Shocking! You Won’t Believe the Jaw-Dropping News About Apple, VR, and the $37 Billion Elephant in the Room in Lex’s Newsletter

Dear reader,

VR is full of stop-starts. Five years ago, I tested a headset from Miami-based start-up Magic Leap that made virtual pink flowers bloom on the carpet in front of me. The walls melted and black holes took their place. It was the most impressive virtual reality show I’ve ever seen. But the $2,300 headphones were too clunky and expensive to go mass-produced. Founder Rony Abovitz has left the company. A few weeks ago, the Financial Times reported that Magic Leap was under consideration licensing its technology to Meta.

Meta, of course, cast its lot with virtual reality two years ago, going so far as to change its name from Facebook. The company hopes headphone sales can ameliorate any declines in digital ad revenue. So far, operating losses attributed to the Reality Labs unit exceed $37 billion.

In the wake of every new VR ad, excitement fails to translate into sales. Go back to 1995 when Nintendo released the Virtual Boy. Gamers have been peeking into this handheld game console to experience the illusion of depth. More recently, manufacturers have launched 3D televisions that are supposed to bring sports events and movies to life. Lots of press, few sales.

Will Apple change all this? Early reviews of the $3,500 Vision Pro VR headset, including that of the FT, praise the comfort of the glasses, the realism of the virtual effects, and the smooth eye and hand tracking technology.

Clearly, it’s way ahead of the competition. But that doesn’t mean it will sell.

Lex sees merit in a future where online interactions aren’t limited to 2D screens on smartphones and laptops. We agree that the future of virtual reality lies in the technology that allows the wearer to see real and virtual worlds. This is the so-called mixed or augmented reality.

But we are not sure that many people want to wear thick glasses on their eyes while working or playing. Especially if they have to tie into a battery pack that only lasts two hours. Will people be lining up around the block to pay the nearly $3,500? And does Apple really expect to catch up on VR R&D with the sales of this headset?

Perhaps the company should have waited until it could release something that more people would wear. To do away with external packs, it needs tiny batteries in the headphones that don’t get hot. Sophisticated displays that can show images on discrete screens are another nice one to have.

But if Apple sweated too long for the perfect product, there was a chance Meta would round up all the best developers and take over the market.

Just days before Apple released its headphones, I went to Santa Clara with the FT’s Patrick McGee for the annual Augmented World Expo (AWE), a conference that brings together developers, founders, and other augmented reality enthusiasts. Magic Leap was there, as was Meta. Indeed, every big name excludes Apple.

There has been a lot of focus on the weight of the hardware and the ability to interact with the real world and have common experiences. Many headphones looked like 80s-style sunglasses. Business use – for architects, surgeons and industrial repairs – played a big role.

Haptics were also big news. This is the idea that to be fully immersed in virtual reality, you have to feel virtual objects as well as see them.

One of the weirdest gadgets I tried was a pair of gloves created by a Seattle-based start-up called HaptX. Attached to a headset and backpack, the gloves allow you to open a virtual faucet and feel virtual water flowing over your hands. They follow the user’s movements, pump air and create resistance with cables to create sensation. It didn’t exactly feel like water, but there was a stark difference between holding your hands under a virtual faucet and pressing them against the countertop in a virtual kitchen.

Gloves are not, it should be stressed, consumer-friendly. They are bulky and heavy and covered in cables and pumps. One day, perhaps, gamers will trade handheld controllers for gloves and companies will use them to perform remote tasks.

I thought of those clumsy gloves when I saw Apple’s VR headset presentation. People expect Apple to set a new standard for the industry when it releases a fine consumer product. That’s what happened with smartphones, MP3 players, and tablets.

But the $3,500 VR headset is somehow still in the works. Nor are they priced for the average Apple customer. For now, these glasses are only for early adopters who are intensely focused on new technologies.

Elsewhere in technology

There have been Very of Apple Vision Pro headset reviews this week. Besides the FTs, I liked it this from the Atlantic recording the author’s mixed feelings about the idea that glasses are the future of computing.

Two years after Lina Khan’s tenure at the Federal Trade Commission, Bloomberg takes stock of the “most aggressive trustbuster” in decades.

This Vanity Fair story about the unhappy writers room from the TV series Lost takes place a few miles south of San Francisco in Los Angeles. It’s a great insider account about what looks like a deeply toxic workplace.

Have fun for the rest of the week,

Elaine Moore
Deputy head of the Lex

lexfeedback@ft.com