Why Apple Inc. Bought AR Headset Startup Vrvana

Augmented reality could have a huge upside for AAPL stock, and this acquisition is a step closer to an Apple AR headset

Apple Inc. (NASDAQ:AAPL) is betting big on augmented reality. CEO Tim Cook argues it has the same game-changing potential as the iPhone introduction a decade ago — think about that implication for AAPL stock.

Why Apple Inc. Bought AR Headset Startup Vrvana
Source: VRvana

The company recently released ARkit for iOS 11 and there have been persistent rumors it is working on its own Apple AR headset.

Yesterday, it was reported that the latest Apple acquisition is Vrvana, a Canadian startup known for its Totem “seamless blend” AR/VR headset.

It definitely feels as though Apple is moving the pieces into place to make a big augmented reality play

Report: Apple Acquisition of Vrvana

TechCrunch reported yesterday that Apple bought Montreal-based startup Vrvana.

According to TechCrunch’s sources, this latest Apple acquisition was worth roughly $30 million. Apple has refused to confirm the deal, but the report says Vrvana –which was founded in 2005– stopped updating its social media accounts in August.

In addition, at least some Vrvana employees have now joined Apple in California.

Vrvana Totem Headset

According to its website, Vrvana has been focused on the Totem. This technologically advanced headset has won accolades (note the CES 2017 award badge in the product image) for “seamlessly blending” AR and VR, while virtually eliminating camera lag.

That is important because lag or latency throws off the wearer’s perception of immersion and can also contribute to motion sickness.

There are other players in this space, notably Microsoft Corporation’s (NASDAQ:MSFT) HoloLens. However, Vrvana’s Totem uses “inside out” tracking with cameras to track the wearer’s position and infrared sensors to track their hand positions to reduce the delay to only 3ms.

In comparison, Facebook Inc’s (NASDAQ:FB) Oculus Rift VR headset targets 20ms latency.

Building an Apple AR Headset

Rumors have been flying for some time that an Apple AR headset is in the works. At CES 2017, Apple Glasses made in partnership with Carl Zeiss AG seemed like a possibility.

In June, Apple bought SMI, a company working on eye tracking for AR and VR. That month the company also announced ARKit, its platform for bringing augmented reality to iOS. And in doing so, there was an apparent step back. Augmented reality was still the next big thing, but it was going to be focused on the iPhone, not an Apple AR headset.

Tim Cook spoke to The Independent in October, dismissing AR headsets:

“But today I can tell you the technology itself doesn’t exist to do that in a quality way. The display technology required, as well as putting enough stuff around your face — there’s huge challenges with that.The field of view, the quality of the display itself, it’s not there yet.”

Could that have been misdirection? Just weeks later, rumors picked up about a standalone Apple AR headset that would ship in 2020 and run its own version of iOS called rOS.

Putting the pieces together, Vrvana’s Totem could be the basis for that Apple AR headset, or it could at least be providing technology that builds on Apple’s efforts to date.

Implication of an Apple AR Headset for AAPL Stock?

Recent dismissal of head-mounted hardware aside, Tim Cook has been talking up AR for several years now. In one interview he gave earlier this year, Cook said:

“I regard [augmented reality] as a big idea like the smartphone. The smartphone is for everyone, we don’t have to think the iPhone is about a certain demographic, or country or vertical market: it’s for everyone. I think AR is that big, it’s huge.”

In the decade since the iPhone was released, AAPL stock has grown 885% in value. If Cook is even halfway correct about augmented reality, an Apple AR headset has huge upside for AAPL investors.

The Apple acquisition of Vrvana puts the company a big step closer to being on track to lead the AR revolution.

As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.

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Article printed from InvestorPlace Media, https://investorplace.com/2017/11/apple-inc-aapl-reportedly-bought-ar-headset-startup-vrvana/.

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