Apple expected to reveal mixed-reality headset at developer conference

By Stephen Nellis

CUPERTINO, California (Reuters) – Apple Inc (NASDAQ:) is expected to unveil a mixed-reality headset at its annual software developer conference on Monday, its first big move into a new product category since the introduction of the Apple Watch nine years ago.

The launch will see Apple test a market crowded with devices that have yet to gain traction with consumers and put it in direct competition with Facebook-owner Meta Platforms.

Like Meta’s Quest Pro from last year and Quest 3 announced last week, Apple’s device is likely to blend a video feed from the outside world with a virtual world displayed on screens inside the headset.

Analysts expect Apple’s headset to come with premium features including a high-quality display and hand-tracking so it can be controlled without an external controller. It’s also likely to cost much more than the planned $500 Quest 3.

Investors and tech fans alike will be focusing on how much Apple’s view of the virtual reality market overlaps with Meta’s. Meta Chief Executive Mark Zuckerberg has outlined his vision for using headsets to dip in and out of a “metaverse” where people can meet virtually to work, play and spend.

In addition to Meta, Sony (NYSE:) Group Corp and ByteDance-owned Pico both recently released virtual reality devices.

Research firm IDC said companies sold a total of 8.8 million headsets last year, down 20.9% from 2021. In the first quarter of 2023, sales more than halved.

Apple’s presentation on Monday is mostly aimed at sparking the imaginations of the thousands of software developers who will stream into Apple Park for a keynote address at 1 p.m. Eastern Time (1700 GMT).

Apple will also deliver updates on its operating systems for iPhones, iPads and Mac computers.

Investors will also look for updates on CarPlay, Apple’s software for vehicles, which the company said last year would start to power more dashboard functions.