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A customer tries on the Apple Vision Pro headset during the product launch at an Apple Store in New York City on Feb. 2, 2024.

Angela Weiss | Afp | Getty Images

The Vision Pro, the new virtual reality headset from Apple, can transport you to Hawaii or the surface of the moon.

It displays high-resolution computer graphics a few millimeters from the user’s eyes, all while allowing the user to control a desktop-like interface using their eyes and subtle hand gestures. The Vision Pro provides a preview of what using a computer could be like in five years, early adopters say.

The Vision Pro starts at $3,499. After adding storage and accessories such as straps, the whole package can cost as much as $4,500.

That’s a lot more expensive than competing headsets, such as Meta’s Quest 3, which starts at $499. It’s pricier than Meta’s high-end headset, the Quest Pro, which starts at $999. It’s also more expensive, even after controlling for inflation, than the first iPad ($499) or the first iPhone ($499 with a two-year contract).

The Vision Pro includes lots of pricey state-of-the-art parts. One estimate from research firm Omdia puts the “bill of materials” for the headset at $1,542, and that doesn’t include the costs of research and development, packaging, marketing or Apple’s profit margin.

The most expensive part in the headset is the 1.25 inch Sony Semiconductor display that goes in front of the user’s eye.

It’s a key component that helps the virtual experience feel more realistic than previous consumer headsets. The displays have a lot of pixels and lifelike colors, and are built with state-of-the-art manufacturing techniques.

Apple pays about $228 for the “Micro OLED” displays it uses, according to the Omdia estimate. Each Vision Pro needs two of them, one for each eye. Sony Semiconductor declined CNBC’s request to comment for this story.

The Vision Pro displays are the latest example of Apple embracing a new kind of display technology at a larger scale and earlier than the rest of the electronics industry.

Apple’s usage of LCD touchscreens for the first iPhone in 2007, and its later transition to organic LEDs or OLED displays with the iPhone X in 2017, upended existing supply chains and, after Apple shipped millions of units, ultimately drove the cost of the parts for the entire industry down.

Apple has a massive effect on the display industry, said Jacky Qiu, co-founder of OTI Lumionics, which makes materials for manufacturing micro LED panels. He said display makers fight for Apple’s business, which can be make or break for these companies.

“Apple is now the biggest player in terms of OLEDs, in terms of displays. They are the ones that are basically taking all the high-margin displays, all the stuff that is the high-spec type of stuff that is allowing the panel makers today to become profitable,” Qiu said.

“You look at the display business, you either work for Apple and make the iPhone screens and you’re profitable, or you don’t, and you lose money. It’s as brutal as that,” Qiu said.

Micro OLED

The Vision Pro’s displays are a defining feature. They’re packed with pixels and are sharper than any competing headset.

It’s one of the main points that Meta CEO Mark Zuckerberg complimented when comparing the $499 Quest 3 headset to Apple’s headset.

“Apple’s screen does have a higher resolution and that’s really nice,” Zuckerberg said in a video posted on his Instagram page, while saying that Quest’s screens are brighter.

“What’s so revolutionary about the OLED displays that are in the Vision Pro, the difference between Micro OLED and the OLED that you find on a television in your living room is that the pixels are actually a lot denser, they’re smaller and they’re more compact,” said Wayne Rickard, CEO of Terecircuits, a company that makes materials and techniques for display manufacturing.

An Apple Vision Pro headset is displayed during the product release at an Apple Store in New York City on Feb. 2, 2024.

Angela Weiss | AFP | Getty Images

According to a teardown analysis from repair firm iFixit, each Vision Pro display has a resolution of 3660 by 3200 pixels. That’s more pixels per eye than the iPhone 15, which has a screen resolution of 2556 by 1179 pixels. Meta’s Quest 3 comes in at a resolution of 2,064 by 2,208 per eye.

The Vision Pro’s screens are much smaller than the iPhone’s screen, which makes the pixels closer together, and more difficult to manufacture. The Vision Pro displays have 3,386 pixels per inch versus the iPhone 15, which has about 460 pixels per inch on its display.

In total, Apple says the Vision Pro’s displays have more than 23 million total pixels.

They’re some of the densest displays ever built. According to iFixit, 54 Vision Pro pixels can fit in a single iPhone pixel, and each pixel is about 7.5 microns from the next pixel, a measurement called “pixel pitch,” according to Apple’s specifications.

The Apple Vision Pro home screen.

Todd Haselton | CNBC

“With Micro LEDs in particular, it can get down to about below 10 microns. For comparison, a red blood cell might be about 20 microns, so half the size of a red blood cell,” Rickard said.

Apple opted for high-resolution displays so they’d be closer to simulating reality when using the headset’s passthrough mode, which uses outward-facing cameras to show video of the real world inside the headset. It also helps users read text or numbers in virtual reality. It helps remove the “screen door” effect of other headsets where you can see the pixels.

VR headsets need pixel-dense displays because the user’s eyes are so close to the screen. TVs have significantly fewer pixels, but it doesn’t matter because viewers are feet away.

The production of this kind of display requires cutting-edge manufacturing. For example, most displays are built on a backplane made out of glass. The Vision Pro displays are so pixel-dense that they use a silicon backplane, much like a semiconductor.

‘An incredible amount of technology packed into the product’

The new Apple Vision Pro headset is displayed during the Apple Worldwide Developers Conference in Cupertino, California, on June 5, 2023.

Justin Sullivan | Getty Images

The second most expensive part in the Vision Pro is the company’s main processor, which includes Apple’s M2 chip, the same chip it uses in the MacBook Air, and the R1 chip, which is a custom processor to handle video feeds and other sensors on the device.

Bill of materials estimates don’t take into account research and development costs, packaging or shipping. They also don’t take into account capital expenditures that can add up-front costs to big parts orders, but they’re useful for people in the manufacturing world to get an idea of how expensive the parts are in any given device.

Display technologies embraced by Apple typically come down in price after Apple makes them mainstream and as multiple suppliers compete for business.

“South Korean suppliers like Samsung Display and LG Display have shown their interest in this technology. Chinese suppliers like Seeya and BOE are also small-scale mass-produced [OLED on silicon] products,” said Jay Shao, Omdia analyst for displays, in an email. He expects the costs for Vision Pro spec screens to come down in the coming years.

Apple declined to comment, but Apple CEO Tim Cook is not a fan of cost estimates and teardowns. “I’ve never seen one that’s even close to accurate,” he said on an earnings call in 2015.

Apple doesn’t typically discuss its suppliers, but in February, Cook was asked about the device’s price tag on an earnings call.

“If you look at it from a price point of view, there’s an incredible amount of technology packed into the product,” Cook said.

He mentioned some of the most expensive parts in the device and emphasized the R&D costs that Apple spent developing it.

“There’s 5,000 patents in the product, and it’s built on many innovations that Apple has spent multiple years on from silicon to displays and significant AI and machine learning. All the hand tracking, the room mapping, all of this stuff is driven by AI, and so we’re incredibly excited about it,” Cook continued.

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How TikTok’s rise sparked a short-form video race

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How TikTok’s rise sparked a short-form video race

TikTok’s grip on the short-form video market is tightening, and the world’s biggest tech platforms are racing to catch up.

Since launching globally in 2016, ByteDance-owned TikTok has amassed over 1.12 billion monthly active users worldwide, according to Backlinko. American users spend an average of 108 minutes per day on the app, according to Apptoptia.

TikTok’s success has reshaped the social media landscape, forcing competitors like Meta and Google to pivot their strategies around short-form video. But so far, experts say that none have matched TikTok’s algorithmic precision.

“It is the center of the internet for young people,” said Jasmine Enberg, vice president and principal analyst at Emarketer. “It’s where they go for entertainment, news, trends, even shopping. TikTok sets the tone for everyone else.”

Platforms like Meta‘s Instagram Reels and Google’s YouTube Shorts have expanded aggressively, launching new features, creator tools and even considering separate apps just to compete. Microsoft-owned LinkedIn, traditionally a professional networking site, is the latest to experiment with TikTok-style feeds. But with TikTok continuing to evolve, adding features like e-commerce integrations and longer videos, the question remains whether rivals can keep up.

“I’m scrolling every single day. I doom scroll all the time,” said TikTok content creator Alyssa McKay.

But there may a dark side to this growth.

As short-form content consumption soars, experts warn about shrinking attention spans and rising mental-health concerns, particularly among younger users. Researchers like Dr. Yann Poncin, associate professor at the Child Study Center at Yale University, point to disrupted sleep patterns and increased anxiety levels tied to endless scrolling habits.

“Infinite scrolling and short-form video are designed to capture your attention in short bursts,” Dr. Poncin said. “In the past, entertainment was about taking you on a journey through a show or story. Now, it’s about locking you in for just a few seconds, just enough to feed you the next thing the algorithm knows you’ll like.”

Despite sky-high engagement, monetizing short videos remains an uphill battle. Unlike long-form YouTube content, where ads can be inserted throughout, short clips offer limited space for advertisers. Creators, too, are feeling the squeeze.

“It’s never been easier to go viral,” said Enberg. “But it’s never been harder to turn that virality into a sustainable business.”

Last year, TikTok generated an estimated $23.6 billion in ad revenues, according to Oberlo, but even with this growth, many creators still make just a few dollars per million views. YouTube Shorts pays roughly four cents per 1,000 views, which is less than its long-form counterpart. Meanwhile, Instagram has leaned into brand partnerships and emerging tools like “Trial Reels,” which allow creators to experiment with content by initially sharing videos only with non-followers, giving them a low-risk way to test new formats or ideas before deciding whether to share with their full audience. But Meta told CNBC that monetizing Reels remains a work in progress.

While lawmakers scrutinize TikTok’s Chinese ownership and explore potential bans, competitors see a window of opportunity. Meta and YouTube are poised to capture up to 50% of reallocated ad dollars if TikTok faces restrictions in the U.S., according to eMarketer.

Watch the video to understand how TikTok’s rise sparked a short form video race.

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Elon Musk’s xAI Holdings in talks to raise $20 billion, Bloomberg News reports

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Elon Musk's xAI Holdings in talks to raise  billion, Bloomberg News reports

The X logo appears on a phone, and the xAI logo is displayed on a laptop in Krakow, Poland, on April 1, 2025. (Photo by Klaudia Radecka/NurPhoto via Getty Images)

Nurphoto | Nurphoto | Getty Images

Elon Musk‘s xAI Holdings is in discussions with investors to raise about $20 billion, Bloomberg News reported Friday, citing people familiar with the matter.

The funding would value the company at over $120 billion, according to the report.

Musk was looking to assign “proper value” to xAI, sources told CNBC’s David Faber earlier this month. The remarks were made during a call with xAI investors, sources familiar with the matter told Faber. The Tesla CEO at that time didn’t explicitly mention any upcoming funding round, but the sources suggested xAI was preparing for a substantial capital raise in the near future.

The funding amount could be more than $20 billion as the exact figure had not been decided, the Bloomberg report added.

Artificial intelligence startup xAI didn’t immediately respond to a CNBC request for comment outside of U.S. business hours.

Faber Report: Elon Musk held call with current xAI investors, sources say

The AI firm last month acquired X in an all-stock deal that valued xAI at $80 billion and the social media platform at $33 billion.

“xAI and X’s futures are intertwined. Today, we officially take the step to combine the data, models, compute, distribution and talent,” Musk said on X, announcing the deal. “This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach.”

Read the full Bloomberg story here.

— CNBC’s Samantha Subin contributed to this report.

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Alphabet jumps 3% as search, advertising units show resilient growth

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Alphabet jumps 3% as search, advertising units show resilient growth

Alphabet CEO Sundar Pichai during the Google I/O developers conference in Mountain View, California, on May 10, 2023.

David Paul Morris | Bloomberg | Getty Images

Alphabet‘s stock gained 3% Friday after signaling strong growth in its search and advertising businesses amid a competitive artificial intelligence environment and uncertain macro backdrop.

GOOGL‘s pace of GenAI product roll-out is accelerating with multiple encouraging signals,” wrote Morgan Stanley‘s Brian Nowak. “Macro uncertainty still exists but we remain [overweight] given GOOGL’s still strong relative position and improving pace of GenAI enabled product roll-out.”

The search giant posted earnings of $2.81 per share on $90.23 billion in revenues. That topped the $89.12 billion in sales and $2.01 in EPS expected by LSEG analysts. Revenues grew 12% year-over-year and ahead of the 10% anticipated by Wall Street.

Net income rose 46% to $34.54 billion, or $2.81 per share. That’s up from $23.66 billion, or $1.89 per share, in the year-ago period. Alphabet said the figure included $8 billion in unrealized gains on its nonmarketable equity securities connected to its investment in a private company.

Adjusted earnings, excluding that gain, were $2.27 per share, according to LSEG, and topped analyst expectations.

Read more CNBC tech news

Alphabet shares have pulled back about 16% this year as it battles volatility spurred by mounting trade war fears and worries that President Donald Trump‘s tariffs could crush the global economy. That would make it more difficult for Alphabet to potentially acquire infrastructure for data centers powering AI models as it faces off against competitors such as OpenAI and Anthropic to develop largely language models.

During Thursday’s call with investors, Alphabet suggested that it’s too soon to tally the total impact of tariffs. However, Google’s business chief Philipp Schindler said that ending the de minimis trade exemption in May, which created a loophole benefitting many Chinese e-commerce retailers, could create a “slight headwind” for the company’s ads business, specifically in the Asia-Pacific region. The loophole allows shipments under $800 to come into the U.S. duty-free.

Despite this backdrop, Alphabet showed steady growth in its advertising and search business, reporting $66.89 billion in revenues for its advertising unit. That reflected 8.5% growth from the year-ago period. The company reported $8.93 billion in advertising revenue for its YouTube business, shy of an $8.97 billion estimate from StreetAccount.

Alphabet’s “Search and other” unit rose 9.8% to $50.7 billion, up from $46.16 billion last year. The company said that its AI Overviews tool used in its Google search results page has accumulated 1.5 billion monthly users from a billion in October.

Bank of America analyst Justin Post said that Wall Street is underestimating the upside potential and “monetization ramp” from this tool and cloud demand fueled by AI.

“The strong 1Q search performance, along with constructive comments on Gemini [large language model] performance and [AI Overviews] adoption could help alleviate some investor concerns on AI competition,” Post wrote in a note.

WATCH: Gemini delivering well for Google, says Check Capital’s Chris Ballard

Gemini delivering well for Google, says Check Capital's Chris Ballard

CNBC’s Jennifer Elias contributed to this report.

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