The battle of the face computers is on

But Orion is a substantial shift toward truly wearable VR/AR tech, as BI’s Peter Kafka reported, and is what some analysts are even calling the future of smartphones — a prospect that should put the iPhone maker on notice.

“I think that Apple’s going to do the same thing,” Gene Munster, managing partner at Deepwater Asset Management, told Business Insider.

Rumblings of smart glasses have been floating around the Cupertino company for years. The Information reported in 2019 that Apple aimed to release a pair of AR glasses by 2023.

In October of last year, Bloomberg reported that Apple moved staff away from AR glasses development, which was considered too technically challenging at the time, to work on a cheaper version of Vision Pro.

The headset, which costs $3,500, has so far flopped in sales, and the lack of apps for the device hasn’t helped. Netflix co-CEO Greg Peters said earlier this year that building a dedicated app for the Vision Pro wasn’t worth company resources because of the small market for the device.

“Certainly, we’re always in discussions with Apple to try and figure that out, but right now, the device is so subscale that it’s not really particularly relevant to most of our members,” Peters said in an interview on the “Stratechery” tech podcast.

There’s also a more visible problem: The headsets, as BI’s Alistair Barr noted last year, are just really uncool. For a while, there was a glaring lack of photos of Apple CEO Tim Cook and other executives wearing the headset. Cook then posed for Vanity Fair wearing the Vision Pro.

“Vision Pro is not a mainstream product,” Munster told BI. “It’s not just because of the price. I think humans are going to resist wearing these in public. I used to think that if you have enough utility that people would just power through the social awkwardness.”

Meta’s Quest headset suffers from a similar problem. Munster said the experience of putting on a clunky headset is inherently socially isolating.

Snap, the maker of Snapchat, is getting a bit of heat for a similar cool-factor issue with its latest iteration of the Spectacles AR glasses.

The glasses are cordless and less heavy than its VR headset counterparts, but they’re downright “cartoonish,” BI’s Jordan Hart wrote. Spectacles make Meta’s Orion, which looks like glasses in a bold font, seem much more fashionable in comparison.

Munster told CNBC on Friday that, for him, the “momentum” of innovation is on Meta’s side: “Innovation wins when it comes to tech.”

In an analyst note on Thursday of last week, Band of America’s Justin Post mused whether Orion could be the “next gen smartphone.”

“In theory, the glasses will be able to provide holographic overlays, enhancing real-world experiences, while also offering all the communication and data functionality of the smartphone, without having to hold up a screen,” Post wrote.

For now, Orion remains a prototype. Andrew Bosworth, Meta’s chief technology officer, said in the “Stratechery” interview that he expects a consumer version of Orion could be released in the “next three to five years.”

Jacob Bourne, tech analyst for Emarketer, told BI that Orion signals that Meta is not giving up on its investment in VR technologies, but it didn’t necessarily put Apple in a corner. Anticipation for the Cupertino company to make a move in the VR space was already there, he said.

Emarketer is a subsidiary of Axel Springer, which also owns BI.

“I think Apple has been in the hot seat around virtual technologies for a while,” he said, later adding that the competition in the wearable tech space is “on, but it’s been on.”

In the meantime, there’s little stopping Apple from pursuing glasses, potentially creating another product that could work seamlessly with its ecosystem.

Bosworth expressed much of the same concern in the “Stratechery” interview.

“The thing I worry about with Apple specifically is that they have their phones and devices so locked down that they can self-preference a ton,” he said, pointing to Airpods as one product whose full features only work with other Apple devices.

After redirecting resources away from AR glasses development, Bloomberg’s Mark Gurman reported in June that Apple is again focusing on an augmented reality-only device.

“Zuckerberg — I think he was just probably trying to get in front of something Apple’s going to say in the next year,” Munster said.

Spokespeople for Meta and Apple did not respond to a request for comment.