Alphabet Inc’s (NASDAQ:GOOGL) Google Glass augmented reality glasses went gone down in flames. However, that first public crash of the AR smart glasses concept does not appear to have scared off Apple Inc. (NASDAQ:AAPL). The company is reportedly testing its own version of the connected eyeglasses.
What do we know about the top-secret “Apple Glasses” project?
Bloomberg was the first to press with news that AAPL is moving from patent applications to prototypes with its Apple Glasses project. According to the report, the company has been in discussion with potential component suppliers.
And it seems to have gone beyond the discussion phase. According to Bloomberg’s sources, Apple has ordered a small number of near-eye displays for testing. This is the technology that’s at the heart of AR smart glasses.
AAPL’s Stealthy Approach to AR and Smart Glasses
Apple has a well-deserved reputation as a company that takes a wait-and-see approach to new technology. It studies the efforts of the early releasers, learns from their mistakes, then pounces with a version of its own that blows away the competition. It did that with the iPod, the iPhone and the iPad.
And it’s showing all signs of doing that with smart glasses.
In this case, the early releaser was Alphabet. Its venture into AR glasses had a promising start but collapsed under high prices, an elitist release approach and privacy concerns that culminated in the whole “Glassholes” issue.
Apple has been watching all this time. And CEO Tim Cook has signaled the company’s interest in augmented reality technology repeatedly. For example, in July during an AAPL earnings report, he was quoted as saying:
“AR can be really great. We have been and continue to invest a lot in this. We’re high on AR in the long run and we think there are great things for customers and a great commercial opportunity.”
MacRumors and other websites have been tracking the clues about what AAPL has been up to. There have been AR/VR acquisitions, patents and experimental Apple takes on Facebook Inc’s (NASDAQ:FB) Oculus Rift and the Microsoft Corporation (NASDAQ:MSFT) Hololens. Apple also is rumored to have built up a large team that’s focused on exploring AR and VR technology.
All of this observing and experimenting, combined with a growing consumer interest in AR, may now be culminating in Apple Glasses.
The question then becomes “When?”
Potential Timeline for Apple Glasses
Bloomberg’s report clearly states that AAPL has not ordered sufficient quantities of the needed components to actually begin mass production of Apple Glasses. Apple also declined to comment on the story, although that doesn’t mean anything — the company is notoriously secretive and never comments on speculation about future product releases.
Commercial production of any Apple smart glasses seems most likely to start in 2018. Another year or two of prototyping would offer distinct advantages.
- It gives AAPL time to deal with some of the user complaints about Google Glass, including short battery life and a bulky appearance.
- It gives the public more time to adjust to AR and VR technology.
- Mass-market release of virtual reality headsets, AR games like Pokemeon Go and new “light” versions of smart glasses like Snap Inc.’s popular new Snapchat Spectacles will help to boost demand while taking the edge off concerns like privacy.
Like the Apple Watch, Apple Glasses would provide a potential double-whammy win for AAPL.
The company would make money from selling the smart glasses themselves. But by tying them to the iPhone for doing the heavy lifting, a successful launch of Apple-branded smart glasses has the potential to result in a bump in iPhone sales as well. Naturally, third-party developers would be releasing apps to take advantage of the new hardware, and Apple gets a cut of that revenue as well.
Here’s one more factor to consider. With the iPhone 8 arriving in 2017, 2018 will be an “S” year — which traditionally sees lower demand for iPhones. AAPL will be looking for something to make a splash in 2018.
Apple Glasses could be that big new product launch.
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.
