Apple’s VR headset won’t save the company from its iPhone dependence

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Wednesday, Jan. 11, 2023

Apple's mixed-reality headset won't replace your iPhone

Apple (AAPL) is expected to unveil its first mix-reality headset. According to Bloomberg’s Mark Gurman, the Cupertino-based company will unveil the highly anticipated hardware, dubbed the Reality Pro, ahead of its Worldwide Developers Conference event in June, before launching it later this fall.

For years, Apple has been searching for a new product to offset its reliance on iPhone sales, which make up the bulk of its revenue. It’s introduced subscription services like Apple TV+, Apple Music, and Apple Fitness+ and debuted accessories like the AirPods and Apple Watch. But those are more or less add-ons for iPhone owners.

The Reality Pro headset, on the other hand, is a self-contained device that will launch the company into a completely new computing space — and put it into direct competition with the likes of Meta (META). The headset is expected to be one of the most advanced on the market and come complete with high-resolution displays, external cameras for augmented reality capabilities, and run on Apple’s own M2 processor.

But don’t expect the Reality Pro to save Apple from its iPhone dependence anytime soon.

“It's a meaningless product,” UBS Analyst David Vogt told Yahoo Finance. “It's a very high-end device. We're talking like $1,500, $2,000, if not more. So that's a very limited audience. And it's mostly going to be, we think, industrial-centric to start. So, the volumes we think are going to be relatively low.”

In other words, Apple’s iPhone will still be its most important product regardless of what form of reality you’re in.

Apple’s iPhone is as important as ever

In 2022, the iPhone accounted for $205.4 billion of the company’s $394.3 billion in total sales. Services, Apple’s second largest business segment, made up just $78.1 billion of the company’s total 2022 revenue. Heck, the Wearables, Mac, and iPad businesses combined made up less revenue than the iPhone—$110.7 billion.