Apple and Meta's 'VR War' Decided by Semiconductors

[Asia Economy Reporter Baek Jong-min] Reports continue that Apple will release a virtual reality (VR) device with augmented reality (AR) features within this year. One company is on high alert over this news: Meta. With Apple already delivering a critical blow to Meta's Facebook advertising business, it is expected that Apple will shake up the market by launching a VR device with superior performance.

Recent U.S. media reports indicate that Apple will showcase the VR device in the first quarter and release it in the fall. The prevailing expectation is that it will be announced at the Apple Worldwide Developers Conference (WWDC) held no later than June. Apple's VR device is expected to be named ‘Reality Pro’.

Apple's VR device is presumed to use its self-designed ‘M2’ chip as the application processor (AP). Using the latest high-performance chip found in iPads and MacBooks, Apple's VR device is certain to boast high performance. The price is also expected to exceed $2,000, which is expensive compared to Meta's ‘Quest Pro’ priced at $1,500.

The difference in core APs is expected to result in a significant performance gap between the two devices, according to industry observations. Meta's Quest Pro uses Qualcomm's ‘Snapdragon XR2+ Gen 1’. Meta is preparing to launch the ‘Quest Pro 2’ in the second half of the year, which will use the ‘Snapdragon XR2+ Gen 2’. The question is how much the Quest Pro 2's performance will improve. The ‘Snapdragon XR2+ Gen 2’, reportedly to be used in Quest Pro 2, is based on the ‘Snapdragon 8 Gen 1’. The performance of the ‘Snapdragon 8 Gen 1’ did not even surpass Apple’s ‘A14’ chip used in the iPhone 12 released in 2020. Apple had already outpaced competitors in the low-power system-on-chip (SoC) field with the ‘M1’, which is based on the A14. Apple's decision to use the ‘M2’ in its first VR device is nothing less than a declaration of intent to dominate the VR device market with the most powerful mobile chip currently available. The M2 is based on the ‘A15’ used in the iPhone 13 and 14. According to Apple, the M2 integrates 20 billion transistors, 25% more than the M1, and offers an 18% performance improvement.

Despite large-scale investments in the metaverse (extended virtual world), Meta is experiencing serious losses. The industry is paying attention to Apple's moves targeting Meta. The success of Apple's VR could be a disaster for Mark Zuckerberg, Meta's founder. Apple's approach to VR also differs from Meta's. While Meta has focused on VR, many analyses suggest that Apple is likely to encompass augmented reality (AR) as well.

Most VR devices currently on the market are bulky and consume a lot of power, offering few advantages to attract consumers. For Apple to open the VR device market, it must present a new experience that completely surpasses competing products, as it did with the iPhone, iPad, and Apple Watch. Apple is expected to leverage its powerful chip performance to support interoperability between the iPhone, iPad, and VR devices. Apple even developed the AP, the heart of the VR device, in-house, whereas Meta has not. Despite having strong platforms like Facebook and Instagram, Meta has no hardware devices to boast of other than VR devices.

Apple-specialized media AppleInsider predicted, "If Apple releases a device that combines virtual reality and augmented reality, Meta's leadership in the VR market could collapse instantly." AppleInsider also pointed out that Meta's reliance on third-party APs, the heart of VR devices, is a weakness.

Of course, it will not be easy for Apple to achieve immediate great success in the VR device market. Google and Microsoft have already tasted failure with AR glasses. It is also questionable whether consumers will pay more for VR devices than for iPhones or iPads. No matter how excellent the core chip is, without a ‘killer app’, Apple could also fail.

◇Terminology explanation: Augmented reality (AR) refers to technology that adds computer-generated information to the real-world view seen by the user. Virtual reality (VR) differs from AR in that it is a virtual artificial environment similar to reality.