2023 is the year that XR is supposed to put up or shut up, or at least that’s the general sentiment among most people both inside and outside the industry. After Meta planted the flag for the Metaverse in 2021 and then went through a financial meltdown in 2022, the company seems to be marketing its visions for the Metaverse a little bit less forcefully now. However, Meta is a company that is notorious for aggressively collecting user data and monetizing it for ads and micro-targeting.
This is no different from one of its biggest XR competitors, ByteDance, which bought headset manufacturer Pico in 2021. ByteDance is the parent company of TikTok, which has been accused of behavior similar to Meta’s, which puts consumers in a precarious place if they care about security. While Apple could potentially solve the security problem at some point, so far it hasn’t entered the fray. The latest rumor is that Apple will launch and ship its headset in the second half of 2023 rather than the first half. Meanwhile HTC is weighing in with the latest headset in its VIVE product line, the impressive VIVE XR Elite.
The VIVE XR Elite
The VIVE XR Elite is one of the most dynamic headsets I have ever seen and includes many unique capabilities. This adds to the value of the headset and helps explain why HTC is targeting enthusiasts rather than the broader market. First, the VIVE XR Elite is not only a VR headset; it is capable of both VR and MR (mixed reality), plus it has a full-color RGB camera for passthrough as well as a depth sensor. (Meta seemingly removed the depth sensor from its Quest Pro product at the last second.)
But the VIVE XR Elite isn’t just about matching its competitors on features like MR passthrough or having 2K x 2K resolution, 12GB of RAM, and pancake lenses. HTC has also focused on the headset's weight and size, with the whole headset weighing in at a meager 625g, almost 100g less than the Quest Pro, and with a hot-swappable battery to boot. But the smaller profile doesn’t make the headset suffer in performance specs: It has a 110-degree field of view (wider than the Quest Pro) and a 90 Hz refresh rate.
What makes the VIVE XR Elite even more compelling than these paper specs is that it also converts easily into a pair of VR or MR goggles simply by removing the detachable battery strap. A set of extended arms attach to the front of the headset; this considerably lowers the headset's weight, although it also loses some of the counterbalancing effect that comes from the weight of the battery. The convertible nature of the headset also brings a capability that most headsets today lack, namely portability. I have a Quest 2 and a Quest Pro, and both headsets are quite a burden to transport; meanwhile, the VIVE XR Elite is incredibly compact and easily transportable.
This mode requires the headset to be connected either to a PC for power and graphics or to a battery to operate in lightweight standalone mode. While it’s unclear exactly which modes consumers or developers will gravitate towards, I believe that this headset's flexibility and versatility will attract users in ways that HTC’s previous headsets didn’t. Speaking of HTC’s previous headsets, it’s quite clear that the HTC VIVE Flow’s design and engineering heavily influenced the Elite XR, even though it is more comparable to the VIVE Focus 3 in specs.
I believe that the VIVE XR Elite takes the best of both of its predecessor headsets and builds on their capabilities. One example is the much-appreciated screen-mirroring capability it has when connected to an Android smartphone, enabling viewing content otherwise unavailable in VR. And because this is an enthusiast-tier device, HTC will also launch optional face- and eye-trackers later this year for users who want them. This helps lower the cost of the device for most typical users, while giving power users the option to increase immersion in apps that support it. While I believe that in the long run HTC should include eye-tracking without extra cost, for now it would definitely result in an even more expensive, and therefore less accessible, headset. That said, as resolutions keep growing and the unending demand for high-fidelity content continues, eye-tracking capabilities will become a must for XR headset makers who want to squeeze the most out of their mobile chipsets.
Consumer or enterprise?
HTC says that the VIVE XR Elite is a consumer headset; if you think about it, it’s the first consumer headset from VIVE since the VIVE Cosmos, which was announced in 2019 as the company’s first-ever standalone consumer headset. The $1,099 pricetag on the VIVE XR Elite is certainly more of a prosumer price point, considering that the Quest 2 and Pico 4 sell for around $399. Yet it seems like a much better deal if you compare it with the $1,500 Quest Pro, given all its capabilities.
I believe that the VIVE XR Elite is probably the best-positioned device to compete with whatever Apple brings to market in terms of capabilities and specs. The competing devices will likely also have a lot of similar apps; the VIVE XR Elite is starting with 100 apps, many of which have already been very successful on other platforms like the Quest series. I think that right now quality is more desirable than quantity when it comes to XR apps. I expect that Apple will follow this path as well, and likely won’t launch with a massive number of apps, but rather somewhere in the ballpark of 100 well-curated app experiences.
HTC also says that the VIVE XR Elite will be available later this year for enterprise users, which again makes it unclear whether this is a consumer or an enterprise headset. Perhaps it doesn’t matter, as we’ve seen many enterprises adopt headsets like the Quest 2 for enterprise applications, even though that product is very much a consumer headset.
The VIVE XR Elite is easily one of the most advanced headsets on the market today. It has all the features you want and need in a modern XR headset, and it delivers them at a price that everyone agrees would take a lot of work to attain broad market adoption. That said, HTC is also the only company in the market today that is trying to make money mainly on the hardware itself, rather than selling the hardware below cost to gain market share and then reap the sweet 30% app store margin.
HTC has another strong point that I believe it’s not maximizing, namely its outstanding record for security. One of the biggest challenges in the enterprise XR space has always been the security and manageability of devices within enterprise environments. HTC has a long track record of supporting secure applications and meeting the defense-grade security and privacy requirements of the most demanding enterprises. I believe that this is one of HTC’s strongest suits—one that it has undermarketed over the years. If HTC wants the VIVE XR Elite to be successful with consumers and enterprises, it will need to highlight its pedigree of trust in security and privacy. Indeed, I believe that HTC should be more direct with consumers and say that, unlike its competitors, it isn’t in the business of violating users’ privacy or selling their data.
If HTC doesn’t take that path, I believe that it will be a missed opportunity for the company, and that the VIVE XR Elite won’t be as successful as it could be if the company just marketed itself better. For example, did you know that HTC still owns its factories, and that its manufacturing ability goes back to its ODM roots in the 90s? Most companies don’t manufacture their own products anymore, significantly impacting quality and security. One of the biggest questions that consumers must ask themselves is how much their privacy is worth and whether they are willing to pay a little more to have a world-class XR headset that also gives them more control over their data.
HTC truly has a winner with the VIVE XR Elite headset. The company is producing a single headset that should appeal to both consumer enthusiasts and enterprises; if users agree that it has the right features, it can help expand HTC’s place in the market and improve its margins. Leaning more heavily into the privacy and data security story with consumers can help HTC further differentiate itself from the competition, namely Meta and Pico, since we don’t yet know anything about Apple’s forthcoming XR product.
The XR market is still relatively tiny, even after all these years of iteration, but many people expect that that will change once Apple enters the market. I believe that HTC’s VIVE XR Elite is one of the genuine contenders that can compete with Apple. There seems to be a common strategy among HTC and other companies already in the market to launch products and be recognized as leaders before Apple comes in and makes what will probably be a huge impact in this market.
Meanwhile, I am here at CES 2023 and hope to get some heads-on time with the VIVE XR Elite headset; sometime soon, I will publish a review with my thoughts on the final product and how it compares to the Quest Pro and other headsets.