/Apples next 5 years: VR headsets, an Apple Car, and a foldable iPhone

Apples next 5 years: VR headsets, an Apple Car, and a foldable iPhone

  • Apple is said to be developing a VR headset, a self-driving car, and a foldable iPhone.
  • It’s reportedly experimenting with these technologies as it undergoes a change in leadership.
  • Success will depend on whether Apple gets the timing right and can markedly push the tech forward.
  • Visit the Business section of Insider for more stories.

Apple made it through the pandemic with more acclaim than bruises: Its highly anticipated 5G iPhone was a hit, it earned rave reviews for the first MacBooks powered by its own chips, and it became the first American company to be worth $2 trillion.

All that came even as Apple’s retail stores around the world were forced to shut down temporarily because of the coronavirus.

But there’s no time for celebration in Cupertino, California. Apple investors and customers are already anxiously wondering what’s next, especially as the market for smartphones, which provide the bulk of Apple’s revenue, has slowed in recent years, even before the pandemic.

CEO Tim Cook has proved his chops as an innovator since taking the reins from Steve Jobs nearly a decade ago, with the successful expansion into wearable products such as the Apple Watch and the AirPods. And Cook has positioned Apple to be a player in the fast-growing market for digital services like streaming video and music.  

Now it’s time to look ahead to what the next five to 10 years under Cook will look like. With a lineup of veteran executives shuffled into in place in key roles, Apple is embarking on the next phase of its evolution by tackling an ever more challenging category of products — some of which are far removed from Apple’s comfort zone. There’s a pair of smart glasses and a foldable phone in the works, according to various media reports. And, of course, there’s the autonomous electric car that Apple is said to be working on, which would mark the most dramatic business bet in the company’s history.

Insider spoke with a variety of experts, including analysts, a high-profile tech designer, and former Apple employees, to gain a better understanding of Apple’s future at this crucial moment. More important than the design direction and engineering, some experts say, is whether Apple can pull off what it’s done with previous smash hits like the iPhone: launch these new gadgets at the perfect time and make the strongest case yet for their place in our lives. 

Apple’s next possible computing device

For years, reports and rumors have indicated that Apple is exploring virtual- and augmented-reality headsets. Those whispers grew even louder in January when Bloomberg’s Mark Gurman reported that Apple planned to develop a virtual-reality headset that would serve as a precursor to a pair of more sophisticated AR glasses.

In a departure from Apple’s typical approach, the headset in development would be more geared toward developers than mainstream audiences, according to Bloomberg. This early headset would likely be an effort to encourage developers to build compelling new apps that illustrate the potential of AR and VR technology before the company released a more refined wearable product down the road. 

It’s an unusual step for Apple but an important one that will determine whether Apple’s headset is a hit or a dud. And it’s a challenge that rival tech giants like Facebook, Microsoft, and Sony have struggled to conquer.

The global market for AR and VR devices declined for the fifth consecutive quarter in the third quarter of 2020, dropping to 569,000 shipments, according to the International Data Corp. But that was largely because Sony and Oculus were in the middle of a transition to next-generation products. Still, that number pales in comparison to smartphone shipments, which reached 354.7 million units in the same time period, according to IDC.  

Apple iPhone Airpod



Apple


The Information reported in February that the headset would be packed with high-tech sensors and displays, including more than a dozen cameras for tracking hand movements, 8K displays, and support for eye tracking.

Apple’s leap into augmented and virtual reality will likely be similar to its expansion into other wearables designed for the wrist (Apple Watch) and the ears (AirPods), said Neil Cybart, the founder of the well-regarded Apple analysis blog Above Avalon who previously served as an analyst for the investment-banking firm Keefe, Bruyette & Woods.

“Apple traditionally does not like to come up with replacements for existing devices,” Cybart said to Insider. “Instead they come up with alternatives, and that means they handle some of the roles, some of the tasks, that an existing Apple product can handle.”

This strategy has paid off for Apple so far. The Apple Watch and AirPods, two wearables that are essentially designed to assume some of the iPhone’s roles in a more portable way, have led the tech giant to become the worldwide market leader in wearables despite entering the market late compared with rivals.

Apple’s new generation of design leadership

Apple’s push into new areas like augmented reality would come as the company’s acclaimed industrial-design studio is under fresh leadership. 

Apple’s iconic designer Jony Ive spent nearly 30 years at Apple shaping its most formative products, from the iMac to the iPhone, Apple Watch, and even the company’s Apple Park campus. He was also the most recognizable face behind Apple’s products. Though he rarely appeared onstage at major keynotes, anyone who has followed Apple’s product launches in recent years has heard him narrate Apple’s marketing videos for new products.

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Former Apple design chief Jony Ive and Apple CEO Tim Cook.

Justin Sullivan/Getty Images


But Ive departed Apple in 2019 to start his own design firm, LoveFrom, which will count Apple as one of its clients. That means Apple’s most famous designer is no longer part of the company in an official capacity as it navigates new computing categories like VR, AR, and foldable phones.

Two longtime Apple designers are now overseeing the product-design process in his stead: Evans Hankey, the vice president of industrial design, and Alan Dye, the vice president of human interface design, both of whom will report to Jeff Williams, Apple’s chief operating officer.

Dye has been involved in Apple’s design leadership for years. Around 2015, after the Apple Watch’s launch, Dye was tapped to lead the day-to-day operations of Apple’s design team alongside another design veteran, Richard Howarth, after Ive was promoted to chief design officer, according to Bloomberg.

Hankey has been at Apple for more than a decade and served as Ive’s top lieutenant during his time at the company, according to The Wall Street Journal, and holds many product-design patents.  

But she has largely stayed away from the spotlight. She has rarely given media interviews, while Dye has spoken publicly about products like the Apple Watch and Apple’s Mac software on numerous occasions in recent years. She never appears onstage during Apple’s product keynotes and is not featured in its marketing videos, unlike Dye, who appeared in Apple’s Worldwide Developer Conference keynote in 2020.

May-Li Khoe, who spent more than seven years at Apple before leaving in 2014, according to her LinkedIn page, said on Twitter that Hankey had been “making s— run”  for a long time.

“When we worked with the ID team, it felt to me like Evans made s— go and everyone knew it,” she also wrote in the Twitter thread, which was posted in response to a story about Ive’s departure. “To be frank, I found her pretty inspiring.”

The strong vision that Apple’s tight-knit industrial-design team is known for also stems from a culture that was probably set by Hankey, a former Apple employee familiar with the product-development process said to Insider. Another ex-Apple employee described Hankey as being narrowly focused on her work.

Ive’s move isn’t the only shake-up in Apple’s design team in recent memory. In 2019, four senior members of Apple’s design team — Rico Zorkendorfer, Miklu Silvanto, Julian Honig, and Daniele De Iuliis — also departed.

But Ive’s exit, and the departure of other longtime Apple designers, doesn’t mean trouble for Apple’s upcoming product ambitions. Ive had taken a step back from Apple’s daily responsibilities long before he officially left, according to Bloomberg, meaning figures like Hankey and Dye have probably been running the design operations for years.

The recent resignations also mean that Apple has the opportunity to recruit more fresh talent, perhaps designers that grew up in the iPhone era, to help define what might come next, Cybart said. 

What’s next for the iPhone

Apple has also been experimenting with another emerging technology that major rivals have explored but failed to popularize so far: foldable smartphones. Bloomberg reported in January that Apple had developed a prototype of a foldable smartphone — an area that its biggest competitor, Samsung, has highlighted as being key to its mobile-product strategy.

But like VR and AR, foldable phones have seen limited reception, perhaps mostly because of their significantly higher prices compared with those of regular smartphones. The market-research firm Gartner predicted that foldable phones would account for less than 5% of high-end phones by 2023, and Strategy Analytics said that foldable-phone shipments would hit just 100 million by 2025. 

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Samsung’s Galaxy Fold smartphone.

Lisa Eadicicco/Business Insider


But that doesn’t mean tech giants like Apple should write off foldable phones just yet. After all, flip phones like the Motorola Razr became undeniably popular despite the fact that older candy-bar-shaped phones were more pocketable, efficient, and durable at the time, Horace Dediu, the founder and analyst at Asymco who also spent more than eight years at Nokia in the early 2000s, told Insider.

Still, Apple does have a knack for miniaturizing new technologies and developing interfaces that work well on new types of computing devices, much like the iPod’s click wheel, Patrick Moorhead, the founder and principal analyst at Moor Insights & Strategy, said. That could give it an edge in foldable phones and the development of AR headsets. 

Whether it’s a VR headset, a foldable iPhone, or an Apple-designed car, success will hinge on two key factors. First, Apple will have to nail the timing by entering these markets when these devices are starting to be embraced more widely, but before another rival swoops in and establishes itself as the leader. 

Apple has done this successfully with the iPhone, iPod, iPad, and Apple Watch but missed the boat when it came to smart speakers. Though Apple sells the Siri-enabled HomePod and HomePod Mini, it’s Amazon’s Echo that largely dominates the market and is synonymous with smart-home tech and virtual assistants. 

Samsung also threatened to outshine Apple in the 2013 to 2014 time frame as the smartphone market began to shift toward larger, cheaper smartphones — two qualities Android device makers embraced long before Apple. 

At the same time, rivals have also invested more heavily in design. 

That’s according to Gadi Amit, the president and principal designer at NewDealDesign, a design firm that counts Fitbit, Google,

Postmates
, Verizon, and many others among the companies it’s worked with.

“There are challenges to Apple’s dominance in industrial design,” Amit told Insider. “You cannot dismiss the progress that Samsung, Google, and Microsoft have done.”

But more than anything else, Apple’s success in new territories like foldable phones will come from the company’s ability to stick to its mantra of only launching new products when they can move the needle in a significant way. And that comes from how Apple’s design and product-development organizations function as a team, not as individuals.

“It’s a system — not just the people involved but the way they work together that really makes things work,” Dediu said, adding that Ive or “anyone else taken out of Apple wouldn’t be able to achieve close to what Apple is able to achieve as a team.”

Are you an Apple employee with insight to share? Contact this reporter at leadicicco@businessinsider.com. Please use a nonwork device when reaching out.

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