Apple's Mixed-Reality Headset Clash With Meta To Play Out Same Way As Former's 15-Year Fight With Google's Android, Says Gurman

Apple, Inc. AAPL is widely expected to launch its mixed-reality headset at its Worldwide Developers Conference, which kicks off on June 5.

Bloomberg's Mark Gurman cautioned that the company’s newest product category could be up against a well-entrenched rival offering.

What Happened: Meta Platforms Inc. META is the current leader in XR, which blends augmented and virtual reality, Gurman said in his weekly “Power-On” newsletter. The Mark Zuckerberg-led company continues to update its devices, he added.

This will set the two companies on a warpath over headsets, Gurman said, adding that it could play out in a similar manner as Apple's 15-year fight with Alphabet, Inc.'s GOOGL GOOG Android in the smartphone industry.

Gurman said he expects Apple to immediately own the upscale market with the headsets and Meta to dominate the low-end market. Meta, meanwhile, could benefit in an indirect way as Apple goes about popularizing the mixed-reality headset, the columnist said. The social media giant could use the buzz to pull in customers who might not be able to afford a top-of-the-end model, he added.

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Apple's MR Vs. Quest 3: Meta's next headset iteration Quest 3 will likely launch in October, four months after Apple's MR headset is unveiled, Gurman said. The Quest 3, codenamed “Eureka,” is far lighter and thinner than the Quest 2, which was launched in 2020, he said.

Gurman said he tested the prototype version of the Quest 3 and tried out its interface, video pass-through mode, software features and gaming capability.

The analyst said the strap of Quest 3, which uses fabric on the sides instead of the Quest 2's plastic, seemed a bit stronger. He also noted changes in the front of the device, including three vertical pill-shaped sensor areas across the front replacing the bland-looking gray face. The left and right pills each include one color video pass-through as well as a standard camera, while the middle pill includes a depth sensor — a first for a Quest — he said.

Quest 3's video pass-through performance will unlikely come close to that of the Apple device, Gurman said. However, the speed of navigating through the device's interface, launching apps and playing games appeared much improved over the Quest 2 due to the Quest 3’s second-generation version of Qualcomm Inc.'s QCOM Snapdragon XR2 chip, he added.

While it hasn't found the “killer” app for its headsets, Meta is several years ahead of Apple in terms of top-flight games built for VR, the columnist said. He expects Apple to challenge that by offering access to hundreds of thousands of iPad apps and rolling out tools that can easily convert iOS and iPadOS software into xrOS titles.

Gurman said Meta will likely price Quest 3 higher than Quest 2's $400 and potentially sell Quest 2 at a lower price. He, however, does not expect a second-generation Quest Pro anytime soon.

"Assuming the device costs about $500, it would be about a fifth as much as the Apple headset — while being more than a fifth as compelling," Gurman said.

"With that in mind, I think the Quest 3 could make some noise this holiday season, especially as XR is top of mind for consumers."

Apple closed Friday’s session at $175.43, up 1.41%, according to Benzinga Pro data.

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