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Apple’s Secretive AR and VR Headset Plans Altered by Internal Differences

Bloomberg logo Bloomberg 6/19/2020 Mark Gurman

(Bloomberg Businessweek) -- In late 2018, Apple Inc. was a few years into its plan to build a powerful headset with both virtual- and augmented-reality capabilities when things shifted dramatically. Jony Ive, then the company’s design chief, objected to some fundamental aspects of the product and urged Apple to change course.

The headset was to be the first major launch from the company since the Apple Watch and the debut device from the Technology Development Group, a secretive unit devoted to VR and AR. The TDG is led by an equally under-the-radar executive, Mike Rockwell. After stints at Dolby Laboratories Inc. and media-editing software company Avid Technology Inc., Rockwell, 53, was hired in 2015 by Dan Riccio, Apple’s top hardware executive. At first his role was loosely defined, according to interviews with current and former employees who asked not to be identified discussing internal matters. Representatives for Apple and Ive declined to comment, and the company didn’t make Rockwell available for an interview.

He started building his team in late 2015, and what grew into a 1,000-strong group of engineers went to work developing two products aimed at upending the VR and AR segments. A device code-named N301 would take the best of both VR and AR—the first an all-encompassing digital experience for gaming and consuming content, and the second a tool for overlaying information such as text messages and maps in front of a viewer. The other device, N421, a lightweight pair of glasses using AR only, is more complex.

N301 was initially designed to be an ultra-powerful system, with graphics and processing speeds previously unheard of for a wearable product. The processing capabilities were so advanced—and produced so much heat—that the technology couldn’t be crammed into a sleek headset. Instead, Rockwell’s team planned to sell a stationary hub, which in prototype form resembled a small Mac, that would connect to the headset with a wireless signal. In Rockwell’s early version, the headset would also be able to operate in a less-powerful independent mode.

Ive balked at the prospect of selling a headset that would require a separate, stationary device for full functionality. He encouraged Rockwell and his team to redevelop N301 around the less powerful technology that could be embedded entirely in the device. Rockwell pushed back, arguing that a wireless hub would enable performance so superior that it would blow anything else on the market out of the water. The standoff lasted for months.

a screenshot of a cell phone: Apple AR/VR Acquisitions © Bloomberg Apple AR/VR Acquisitions

Rockwell is highly respected at Apple, with a reputation for being sharp, smart, and effective. He has the support of Craig Federighi’s software-development group and Johny Srouji’s chip-development unit, among others. The stakes are high—Apple spends more than $15 billion a year on research and development—and this isn’t the first time it’s redirected huge resources to an ambitious, potentially risky project.

Just months before Rockwell joined, the company set out to build an electric car to rival those of Tesla Inc. Apple hired several hundred engineers and reassigned even more internal staff. But by the end of 2016, it had started laying off people, largely abandoning development of a full vehicle in favor of underlying self-driving technology. Inside the company, the project was deemed a disaster.

Rockwell’s team is still in good standing, and, while it collaborates with the rest of Apple, insiders see it as enjoying an unusual degree of independence. Based mostly in a Sunnyvale, Calif., office park about a 15-minute drive from headquarters, the TDG has its own hardware, software, operations, and content groups—staffed by some of the company’s hottest talent.

As for the impasse between Rockwell and Ive, Chief Executive Officer Tim Cook ultimately sided with the design chief. Although the headset now in development is less technologically ambitious than originally intended, it’s pretty advanced. It’s designed to feature ultra-high-resolution screens that will make it almost impossible for a user to differentiate the virtual world from the real one. A cinematic speaker system will make the experience even more realistic, people who have used prototypes say. (The technology in the hub didn’t go entirely to waste: Some is being recycled to build the powerful processors Apple plans to announce next week for its Macs, replacing components made by Intel Corp.)

Still, dispensing with the hub means graphics won’t be as good as they might have been, and the download speeds could be slower. It will also probably make the experience less lifelike than originally hoped. For Ive, who left last year after almost three decades at the company, a more realistic experience was potentially problematic: He didn’t want Apple promoting technology that would take people out of the real world. According to people familiar with the matter, he preferred the concept of the N421 glasses, which would keep users grounded in reality while beaming maps and messages into their field of vision.

Prototypes of N301 look like a smaller Oculus Quest, Facebook Inc.’s VR headset, with a mostly fabric body but less plastic than the Quest . Apple’s engineering teams are still testing the device on different head shapes to find the ideal fit. The company hasn’t settled on pricing. By way of comparison, the Oculus Quest retails for $399, and Microsoft Corp.’s enterprise-focused Hololens 2 mixed-reality headset and Magic Leap AR goggles sell for $3,500 and $2,295, respectively.

N301 would have its own App Store, with a focus on gaming, and the ability to stream video content, while also serving as a sort of super-high-tech communications device for virtual meetings. Siri, Apple’s voice assistant, will control both the headset and the eventual glasses, though the headset is also being tested with a physical remote. Apple has reassigned some engineers who were working on Siri’s interface to Rockwell’s team.

a screenshot of a cell phone: Rockwell’s AR/VR Executives © Bloomberg Rockwell’s AR/VR Executives

The division has recently lost a few key players. Peter Meier, who joined Apple in 2015 from German AR startup Metaio GmbH, left last year. Former DreamWorks Animation LLC executive Ian Richter switched to another area of Apple in October after almost two years on the job. And Cody White, who helped develop Apple’s RealityKit software, which allows developers to implement 3D rendering in augmented-reality apps for the iPhone and iPad, quit in December.

Rockwell, whose team also contributes to the kit, continues to push forward. Apple is slated to announce new tools for iPhone AR apps at its annual developer conference this month. The actual hardware will take longer. Although plans could change, in an all-hands meeting last fall, Rockwell said the first headset may be announced next year and released in 2022. Apple fans can expect the AR glasses by 2023 at the earliest.


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