Gen AI and AR/VR: Unintended Consequences, Unproven Mainstream Appeal

 Over the past few months, I’ve been reading with increasing fascination the tech segment’s obsession with high-profile apps like ChatGPT, the poster child of generative AI apps that have burst on the scene.

In my more than 25 years in technology, I’ve never seen anything attract the attention of a new capability like Gen AI. More intriguing is not merely the obsession but the fact that many high-profile companies have been caught off guard by the media and customer interest and still can’t clearly articulate how they’ll be able to participate in the industry’s mad gold rush.Equally beguiling is how the industry is waiting with bated breath in anticipation of Apple’s presumed unveiling of its AR/VR products at its WWDC conference in June or later in the year. While most companies with existing AR/VR products (Meta comes to mind) would generally dread a big competitor like Apple getting into the category because of its industry clout and brand appeal, this may not be the case.

Let me explain.

Tepid Appeal of Current MR, VR Headsets

Noted analyst Ming-Chi Kuo thinks that investors have, up to now, overstated consumers’ genuine interest and demand for mixed reality and virtual reality headsets. Apple’s entry into the AR and VR space might change that.

Recently, Kuo wrote that consumers might not be quite ready to adopt AR and VR just yet as there isn’t enough compelling proof that augmented-reality headsets will become the newest craze in consumer electronics.In his opinion, the mixed-reality headset from Apple is “perhaps the final opportunity for convincing investors that the AR/MR headset device might have a shot to be the next star product in consumer electronics.”

Kuo doesn’t make this assertion without evidence, noting that there has been a decline in the market-wide manufacturing and sales of virtual reality headsets.

A telling example: Sony has decreased their PS VR2 headset production forecast by 20% for 2023. Moreover, Meta’s Quest Pro had only delivered 300,000 units. Pico, the biggest AR/VR headsets manufacturer in China, fell more than 40% short of its shipping targets in 2022. These facts do not characterize the AR/VR headset as mainstream.

All Eyes on WWDC 2023

Against this not-very-exciting market backdrop, Apple is rumored to unveil its long-anticipated mixed-reality headset. Kuo has publicly stated that he thinks the gadget will debut in the third quarter of this year, although many others believe it will debut at WWDC 2023.

Tim Cook has repeatedly expressed his support for an Apple augmented reality headset. However, other Apple engineers reportedly worry that the company’s entry into virtual and augmented reality might be a costly failure as it may not be ready for prime time from a relevant usage model standpoint.