Cameron Wong

Sep 2nd, 2022

When Will VR and AR Have Their "iPhone Moment"?

Virtual Reality and Augmented Reality are developing rapidly. VR headset sales are  firmly on the rise; most smartphones come standard equipped with AR functionality; and leading social platforms are actively integrating AR content. Despite this, we have yet to see the game-changing consumer-grade immersive technology device that could transform our daily lives. Major tech companies like Apple, Google, and Meta are racing to break into the mainstream market with a transformative immersive tech product for the average consumer.

Recently, The Verge reported on Meta's long-term plans for Augmented Reality. People involved with AR development at Meta – who, it's worth noting, were not authorized to speak publicly – outlined Meta's decade-long roadmap to break into the mainstream market with consumer-grade AR devices. The tentpole project is a pair of AR glasses dubbed " Project Nazare," allowing users to interact with information projected on real objects and remotely communicate in real-time with other 3D avatars. According to employees, Zuckerberg intends for Project Nazare to spark an "iPhone moment" – a paradigm-shifting mass adoption of new technology – for VR and AR devices.

So what will it take for VR and AR to have their iPhone moment? Key players such as Meta, Apple, and Google are betting that consumer-grade wearable AR technology such as Meta’s Project Nazare is the key to mass adoption. Wearable devices like smartwatches are already rapidly growing in popularity, as are immersive tech devices such as VR headsets. A marriage between the two could spark a wave of adoption among consumers that fundamentally reshapes our relationship with technology. But concerns over costly components, and subsequent retail prices that outrange what most consumers are willing to pay, brings this bet on wearable AR tech into question. Regardless, VR and AR’s iPhone moment hinges first and foremost on product affordability and easing the adoption process for consumers. 

The phrase "iPhone moment" has become a shorthand for a revolutionary product that reshapes an entire industry. The term has been used to describe watershed moments for the  automotive industry,  photography, and even  space exploration. The current vision for VR and AR’s iPhone moment, however, shares more in common with the actual debut of the iPhone than most other analogues. Wearable AR technology would not only redefine the VR and AR industry but change the daily lives of consumers much as the iPhone did. For that, it's worth examining how the iPhone itself achieved mass adoption back in the late 2000s.

Prior to the iPhone's release in 2007, mobile device manufacturers marketed their products toward several divided markets. PDAs and Blackberries targeted businesses and working professionals, offering extra functions appealing to that demographic like calendar management and notetaking. Mobile flip phones were limited to conducting calls, texts, and heavily pixelated Solitaire, presented as a necessary, if unambitious, daily tool for the non-specialist. iPods were framed as recreational devices for music playback and early-stage mobile gaming, and the different models of iPods were themselves marketed toward different consumers. The iPhone was revolutionary because it united all of these features under one banner, folding several separate markets into what is now the smartphone market. 

This is part of what the leading players in tech are aiming to accomplish with wearable AR tech. Currently, the markets for smart devices and wearables are as divided as mobile devices once were: VR headsets, AR mobile apps, and smartwatches all cater to separate crowds by offering different functions. VR headsets offer full-scale immersion; AR mobile apps are an easy point of entry; and the health and wellness functions of a smartwatch appeal even to those who've never heard the term "AR." Wearable AR tech like Project Nazare would offer some of the immersion of a VR headset, the ease and accessibility of AR, and the personal functionality of a smartwatch. Much like the iPhone, consumer-grade wearable AR tech aims to unify several discrete markets into one.

If a device becomes as overwhelmingly popular as the iPhone did, it puts the company in a powerful position. Apple was able to set the terms for its competitors, forcing them to follow Apple's design choices. By getting to the wearable AR market first, companies like Meta, Apple, and Google aim to reach that same industry-defining position.

Unfortunately, devices like Project Nazare are still years from the market. But more importantly, are people ready to incorporate wearable AR devices into their daily lives? While it's impossible to predict how any new technology will be received, clearly we can learn a lot by studying past groundbreaking technologies like the iPhone. 

By creating a product that appealed to several then-separate markets, the iPhone enjoyed such popular appeal that it brought the entire mobile device market to heel. That popularity was predicated on affordability and marketing the product as a necessity-good, as well as less-tangible cultural factors unique to the late 2000s. With the latter point in mind, the iPhone analogy only takes us so far in imagining VR and AR’s eventual moments of mass adoption.

To deepen our understanding of VR and AR’s iPhone moment, we can also consult tried-and-true frameworks for the mass adoption of new technologies. The  technology adoption lifecycle is a model outlining how various consumers react to new technologies. The system divides consumers into five categories: innovators, early adopters, early majority, late majority, and laggards.

For wearable AR devices to take hold, first the innovators and early adopters need to demonstrate the technology’s usefulness. This is relatively simple, as the people in those demographics are already predisposed toward trying new, high-tech products. These two groups comprise an entirely separate market from average consumers, denoted above as the "Early Market." The Early Mrket requires a different (and typically less strenuous) marketing approach than the Mainstream Market.

The Mainstream Market is the crown jewel which leading companies in the space are after. But entering the Mainstream Market means  Crossing the Chasm, a term coined by Geoffrey Moore describing the crucial make-or-break point for all emerging technologies. New high-tech products either carry the momentum from the Early Market and successfully break into the Mainstream Market, or run out of steam and remain a product for specialists. The Mainstream Market is the final gateway to mass adoption and tech leaders are already setting the table accordingly. 

Although we’re still a ways from mass-produced consumer-grade AR hardware, leading tech companies are already creating the conditions to encourage mass adoption. Meta in particular has poured a good deal of resources into publicizing VR, AR, and the metaverse in order to familiarize the public and warm the reception of consumer-grade devices down the line. Familiarizing the market with the products can only go so far though, especially if the products are prohibitively expensive. The bottom line is, well, the bottom line: at the end of the day, the mass market won't adopt a product if it's not affordable enough. This is where tech manufacturers may face the most trouble, as lightweight parts for VR and AR devices are still staggeringly expensive. The components for Project Nazare, for example, currently amount to thousands of dollars per device. 

Subsidizing the cost of devices – perhaps even selling them at a loss – is a viable, if risky, option to actively encourage mass adoption. This move also comes straight out of the Apple playbook: two months after the iPhone debuted, Apple lowered the sale price from $599 to $399. Early adopters who purchased the phone at $599 were understandably miffed, but Apple recognized that mass adoption is ultimately more valuable than short-term sales figures. As a recompense, Apple offered early adopters store credit "as we aggressively go after new [customers] with a lower price." Stepping-stone precursors and aggressive affordability are marketing tactics modeled after Apple's success with the iPhone, but ultimately the leaders in immersive technology will need to forge their own path toward the mass adoption of wearable AR technology.