SAN FRANCISCO – When Apple held a corporate retreat in California’s Carmel Valley about five years ago to discuss its next major product, its longtime design chief Jony Ive captivated a room of the company’s 100 top executives with a concept video as polished as an Apple commercial.

The video showed a man in a London taxi donning an augmented reality headset and calling his wife in San Francisco.

“Would you like to come to London?” he asked, according to two people who saw the video. Soon, the couple were sharing the sights of London through the husband’s eyes.

The video excited executives about the possibilities of Apple’s next business-altering device: a headset that would blend the digital world with the real one.

But now, as the company prepares to introduce the headset in June, enthusiasm at Apple has given way to scepticism, said eight current and former employees, who requested anonymity because of Apple’s policies against speaking about future products.

There are concerns about the device’s roughly US$3,000 (S$3,998) price, doubts about its utility and worries about its unproven market.

That dissension has been a surprising change inside a company where employees have built devices – from the iPod to the Apple Watch – with the single-mindedness of a moon mission.

Some employees have defected from the project because of their doubts about its potential, three people with knowledge of the moves said. Others have been fired over the lack of progress with some aspects of the headset, including its use of Apple’s Siri voice assistant, one person said.

Even leaders at Apple have questioned the product’s prospects. It has been developed at a time when morale has been strained by a wave of departures from members of the company’s design team, including Mr Ive, who left Apple in 2019 and stopped advising the company in 2022.

An Apple spokesman declined to comment on the company’s plans for future products.

Apple’s headset is considered a bellwether for virtual and augmented reality. For more than a decade, tech leaders have been hyping it up as the next wave of computing after the smartphone. Apple chief executive Tim Cook told university students last year that in the near future, “you’ll wonder how you lived your life without augmented reality, just like today you wonder: How did people like me grow up without the Internet?”

But the road to deliver augmented reality has been littered with failures, false starts and disappointments, from Google Glass to Magic Leap and from Microsoft’s HoloLens to Meta’s Quest Pro. Apple is considered a potential saviour because of its success combining new hardware and software to create revolutionary devices.

Still, the challenges are daunting.

Meta, Facebook’s parent company, has ploughed billions of dollars into trying to build a virtual reality (VR) business. The experience has been humbling. It has sold about 20 million of its US$400 Quest 2 headsets since 2020 and recently cut the price of the Quest Pro, its premium device, to US$1,000 from US$1,500 amid lacklustre sales.

By comparison, Apple sells more than 200 million iPhones annually with an average selling price of more than US$800.

Unlike the iPhone which incorporated many existing technologies, virtual reality is requiring Apple and others to design new chips and wearable displays, said Mr Matthew Ball, author of The Metaverse: And How It Will Revolutionise Everything.

“The difficulty of the problem has been far greater than anyone expected,” he added.

Seeking to define a nascent market is an aberration for Apple.

“Apple is always pretty good at coming into a market when the market is already established and changing that market,” said Ms Carolina Milanesi, a consumer tech analyst for research firm Creative Strategies. “This is not the case for Apple VR and XR. There’s still a lot of learning.”

The headset looks like ski goggles. It features a carbon fiber frame, a hip pack with battery support, outward cameras to capture the real world and two 4K displays that can render everything from applications to movies, two of the people said. Users can turn a “reality dial” on the device to increase or decrease real-time video from the world around them.

The headset is expected to cost about US$3,000, three of the people said. And it is considered a bridge to a future product, such as augmented reality glasses, that would have broader appeal but require technical breakthroughs.

Because the headset will not fit over glasses, the company has plans to sell prescription lenses for the displays to people who do not wear contacts, a person familiar with the plan said.

During the device’s development, Apple has focused on making it excel for videoconferencing and spending time with others as avatars in a virtual world. The company has called the device’s signature application “copresence”, a word designed to capture the experience of sharing a real or virtual space with someone in another place. It is akin to what Mr Mark Zuckerberg, Facebook’s founder, calls the “metaverse”.

Ms Milanesi said Apple’s experimental approach with the goggles appeared to be more like its execution of the Apple Watch than its introduction of the iPhone. Apple initially portrayed the watch as a miniature extension of an iPhone. After learning what consumers were doing with the watch, the company marketed it more as a fitness accessory akin to a Fitbit.

“It’s not very Apple-like,” Ms Milanesi said. “But Apple is a very, very different company.”
NYTIMES