US firm's official entry into segment to motivate more Chinese peers to join in

Apple Inc's augmented reality headset will help accelerate the development of the AR industrial chain in China, and push the product not only for entertainment but also as a productive tool for work, experts said.

The comments came after the US company unveiled its much-anticipated AR headset Vision Pro on Monday in Cupertino, California, which is the first major new product category Apple launched in almost a decade, and is seen by many as the future of computing.

Zhao Siquan, a senior analyst at the China branch of market research company International Data Corp, said Vision Pro has attracted much attention in the industry, with a large portion of supply chain enterprises in hardware components coming from China.

Apple's official entry into the AR market will motivate more Chinese companies to follow up and jointly promote the optimization of the domestic AR industry chain while advancing the development of new display, battery and other components for human-machine interaction, Zhao said.

Unlike rivals' headsets that need additional buttons, dials and levers for control, Apple said the Vision Pro has a fully three-dimensional user interface controlled by "the most natural and intuitive inputs possible — a user's eyes, hands and voice".

Meanwhile, Vision Pro, which resembles high-tech ski goggles, will have its own operating system — visionOS — and a dedicated App Store, and allows users to multitask across different apps in virtual displays.

At the product launch, Tim Cook, CEO of Apple, said: "Today marks the beginning of a new era for computing. Just as the Mac introduced us to personal computing, and iPhone introduced us to mobile computing, Apple Vision Pro introduces us to spatial computing."

Steve Severinghaus, an analyst at research company Insider Intelligence, said differing from Facebook-owner Meta's virtual reality devices which focus on 360-degree immersive virtual experiences, Vision Pro clearly situates the user in their real environment.

For instance, Vision Pro has an exterior display that shows the user's eyes to people in the outside world. The exterior screen goes dark when a user is fully immersed in a virtual world. When a person approaches a user who is in full virtual mode, the headset will show both the user and the outside person to each other.

Despite Apple's optimism about the long-term development of AR, analysts said the high price tag of $3,499 makes the first generation of Vision Pro not necessarily a device for the mass market. It is more like a version for the most dedicated Apple fans, business users and software developers, they said.

Zhao said, "Now, both global and Chinese AR and VR markets are experiencing a decline in shipments, with manufacturers slowing down their new product launches, marketing actions and pace of new content launches."

In the first quarter of this year, the Chinese AR and VR market shipped 173,000 units of devices, marking a year-on-year decrease of 37.6 percent. Among them, 150,000 units were shipped in the VR market, down 42.2 percent year-on-year, but 22,000 units were shipped in the AR market, a year-on-year increase of 35.7 percent, IDC said.

After the release of Vision Pro, most of the top Chinese device makers will also launch new AR or VR products from the end of this year to 2024. Meanwhile, manufacturers without a presence in the sector will also quickly enter the market, which will intensify competition, IDC forecasts.

In the medium to long term, spending on AR and VR in China is expected to hit $13.1 billion by 2026, making it the world's second-largest market, IDC added.

Meanwhile, market research company Counterpoint said as artificial intelligence is essential for understanding the surrounding environment and human beings, it is of high importance to better combine AI with AR.

When it comes to the fundamental question — will VR and AR go from niche to mainstream — consultancy Deloitte said in a report that it all depends on how compelling VR and AR content become.

Well aware of the trend, Apple announced on Monday that it is partnering with Disney to bring the latter's video streaming service to its Vision Pro headsets.