Can Apple Take AR And VR To Mainstream?

Can Apple Take AR And VR To Mainstream?
June 7, 2017
Craig Federighi, Apple’s senior vice president of software engineering, speaks about augmented reality Monday in San Jose, Calif.


Apple Inc. finally made real its interest in the nascent markets of both augmented reality and virtual reality, a move that will likely push at least AR more into the mainstream and potentially drive future iPhone sales.


At its Worldwide Developers Conference in San Jose, Calif. on Monday, AppleAAPL, +0.19%  made a slew of announcements for software developers, including a home speaker to rival products by Amazon and Google.


And while Apple’s costly consumer HomePod device got the most attention, Apple’s embrace of the two evolving reality-altering technologies with new software developer tools was focused on the future. Apple said the next version of its desktop operating system, Mac OS High Sierra, will have support for virtual-reality content creation for the first time, so developers can create immersive gaming, 3D and VR content on the Mac. It is also working with other virtual-reality companies, such as Unity Technologies and Epic Games, bringing their VR tools to the Mac.


But its focus on augmented reality is really expected to help jump-start that young market for consumers, who have only seen augmented reality in mainstream use with the “Pokemon Go” game. Apple said as part of version 11 of its iOS for the iPhone and iPad, it will offer a developer kit called ARKit. Using the built-in cameras, powerful processors and motion sensors in Apple’s mobile devices, developers will be able to create games, shopping experiences and other apps by building virtual content on top of real-world scenes.


“A lot of the industry has been waiting for someone like Apple to come in and legitimize the space,” said Tom Mainelli, an IDC analyst. “Today was the first step.” Mainelli said that the long-term future of AR, like VR, is more about futuristic geeky goggles and big screens. “For the near term, it’s going to happen on smartphones,” he said. Alphabet Inc.’s GOOG, +0.43% Google has been in this space for a while, he said. “Google Tango is a very robust AR platform. But it is very compute intensive.”


Apple CEO Tim Cook has been talking about the potential for augmented reality and the iPhone for about a year, ever since he mispronounced “Pokemon Go” and made vague hints about its possibilities for Apple, but today’s news was the biggest concrete step forward in that direction.


“It preserves and extends the value of the iPhone franchise,” said Frank Gillett, a Forrester Research analyst. “If they didn’t do this, I would have wondered.”


Apple said that the new developer kit will be available today and that the resulting AR apps created will also run on some older iPhones — the iPhone 6S, 6S Plus, SE, 7 and 7 Plus. IDC analysts estimate that the sales of those phones combined have an approximate installed base of about 250 million to 300 million users.


Any new augmented-reality-infused apps will undoubtedly run best in whatever future products Apple launches next, yet another reason for consumers to buy the next shiny iPhone. So while Apple’s moves may help launch AR into the mainstream, investors want AR to jump-start the decline in iPhone sales, which fueled Apple’s fiscal 2016 year-over-year revenue decline. With AR, Apple has dual goals: Drive iPhone sales back to growth, and give developers and consumers new experiences in its ecosystem that will keep them there.


These moves are definitely the right ones amid an enormous amount of speculation, both hopeful and pessimistic, surrounding the next iPhone launch. But execution will be key.

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