Apple – in Bid to Fuel AR Landscape – Took $1 Billion Annual Hit to Develop Mixed-Reality Headset

A report shows the company has been aggressively spending with hopes for an iPhone-like revolution

Apple store in Chicago, IL
Getty Images

Apple’s been spending more than $1 billion per year to fund its mixed reality headset project, pulling together a team 1,000 staffers to get the job done, according to Bloomberg.

As to what kind of mixed-reality headset can be expected from the iPhone makers, Bloomberg’s report as well as The Information’s paint the picture that the mysterious gadget will be similar to that of Microsoft’s HoloLens, a mixed-reality device targeted at specialized professional niches rather than average consumers due to its large cost.

Microsoft sells HoloLens 2, the device’s second iteration, for $3,500 per unit. It has applications in medical and engineering fields, though at one point the headset was also advertised to consumers by way of “Minecraft.”

Microsoft’s pitch was that a person could wear the device and project blocky environments onto real-world objects, thereby allowing them to construct virtual castles atop their real-world coffee tables. At $3,500 per unit, HoloLens 2 remains out of reach for much of the “Minecraft” crowd.

Such will potentially be the case with Apple’s mixed-reality headset. The headset is said to have similar capabilities to the HoloLens’ “Minecraft” use-case example, with advanced hand tracking, eye tracking, and 8K-resolution displays. As indicated by its apparent price, it may follow HoloLens’ path of being primarily for extreme tech enthusiasts, developers and those in professional specialist roles.

TheWrap has reached out to Apple for comment.

To note: A key differentiator between mixed reality, augmented reality and virtual reality is that the former two are built around the idea of blending virtual elements with the real world, whereas classical VR is about wearing a headset that transports your eyes to somewhere entirely virtual. Another major differentiator is price, as VR headsets typically cost in the hundreds of dollars.