joe Rogan Experience.” “But on the other hand … they have used that platform to put in place a lot of rules that I think feel arbitrary and [I] feel like they haven’t really invented anything great in a while. It’s like Steve Jobs invented the iPhone, and now they’re just kind of sitting on it 20 years later.”

Zuckerberg added that he thought iPhone sales were struggling because consumers are taking longer to upgrade their phones because new models aren’t big improvements from prior iterations.

“So how are they making more money as a company? Well, they do it by basically, like, squeezing people, and, like you’re saying, having this 30% tax on developers by getting you to buy more peripherals and things that plug into it,” Zuckerberg said. “You know, they build stuff like Air Pods, which are cool, but they’ve just thoroughly hamstrung the ability for anyone else to build something that can connect to the iPhone in the same way.”

Apple defends itself from pushback from other companies by saying that it doesn’t want to violate consumers’ privacy and security, according to Zuckerberg. But he said that the problem would be solved if Apple fixed its protocol, like building better security and using encryption.

“It’s insecure because you didn’t build any security into it. And then now you’re using that as a justification for why only your product can connect in an easy way,” Zuckerberg said.

Zuckerberg said that if Apple stopped applying its “random rules,” Meta’s profit would double.

He also took shots at Apple’s Vision Pro headset, which had disappointing U.S. sales. Meta sells its own virtual headsets called the Meta Quest.

“I think the Vision Pro is, I think, one of the bigger swings at doing a new thing that they tried in a while,” Zuckerberg said. “And I don’t want to give them too hard of a time on it, because we do a lot of things where the first version isn’t that good, and you want to kind of judge the third version of it. But I mean, the V1, it definitely did not hit it out of the park.”

“I heard it’s really good for watching movies,” he added.

Apple did not immediately respond to a request for comment from CNBC.

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Why Meta had to ‘bend the knee to Trump’ ahead of his inauguration

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Why Meta had to 'bend the knee to Trump' ahead of his inauguration

Jakub Porzycki | Nurphoto | Getty Images

Mark Zuckerberg’s announcement this week that Meta would pivot its moderation policies to allow more “free expression” was widely viewed as the company’s latest effort to appease President-elect Donald Trump. 

More than any of its Silicon Valley peers, Meta has taken numerous public steps to make amends with Trump since his election victory in November.

That follows a highly contentious four years between the two during Trump’s first term in office, which ended with Facebook — similar to other social media companies — banning Trump from its platform.

As recently as March, Trump was using his preferred nickname of “Zuckerschmuck” when talking about Meta’s CEO and declaring that Facebook was an “enemy of the people.”

With Meta now positioning itself to be a key player in artificial intelligence, Zuckerberg recognizes the need for White House support as his company builds data centers and pursues policies that will allow it to fulfill its lofty ambitions, according to people familiar with the company’s plans who asked not to be named because they weren’t authorized to speak on the matter.

“Even though Facebook is as powerful as it is, it still had to bend the knee to Trump,” said Brian Boland, a former Facebook vice president, who left the company in 2020.

Meta declined to comment for this article.

In Tuesday’s announcement, Zuckerberg said Meta will end third-party fact-checking, remove restrictions on topics such as immigration and gender identity and bring political content back to users’ feeds. Zuckerberg pitched the sweeping policy changes as key to stabilizing Meta’s content-moderation apparatus, which he said had “reached a point where it’s just too many mistakes and too much censorship.”

The policy change was the latest strategic shift Meta has taken to buddy up with Trump and Republicans since Election Day.

A day earlier, Meta announced that UFC CEO Dana White, a longtime Trump friend, is joining the company’s board.

And last week, Meta announced that it was replacing Nick Clegg, its president of global affairs, with Joel Kaplan, who had been the company’s policy vice president. Clegg previously had a career in British politics with the Liberal Democrats party, including as a deputy prime minister, while Kaplan was a White House deputy chief of staff under former President George W. Bush.

Kaplan, who joined Meta in 2011 when it was still known as Facebook, has longstanding ties to the Republican Party and once worked as a law clerk for the late conservative Supreme Court Justice Antonin Scalia. In December, Kaplan posted photos on Facebook of himself with Vice President-elect JD Vance and Trump during their visit to the New York Stock Exchange.

Joel Kaplan, Facebook’s vice president of global policy, on April 17, 2018.

Niall Carson | PA Images | Getty Images

Many Meta employees criticized the policy change internally, with some saying the company is absolving itself of its responsibility to create a safe platform. Current and former employees also expressed concern that marginalized communities could face more online abuse due to the new policy, which is set to take effect over the coming weeks. 

Despite the backlash from employees, people familiar with the company’s thinking said Meta is more willing to make these kinds of moves after laying off 21,000 employees, or nearly a quarter of its workforce, in 2022 and 2023. 

Those cuts affected much of Meta’s civic integrity and trust and safety teams. The civic integrity group was the closest thing the company had to a white-collar union, with members willing to push back against certain policy decisions, former employees said. Since the job cuts, Zuckerberg faces less friction when making broad policy changes, the people said.

Zuckerberg’s overtures to Trump began in the months leading up to the election.

Following the first assassination attempt on Trump in July, Zuckerberg called the photo of Trump raising his fist with blood running down his face “one of the most badass things I’ve ever seen in my life.”

A month later, Zuckerberg penned a letter to the House Judiciary Committee alleging that the Biden administration had pressured Meta’s teams to censor certain Covid-19 content.

“I believe the government pressure was wrong, and I regret that we were not more outspoken about it,” he wrote. 

After Trump’s presidential victory, Zuckerberg joined several other technology executives who visited the president-elect’s Mar-a-Lago resort in Florida. Meta also donated $1 million to Trump’s inaugural fund.

On Friday, Meta revealed to its workforce in a memo obtained by CNBC that it intends to shutter several internal programs related to diversity and inclusion in its hiring process, representing another Trump-friendly move.

The previous day, some details of the company’s new relaxed content-moderation guidelines were published by the news site The Intercept, showing the kind of offensive rhetoric that Meta’s new policy would now allow, including statements such as “Migrants are no better than vomit” and “I bet Jorge’s the one who stole my backpack after track practice today. Immigrants are all thieves.”

Recalibrating for Trump

Zuckerberg, who has been dragged to Washington eight times to testify before congressional committees during the last two administrations, wants to be perceived as someone who can work with Trump and the Republican Party, people familiar with the matter said.

Though Meta’s content-policy updates caught many of its employees and fact-checking partners by surprise, a small group of executives were formulating the plans in the aftermath of the U.S. election results. By New Year’s Day, leadership began planning the public announcements of its policy change, the people said. 

Meta typically undergoes major “recalibrations” after prominent U.S. elections, said Katie Harbath, a former Facebook policy director and CEO of tech consulting firm Anchor Change. When the country undergoes a change in power, Meta adjusts its policies to best suit its business and reputational needs based on the political landscape, Harbath said. 

“In 2028, they’ll recalibrate again,” she said.

After the 2016 election and Trump’s first victory, for example, Zuckerberg toured the U.S. to meet people in states he hadn’t previously visited. He published a 6,000-word manifesto emphasizing the need for Facebook to build more community.

The social media company faced harsh criticism about fake news and Russian election interference on its platforms after the 2016 election.

Following the 2020 election, during the heart of the pandemic, Meta took a harder stand on Covid-19 content, with a policy executive saying in 2021 that the “amount of COVID-19 vaccine misinformation that violates our policies is too much by our standards.” Those efforts may have appeased the Biden administration, but it drew the ire of Republicans.

Meta is once again reacting to the moment, Harbath said.

“There wasn’t a business risk here in Silicon Valley to be more right-leaning,” Harbath said.

While Trump has offered few specific policy proposals for his second administration, Meta has plenty at stake.

The White House could create more relaxed AI regulations compared with those in the European Union, where Meta says harsh restrictions have resulted in the company not releasing some of its more advanced AI technologies. Meta, like other tech giants, also needs more massive data centers and cutting-edge computer chips to help train and run their advanced AI models.

“There’s a business benefit to having Republicans win, because they are traditionally less regulatory,” Harbath said.

Meta’s CEO Mark Zuckerberg reacts as he testifies during the Senate Judiciary Committee hearing on online child sexual exploitation at the U.S. Capitol in Washington, U.S., January 31, 2024. 

Evelyn Hockstein | Reuters

Meta isn’t alone in trying to cozy up to Trump. But the extreme measures the company is taking reflects a particular level of animus expressed by Trump over the years.

Trump has accused Meta of censorship and has expressed resentment over the company’s two-year suspension of his Facebook and Instagram accounts following the Jan. 6 attack on the Capitol.

In July 2024, Trump posted on Truth Social that he intended to “pursue Election Fraudsters at levels never seen before, and they will be sent to prison for long periods of time,” adding “ZUCKERBUCKS, be careful!” Trump reiterated that statement in his book, “Save America,” writing that Zuckerberg plotted against him during the 2020 election and that the Meta CEO would “spend the rest of his life in prison” if it happened again.

Meta spends $14 million annually on providing personal security for Zuckerberg and his family, according to the company’s 2024 proxy statement. As part of that security, the company analyzes any threats or perceived threats against its CEO, according to a person familiar with the matter. Those threats are cataloged, analyzed and dissected by Meta’s multitude of security teams.

After Trump’s comments, Meta’s security teams analyzed how Trump could weaponize the Justice Department and the country’s intelligence agencies against Zuckerberg and what it would cost the company to defend its CEO against a sitting president, said the person, who asked not to be named because of confidentiality.

Meta’s efforts to appease the incoming president bring their own risks.

After Zuckerberg announced the new speech policy Tuesday, Boland, the former executive, was among a number of users who took to Meta’s Threads service to tell their followers that they were quitting Facebook. 

“Last post before deleting,” Boland wrote in his post.

Before the post could be seen by any of his Threads followers, Meta’s content moderation system had taken it down, citing cybersecurity reasons. 

Boland told CNBC in an interview that he couldn’t help but chuckle at the situation. 

“It’s deeply ironic,” Boland said.

— CNBC’s Salvador Rodriguez contributed to this report.

WATCH: Meta is returning to free speech tradition, says Facebook’s former chief privacy officer Chris Kelly

Meta is returning to free speech tradition, says Facebook's former chief privacy officer Chris Kelly

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Apple’s market share slides in China as iPhone shipments decline, analyst Kuo says

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Apple's market share slides in China as iPhone shipments decline, analyst Kuo says

Jaap Arriens | Nurphoto | Getty Images

Apple is losing market share in China due to declining iPhone shipments, supply chain analyst Ming-Chi Kuo wrote in a report on Friday. The stock slid 2.4%.

“Apple has adopted a cautious stance when discussing 2025 iPhone production plans with key suppliers,” Kuo, an analyst at TF Securities, wrote in the post. He added that despite the expected launch of the new iPhone SE 4, shipments are expected to decline 6% year over year for the first half of 2025.

Kuo expects Apple’s market share to continue to slide, as two of the coming iPhones are so thin that they likely will only support eSIM, which the Chinese market currently does not promote.

“These two models could face shipping momentum challenges unless their design is modified,” he wrote.

Kuo wrote that in December, overall smartphone shipments in China were flat from a year earlier, but iPhone shipments dropped 10% to 12%.

There is also “no evidence” that Apple Intelligence, the company’s on-device artificial intelligence offering, is driving hardware upgrades or services revenue, according to Kuo. He wrote that the feature “has not boosted iPhone replacement demand,” according to a supply chain survey he conducted, and added that in his view, the feature’s appeal “has significantly declined compared to cloud-based AI services, which have advanced rapidly in subsequent months.”

Apple’s estimated iPhone shipments total about 220 million units for 2024 and between about 220 million and 225 million for this year, Kuo wrote. That is “below the market consensus of 240 million or more,” he wrote.

Apple did not immediately respond to CNBC’s request for comment.

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