Rare dissent at Apple over interactive goggles

When Apple held a corporate retreat in California’s Carmel Valley about five years ago to discuss its next major product, Jony Ive, its longtime design chief, 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, two people who saw the video said. 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 $3,000 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 the company’s design team, including Ive, who left Apple in 2019 and stopped advising the company last year.

An Apple spokesperson 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 as the next wave of computing after the smartphone. Apple CEO 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 business. The experience has been humbling. It has sold about 20 million of its $400 Quest 2 headsets since 2020 and recently cut the price of the Quest Pro, its premium device, to $1,000 from $1,500 amid lacklustre sales.

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

Unlike the iPhone, which incorporated many existing technologies, virtual reality is requiring Apple and others to design new chips and wearable displays, said Matthew Ball, author of “The Metaverse: And How It Will Revolutionize Everything.” “The difficulty of the problem has been far greater than anyone expected,” he added.

Uncertainty about the potential of Apple’s project has led some people who have worked on it to speculate that the company could delay its release, especially in light of the shaky economy, these people said.

Apple is projected to ship fewer than 500,000 headsets in a year, according to Counterpoint Research, a market research firm. In comparison, the company was expected to ship about 40 million Apple Watches after its debut. The modest expectations for the headset speak to the challenges in a category where sales declined 12 per cent last year to $1.1 billion, according to NPD Group, a market research firm.

Some internal sceptics have questioned if the new device is a solution in search of a problem. Unlike the iPod, which put digital songs in people’s pockets, and the iPhone, which combined the abilities of a music player and a phone, the headset hasn’t been driven by the same clarity, these people said.

The product is being birthed during a period of limbo. This year, Ive’s successor overseeing industrial design, Evans Hankey, departed. With design’s leadership in flux, Mike Rockwell, an engineer, has been leading development of the device.

This article originally appeared in The New York Times.