With Apple Vision Pro now a low-volume, niche device, Apple is likely to pivot to mass-market "ambient computing" wearables like smart glasses and smart ear buds, an Apple analyst says.
Google parent Alphabet and Facebook parent Meta Platforms already have shifted their development focus to smart glasses and away from bulky headsets for virtual reality and mixed reality, Deepwater Asset Management managing partner Gene Munster said in a blog post Friday.
"I believe the annual market for smart glasses will reach hundreds of millions of units over the next decade, leading Apple to refocus its spatial computing initiatives to be more in line with Meta and Google wearables," Munster said. Deepwater portfolio research analyst Brian Baker cowrote the blog post.
The Apple Vision Pro headset is a pricey mixed-reality headset that combines elements of virtual and augmented reality. It's billed as a spatial computing device and is meant for stationary applications in homes and offices. Apple Vision Pro starts at $3,499.
By contrast, smart glasses and similar ambient computing devices are mobile gadgets that can provide relevant information to the wearer depending on their location or situation.
New Smart Glasses Coming From Snap, Meta
"The current goal is making glasses that look and feel like 'normal glasses,' but with generative AI access via voice activation, cameras, and sensors," Munster said. "This means your glasses will understand the physical world around you, ready to provide you any information about it, like 'What kind of plant am I looking at?' or 'Did you see where I left my keys?'"
Current consumer smart glasses include Amazon's Echo Frames and Meta's Ray-Ban Meta smart glasses. Amazon's headset is audio-only and uses the company's Alexa virtual assistant to respond to spoken questions and commands. Meta's smart glasses have similar audio capabilities but also have a built-in camera for taking photos and videos and providing computer vision for Meta's AI.
Next month, Meta and social media rival Snap are expected to announce new smart glasses at separate company events.
Snap will unveil its fifth-generation Snap Spectacles at the company's Partner Summit in Los Angeles on Sept. 17. Meta will introduce its first augmented reality glasses, code-named Orion, on Sept. 25 at its Connect conference in Menlo Park, Calif., according to media reports.
The focus of next-generation smart glasses is on combining fashion, functionality and AI, Munster said. Consumers are looking for easy-to-use tech in a compelling form factor, he said.
Glasses More Useful Than Mixed-Reality Headsets
Apple hasn't given up on Apple Vision Pro, but will likely diversify its lineup of wearable devices in the years ahead, Munster said. That includes coming out with smart glasses that compete with future offerings from Meta and Google, he said.
"My confidence is based on a belief that there is more utility to smart glasses vs. a mixed reality headset, and it would be a costly miss for Apple not to enter the market," Munster said.
He added, "One manifestation of an expanded spatial computing product lineup could include future versions of Air Pods with cameras."
Big Tech companies are looking to create personal devices that can access burgeoning artificial intelligence technology.
Meanwhile, AI gadgets from startups have not caught on. Those devices include Humane's AI Pin wearable, Rabbit's Rabbit 1 handheld, and the Limitless Pendant wearable.
On the stock market today, Apple stock rose a fraction to close at 227.18.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
