NORTHAMPTON, MA / ACCESSWIRE / January 25, 2023 / Qualcomm

Originally published by Ericsson

As someone who was born and raised in Manila, I still sometimes get surprised that it's a place of striking contrasts: high-rise, high-tech skyscrapers built right next to lower-income communities; the sprawling campuses of international schools that sit within a stone's throw of more humble public schools.

At Ericsson, we see the same contrast when it comes to access to digital connectivity, tools, and skills. It is easy to assume that most people have internet access. But the reality is that, according to the ITU's latest State of Broadband report, an estimated 2.7 billion of us do not have access to that connectivity.

We kept this in mind when we were thinking about creating a virtual reality-based teacher training project for selected public-school teachers in Manila, as well as for teachers-in-training who are studying at the Philippine Normal University.

A part of Ericsson's Connect To Learn initiative, the upskilling of teachers using VR is carried out alongside collaborators Qualcomm® Wireless Reach™ and Smart Communications Inc. (Smart), as well as the Philippine Normal University and Muntinlupa Department of Education.

Continue studying here.

View additional multimedia and more ESG storytelling from Qualcomm on 3blmedia.com.

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SOURCE: Qualcomm

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https://www.accesswire.com/736761/How-Virtual-Reality-for-Teachers-Can-Improve-Quality-of-Education

The researchers explored if exposure to a weakened threat to the relationship, in the form of flirting with a virtual character, would help immunize people against real-world temptations that could threaten the security of their romantic relationship in three trials. In this context, it is predicted that exposure to a weaker threat will make people conscious of their commitments to their existing partners and prepare them to deal with a more significant threat to their relationship. As a result, the researchers expected that exposure to a seductive virtual avatar would raise people's drive to safeguard their current connection, resulting in increased desire for their current partner and perception of alternative partners as less sexually appealing.

In a January 20th article, I argued that "Disinflation and Falling Interest Rates Should Drive Strong Performance" of net lease REITs in 2023.

Net leases typically feature long terms of 10-20 years, and rent is contractually fixed either at a flat rate or a low average annual rate of 1-2%. That makes each individual net lease akin to a corporate bond proxy (although net lease REITs themselves do not really behave like bond proxies).

Thus, during periods of disinflation and falling interest rates, net lease REITs benefit in at least three ways:

1. The real (inflation-adjusted) value of their rental revenue streams rises.
2. Their cost of debt falls.
3. Cap rates stabilize or decline, lifting property values and thus the REITs' net asset values.

"But wait," you might object. "What about the reason for falling interest rates? Won't a recession hurt commercial real estate?"

It's true, recessions do cause some damage to commercial real estate - but not all CRE sectors or property types equally. Some types of CRE are quite economically sensitive, while others are quite resilient in the face of recessions.

That's where Agree Realty Corporation (NYSE:ADC) comes in.

It is a retail-focused single-tenant net lease REIT that concentrates its portfolio in the 20-30 largest and strongest retailers in the nation, with a little over 2/3rds of its tenant base investment grade-rated. These are some of the fastest-growing and most well-financed companies in the US, making them not only highly likely to keep paying rent through a recession but also able to keep investing in their own competitive advantages in the age of e-commerce and omnichannel.

Disinflation + falling interest rates + recession = the perfect macro setup for ADC to outperform.

Now, if the stock market endures a broad-based selloff sometime this year, ADC's stock price will likely feel some pain along with it. But ADC is likely to fare far better in terms of both stock price and underlying fundamentals. On top of that, ADC's peer-leading cost of capital will allow it to raise attractively priced capital in order to take advantage of any disruption in the markets, exactly as it did at the beginning of the COVID-19 pandemic.

Let's first dive in to the portfolio and balance sheet of this high-quality, monthly-dividend-paying mid-cap REIT, and then we'll look at past performance to look for hints about future performance.

Recession-Resilient Portfolio & Balance Sheet

If a picture is worth 1,000 words, how about a baker's dozen pictures? This is a snapshot of the kind of properties that populate ADC's portfolio:

ADC likes boxes. Sometimes they are big boxes occupied by the likes of Walmart (WMT), Target (TGT), or Costco (COST), and sometimes they are small boxes occupied by names like Wawa, Trader Joe's, McDonald's (MCD), or AutoZone (AZO).

In any case, ADC targets highly fungible boxes that can be swapped out fairly easily with other tenants, in the rare case of a vacancy.

But vacancies truly are rare for ADC, because the REIT also targets properties with low rents per square foot relative to their tenant industry and property type. (A Chick-fil-A is going to have higher rent per square foot than a Walmart, because its tenant sales PSF is likewise higher.) Below-market rents per square foot are a strong encouragement for tenants not to leave that location.

ADC's 1,839-property portfolio is absolutely stacked with these high-quality tenants in highly fungible buildings.

To be fair, there is some measure of real estate risk in some of these tenants/properties. For example, Tractor Supply (TSCO) and Dollar General (DG) stores may be quite fungible buildings, capable of supporting other tenants, but they are also typically located in rural or small town areas. If the tenant ever left that building and handed the keys back to ADC, finding a new tenant to replace them would be extremely difficult - probably even at very low rent rates.

Luckily, I believe the risk of ADC losing tenants at these locations is very low. After all, TSCO and DG are both opening new stores and rarely ever permanently shutter their locations. Moreover, with low rents per square foot, the idea of TSCO or DG just building new stores (at today's construction costs!) a mile down the road is not very enticing.

In addition to ~68% of tenants being investment grade-rated, another 16% are not rated, but most of those tenants (like Hobby Lobby, Ulta Beauty, Publix, and Gerber Collision) have investment grade profiles.

But it would be shortsighted to focus on investment grade credit ratings alone. After all, a company can always be downgraded.

I do not believe ADC blindly chases investment grade tenants simply to boast about their high portfolio IG percentage. Rather, I think a high IG percentage is simply a by-product of ADC's focus on the largest and strongest retailers in the nation. These businesses are the best prepared to thrive in an age of ever-increasing online competition.

ADC has put a lot of thought into not just what retail is or was in the past, but also what retail is becoming over time. We live in an increasingly omnichannel world in which customers expect to have multiple ways to buy and receive goods. Customer convenience is paramount to maintain a competitive edge.

So, ADC has a thoughtfully curated and high-quality portfolio. But even very strong assets can be ruined by a weak balance sheet.

Fortunately, ADC matches its high-quality portfolio with a high-quality balance sheet.

The REIT's net debt to EBITDA of 4.0x is (I believe) the lowest of all net lease REITs, and its ~8-year average debt maturity locks in its low interest rates for a long time. Only $109 million (5.2%) of its $2.1 billion in debt matures anytime in the next five years.

Where will interest rates be in five years? Who knows. But it is a comfort to know that ADC has very little refinancing to do between now and then.

This strong balance sheet goes a long way in awarding ADC with a low overall cost of capital, both on the debt and equity side. That low cost of capital is a huge benefit to a net lease REIT, because the primary channel of growth for its business model is acquisitions.

ADC has been taking advantage of its low cost of capital to ramp up investment/acquisition volume:

Moreover, ADC was able to significantly increase its number of development and partner capital solutions ("PCS") projects last year. These are a nice way to bump up acquisition yields, as ADC takes very little risk on the construction side but eventually earns a higher stabilized cap rate because of the additional time involved in developing new properties.

This formula of strong portfolio + strong balance sheet + strong cost of capital has resulted in high single-digit average annual growth in AFFO per share as well as a 6% CAGR in the dividend over the last decade. And ADC isn't slowing down. From 2021 to 2022, the dividend increased 8.1%.

The Story of ADC In 4 Charts

As discussed above, ADC's Achilles Heel is a macro environment characterized by rising inflation and interest rates. Why? Because:

• Inflation is reducing the real (inflation-adjusted) value of its contractually fixed revenue streams.
• Higher interest rates will eventually cause interest expenses to rise.
• Cap rates are slow to respond to higher interest rates, causing the spread between cost of capital and acquisition yields to shrink.

ADC thrives most during periods of relatively low inflation and interest rates. That is exactly what we saw during the decade from 2011 to early 2020, a period of generally low rates and inflation:

Then, starting around the late summer of 2021, inflation began to spike, causing long-term interest rates to follow it higher, and ADC began severely underperforming the broader real estate index (VNQ) and the S&P 500 (SPY):

But sometime in the second quarter of 2022, signs began to appear that inflation was peaking. For example, the housing market peaked in May 2022. At that point, even as interest rates surged higher, ADC began to outperform the VNQ and SPY.

And now, one month into 2023, investors seem to be celebrating the Fed's eventual pause and reversal of rate hikes. Meanwhile, ADC (a very low beta stock) has trailed VNQ and SPY so far this year.

But I think the market is being shortsighted, presuming a "soft landing" even amid numerous signs of an oncoming recession.

If a recession does occur this year, as I suspect it will, then ADC will actually perform much better than the broader real estate index or stock market on a fundamental basis.

As such, ADC's underperformance so far this year should eventually turn into outperformance.

Bottom Line

Perhaps I am wrong and the US economy will narrowly avoid a recession this year with a soft landing. But I view that scenario as unlikely. I think we will get a recession that will drag down inflation and interest rates.

ADC's recession-resilient portfolio, fortress balance sheet, and peer-leading cost of capital make it ideally suited for this macro setup. That persuades me that there is more upside to come for ADC this year.

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NEW YORK, Jan. 30, 2023 /PRNewswire/ -- This press release provides shareholders of Cohen & Steers Quality Income Realty Fund, Inc. (NYSE: RQI) (the "Fund") with information regarding the sources of the distribution to be paid on January 31, 2023 and cumulative distributions paid fiscal year-to-date.

In December 2012, the Fund implemented a managed distribution policy in accordance with exemptive relief issued by the Securities and Exchange Commission. The managed distribution policy seeks to deliver the Fund's long-term total return potential through regular monthly distributions declared at a fixed rate per common share. The policy gives the Fund greater flexibility to realize long-term capital gains throughout the year and to distribute those gains on a regular monthly basis to shareholders. The Board of Directors of the Fund may amend, terminate or suspend the managed distribution policy at any time, which could have an adverse effect on the market price of the Fund's shares.

The Fund's monthly distributions may include long-term capital gains, short-term capital gains, net investment income and/or return of capital for federal income tax purposes. Return of capital includes distributions paid by the Fund in excess of its net investment income and net realized capital gains and such excess is distributed from the Fund's assets. A return of capital is not taxable; rather, it reduces a shareholder's tax basis in his or her shares of the Fund. In addition, distributions from the Fund's investments in real estate investment trusts (REITs) may later be characterized as capital gains and/or a return of capital, depending on the character of the dividends reported to the Fund after year end by REITs held by the Fund. The amount of monthly distributions may vary depending on a number of factors, including changes in portfolio and market conditions.

At the time of each monthly distribution, information will be posted to cohenandsteers.com and mailed to shareholders in a concurrent notice. However, this information may change at the end of the year because the final tax characteristics of the Fund's distributions cannot be determined with certainty until after the end of the calendar year. Final tax characteristics of all of the Fund's distributions will be provided on Form 1099-DIV, which is mailed after the close of the calendar year.

The following table sets forth the estimated amounts of the current distribution and the cumulative distributions paid this fiscal year-to-date from the sources indicated. All amounts are expressed per common share.

You should not draw any conclusions about the Fund's investment performance from the amount of this distribution or from the terms of the Fund's managed distribution policy. The amounts and sources of distributions reported in this Notice are only estimates, are likely to change over time, and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for accounting and tax reporting purposes will depend upon the Fund's investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The amounts and sources of distributions year-to-date may be subject to additional adjustments.

*THE FUND WILL SEND YOU A FORM 1099-DIV FOR THE CALENDAR YEAR THAT WILL TELL YOU HOW TO REPORT THESE DISTRIBUTIONS FOR FEDERAL INCOME TAX PURPOSES.

The Fund's Year-to-date Cumulative Total Return for fiscal year 2022 (January 1, 2022 through December 31, 2022) is set forth below. Shareholders should take note of the relationship between the Year-to-date Cumulative Total Return with the Fund's Cumulative Distribution Rate for 2022. In addition, the Fund's Average Annual Total Return for the five-year period ending December 31, 2022 is set forth below. Shareholders should note the relationship between the Average Annual Total Return with the Fund's Current Annualized Distribution Rate for 2022. The performance and distribution rate information disclosed in the table is based on the Fund's net asset value per share (NAV). The Fund's NAV is calculated as the total market value of all the securities and other assets held by the Fund minus the total liabilities, divided by the total number of shares outstanding. While NAV performance may be indicative of the Fund's investment performance, it does not measure the value of a shareholder's individual investment in the Fund. The value of a shareholder's investment in the Fund is determined by the Fund's market price, which is based on the supply and demand for the Fund's shares in the open market.

Fund Performance and Distribution Rate Information:

Investors should consider the investment objectives, risks, charges and expense of the Fund carefully before investing. You can obtain the Fund's most exact periodic reports, when available, and other regulatory filings by contacting your financial advisor or visiting cohenandsteers.com. These reports and other filings can be found on the Securities and Exchange Commission's EDGAR Database. You should read these reports and other filings carefully before investing.

Shareholders should not use the information provided here in preparing their tax returns. Shareholders will receive a Form 1099-DIV for the calendar year indicating how to report Fund distributions for federal income tax purposes.

Website: https://www.cohenandsteers.com
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About Cohen & Steers. Cohen & Steers is a leading global investment manager specializing in real assets and alternative income, including real estate, preferred securities, infrastructure, resource equities, commodities, as well as multi-strategy solutions. Founded in 1986, the firm is headquartered in New York City, with offices in London, Dublin, Hong Kong, and Tokyo.

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Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. The company undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

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In exact months, rumors about Apple working on a top-secret headset project have reached a fever pitch. But at the same time, the chatter has become increasingly convoluted — Apple is reportedly planning to use mixed reality (MR) rather than solely augmented reality (AR) or VR, but how exactly that will work is unknown. What will the device look like? And what features will it have?

That is where this roundup comes in. We combed through the rumors and reports to find all the latest key information, then combined it in one convenient location. Here is everything we know about Apple’s upcoming mixed-reality headset, including price, features, and more.

Price and release date

Apple analyst Ming-Chi Kuo originally suggested a January 2023 announcement date, with a shipping date coming in the second quarter of 2023. However, that January date has come and gone with no news. Elsewhere, Kuo has said that a development toolkit could make its way to interested parties two to four weeks after the reveal event.

In late 2022 and early 2023, a consensus begun to form around the idea that Apple’s headset will launch at a special event in spring 2023. Only a handful of devices are expected at the show, but the mixed-reality headset was strongly rumored to be the headline attraction.

However, the idea was thrown into disarray when Bloomberg reporter Mark Gurman claimed his sources had told him that Apple had pushed back the release date from April to June due to various hardware and software issues. If true, it’s just the latest in a long line of delays to have apparently beset the device.

The June date makes sense, though, because it would allow Apple to launch the device at its Worldwide Developers Conference (WWDC). That would deliver the company the perfect stage to get developers up to speed on the new device, which is allegedly going to run on a new operating system that developers will need to get used to.

Whatever the actual launch date, we’re talking about the first headset launched by Apple. The company is also rumored to be working on multiple devices, including a more affordable version that will follow the initial product. After that, Apple could launch a set of AR glasses that look more innocuous than a full-on headset. There’s no release date for those yet, though, and they could be a long way from launch.

As for the price, Kuo initially suggested a much lower price of $1,000. This puts the headset in consumer territory and what we would expect from Apple: expensive, but still considered mainstream and consumer-focused. However, in August 2022, Kuo then upped that prediction to $2,000, and Mark Gurman cited a similar figure.

That might have been an underestimate, though. The Information has offered details claiming the headset will cost $3,000. That would put it in the company of Microsoft’s $3,500 HoloLens 2, but with a price that high, it would likely be restricted to use by developers and professionals. That seems a little out of character for Apple. However, a January 2022 report from Display Supply Chain Consultants (DSCC) also claimed the price tag would be “several thousand dollars,” and later reporting from Gurman has backed up that $3,000 price. Leakers and reporters seem to have settled on that amount, making it an expensive first effort from Apple.

Interestingly, a report from Gurman in January 2023 stated that, despite the high price, Apple would actually lose money on each headset. That’s an indication of how much high-tech wizardry is packed into the device, and also suggests Apple is banking on its first-generation headset getting people in the door and paving the way for later products. With a $3,000 asking price, though, it could be a hard sell.

What’s in a name?

Ever since the first Apple headset rumors started to leak on the internet, people have been speculating about what the device might be called. Some early contenders have come and gone, but an answer appears to be getting closer.

The first widely promoted name was Apple Glass. This was mooted by leaker Jon Prosser in a YouTube video from mid-2020 after he claimed to have seen a prototype of the device. However, this name was shot down by Gurman, who expressed his doubt that Apple would name a product after the flop that was Google Glass. Fair point.

Gurman himself proposed a number of options Apple might go with, including Apple Vision, Apple Reality, Apple Sight, and Apple Lens.

In late August 2022, Apple filed trademarks for the names “Reality Pro,” “Reality One,” and “Reality Processor.” Gurman believes Reality Pro is the name Apple will use for its first headset, and that name indicates it will be a high-end device, perhaps one to rival Meta’s upcoming Quest Pro.

After that, Gurman believes a more affordable headset will launch without a few of the headline features of the Reality Pro. That pared-back device might take the name Reality One. Apple has previously used the “One” name, such as with the Apple One subscription service.

We don’t yet have a name for the AR glasses Apple is supposedly working on, but we’re sure a name will leak out soon enough. Perhaps it already has — Apple Lens seems like a strong contender to us.

A wraparound design and tons of cameras

Then there is the augmented reality side. To make this happen, the headset is going to require cameras to capture the outside world and feed it back to you. According to a report from The Information in early 2021, there will be up to a dozen cameras and lidar sensors mounted on the device, the latter of which Apple has already incorporated into devices like the iPhone 12 Pro and iPad Pro to help with augmented reality processing. However, a newer report from The Information in May 2022 asserted that there would actually be 14 cameras on the device — something that the outlet claimed again in an October 2022 report, which added that the headset would have two downward-facing cameras to record a user’s legs.

The May report from The Information also contained an interesting tidbit on the headset’s body: it could use straps that look awfully like those on the Apple Watch Sport Band. It is not the first time we have seen one Apple device take design cues from another — the AirPods Max headphones borrow the HomePod Mini’s fabric mesh and the Apple Watch’s Digital Crown, for example. In October 2022, The Information claimed the headset would resemble “a pair of ski goggles” and be made primarily from “mesh fabrics, aluminum, and glass.” The report added that the headset conceals its cameras noticeably better than the Meta Quest Pro.

Kuo, however, contends there will be 15 cameras — eight for AR, one for environmental detection, and six for “innovative biometrics.” Kuo backed this up with a further report in April that reiterated the claim of 15 cameras. It is possible both versions exist as prototypes, with Apple to decide which to settle on in the future. Whichever claim ends up being correct, it is evident Apple is taking the camera situation on its headset seriously.

Light as a feather

What about the actual body of the device? This is an interesting one, as it could be a real differentiator — and advantage — for Apple. A report from Kuo in March 2021 claimed the entire headset could weigh as little as 150 grams (0.33 pounds), which is about half the weight of many rival devices. The $1,000 Valve Index VR headset would weigh more than five times what Apple’s headset weighs if Kuo is correct, and Apple’s device would also weigh significantly less than the 722g Meta Quest Pro. Aiding that low-bulk goal would be the use of lightweight fabric instead of heavy plastic in the frame.

The Information claimed in May 2022 that Apple’s former design guru Jony Ive has been brought in as a consultant for the headset. Given Ive’s penchant for incredibly thin and light devices, we wouldn’t be surprised if the rumors that the headset will be super-lightweight prove to be correct.

When Gurman published a detailed exposé of the Reality Pro in January 2023, he claimed the device would be made from aluminum, glass, and cushions, and will be “reminiscent of Apple’s $550 AirPods Max headphones.” Gurman also stated that the device’s battery would be separate from the headset itself, with users tethering it to the Reality Pro and stashing it in a pocket. That will apparently help bring down the weight of the headset, and could also offset any concerns of having a warm battery lodged onto your head.

A 4K feast for your eyes

It is not just the exterior of Apple’s headset that sounds promising, as the interior could come with some eye-opening features, too — quite literally in the case of the display resolution. Reporter Gurman has claimed the device’s resolution will be 4K per eye, giving a huge level of detail. For comparison, the HTC Vive Cosmos Elite comes with a 1440 x 1700 resolution per eye. What’s more, according to The Elec, Apple has increased its pixels-per-inch goal for each eyepiece, up from 2,800 pixels per inch to a huge 3,500 ppi. That could bring unrivaled clarity to the headset’s creations.

A January 2022 report from industry analysts at DSCC backs up that idea, claiming that the front-facing lenses could have a 4000 x 4000 resolution. The report adds other enticing details, including that the front panels will be micro-LED displays, while Apple will add a third panel for peripheral vision. This will be an AMOLED display and run at a lower resolution than the micro-LED screens, which could help create an immersive, all-encompassing experience that keeps your peripheral vision slightly blurred to help you focus on what’s ahead of you.

Apple is said to be gunning for high-quality visuals in other ways, with Kuo alleging that the headset might come with iris recognition based on the tech his sources tell him is in the device (such as the cameras used for “innovative biometrics” mentioned earlier). Iris recognition could be used to authenticate you for Apple Pay, says Kuo, or to unlock your accounts, enabling you to perform these tasks without having to take off the headset to enter a password on your iPhone.

Kuo has also suggested in a tweet that the headset might smoothly switch between AR and VR modes, creating an “innovative experience” that could become “one of [the] key selling points of Apple’s headset.” That’s something Gurman agrees with, as he claims the Reality Pro will use a toggle like the Apple Watch’s Digital Crown to switch between AR and VR. That could deliver it a distinct advantage over rival headsets that are limited to either AR or VR or cannot switch as seamlessly between them.

We mentioned earlier how Apple has been trademarking various names relating to its headset. One more name claimed by the company is “Optica,” which Gurman speculates could refer to “some feature surrounding the device’s interchangeable prescription optics system.” A more exact report from Gurman claims Apple will offer custom prescription lenses that will fit into the device’s enclosure. Since we doubt a pair of glasses could fit under the headset, that’s great news for anyone who uses eyewear daily.

One thing we have not seen much news on is the refresh rate and field of view that will be used in the headset’s displays. The refresh rate will need to be high enough that lag and motion sickness are kept to an absolute minimum, and rival headsets typically aim for 90Hz or higher. We will have to wait and see what Apple opts for here.

While the visuals could be stunning, Gurman believes you’ll need to wear a pair of AirPods if you want to enjoy spatial audio. Reality Pro will have its own speakers, he says, but they will apparently be limited in their abilities.

Powered by an Apple Silicon chip

Powering all this tech would be a pair of custom-designed Apple Silicon chips. The main CPU will be one of Apple’s “most advanced and powerful” processors, according to Gurman, who believes this could be an M2 chip with 16GB of RAM. Apple’s ARM-based chip architecture is incredibly efficient — so much so that the M1 MacBook Air does not even need a fan — which makes it ideal for a compact device like a mixed-reality headset, where keeping things cool is essential (for both you and the chip). However, while Gurman previously claimed the headset itself might not need a fan, he changed tack in January 2023, saying it would likely come equipped with one.

According to Kuo, the dual-chip setup would consist of one made with a 4-nanometer process and another on a 5-nanometer process. Kuo says the former would offer the main computing power, while the latter would manage the device’s sensors. The combined power output would require one of Apple’s 96-watt adapters, Kuo believes — the same adapter as the one that juices up the MacBook Pro, which could be a potential indicator of the headset’s power.

The idea of two chips powering the headset has been backed up by reporter Gurman on several occasions. Gurman has claimed one of the two chips would be “on par with the M1 Pro in the MacBook Pro.” The secondary chip — apparently called the Reality Processor — will handle the headset’s graphics. Gurman says the chip combination could make the headset rather warm, so the battery has been shifted to an external unit that fits in your pocket to help offload some of the heat.

Kuo has also claimed that the headset will boast Wi-Fi 6E rather than the Wi-Fi 6 found in the current iPhone 14 lineup. This opens up a new 6GHz band, granting you lower latency and faster data rates. Considering the demanding nature of mixed-reality content, we think this claim makes a lot of sense.

However, despite all the power the headset might be loaded up with, sources The Information has spoken to claim the device will not focus on gaming (something the sources have criticized). According to The Information’s report, gaming is “a category of software that appeals to early adopters, which was important to the success of the iPhone and has been a big priority for Meta’s VR group,” so making a headset that does not put much of a focus on gaming might seem odd. Then again, given how Apple has never really fully embraced gaming with its other devices, it’s perhaps not entirely surprising.

Hand-tracking and eye-tracking

The headset’s vast camera array could allow for eye- and hand-tracking features. Apple has already patented ideas for these control methods in the past, both for the Mac and for a mixed-reality headset. Adding to that, The Information states Apple is aiming to use hand-tracking and a “clothespin-like finger clip” as input devices and is not looking to include gaming controllers with the headset. That idea has been backed up by a recent Apple patent that describes finger-mounted devices that could detect movement and provide haptic feedback. With that in mind, do not be surprised if Apple promotes the hand-tracking capabilities of its MR headset.

There’s another possibility. Apple recently uncovered a patent filed by the Cupertino giant that outlines how a pair of Apple Watches — one worn on each wrist — could be used to enable gesture controls on the headset. With two Apple Watches, a user could potentially use the palm of one hand as a trackpad of sorts and a finger on the other hand as a mouse, letting you interact with your virtual world. This being just a patent, though, there’s no ensure Apple is doing anything other than exploring ideas here — but it’s still intriguing.

Ultimately, though, we think this system is unlikely to be the one Apple goes for, at least at first. A single Apple Watch is not a cheap purchase, and buying two could add several hundred dollars to an already-expensive headset. There’s been very little to indicate that Apple is working on controllers for its headset, so we’re expecting the first-generation model will use its onboard cameras for gesture controls with your hands.

A report from Gurman seems to contradict both ideas (the clothespin-like clip and the Apple Watches). Gurman believes the headset will not require any kind of physical device to be worn on a user’s hands. Instead, eye-tracking sensors and hand-tracking cameras will detect what you are looking at on-screen, then allow you to open an app by simply pinching your forefinger and thumb together.

What seems more certain is the presence of eye-tracking capabilities, and a report from The Information in October 2022 added further details on this. Citing two anonymous individuals who apparently used to work on the device, the report states that eye-tracking would allow users to log in to accounts and make payments, with the eye verification allowing multiple people to use the same headset. Tracking users’ vision would also let the headset reduce graphical fidelity in peripheral vision, thus saving battery life.

An outward-facing display would show the user’s facial expressions to other people, but this would also save battery life by having a low refresh rate, according to The Information.

What about the operating system?

With all these advanced features reportedly in the works, Apple’s headset is going to need a powerful operating system to bring everything together. Gurman has commented it could be called “rOS,” with the “r” being short for “reality.” Since then, a number of tweets have surfaced apparently revealing the name “realityOS” in Apple’s code. Given Apple’s propensity to use full words in its OS naming schemes — think WatchOS, iPadOS, and MacOS — realityOS could be a good bet for the final name of the system.

In a tweet from early February, iOS developer Matthew Davis revealed a seemingly official Apple GitHub page that apparently accidentally revealed the name realityOS. Some of the comments in the code seem to make reference to iOS executables using realityOS libraries, which could hint at some form of interactivity between the two operating systems.

However, it seems Apple might have changed its mind about that realityOS name. According to Gurman, Apple is now calling the system “xrOS” internally. Gurman also claims Apple has patented the name using a shell corporation, which might suggest that it will use that operating system name publicly as well as internally — and that it could be gearing up for an imminent product launch.

Details on how the operating system will actually work had been scarce, until Gurman’s report in January 2023. There, the reporter outlined that xrOS would be an “ambitious attempt to create a 3D version of the iPhone’s operating system.” That means apps like Safari and Mail will exist in the Reality Pro’s three-dimensional environment. There will also be an app store and compatibility with Apple’s services, such as Apple Music and Apple TV+.

Those apps will be contained on a home screen much like that seen in iOS and iPadOS, with a grid of apps and widgets that can be reordered by the user. To input text, you’ll be able to use Siri voice commands or type using an Apple device (like an iPhone) or an external keyboard. Gurman said Apple is working on allowing you to type in midair using a virtual keyboard, but that this probably won’t be ready by the time the Reality Pro launches.

In one-on-one FaceTime calls, each caller’s face and body will be realistically rendered, according to Gurman, providing they’re both using a Reality Pro headset. In calls attended by more people, though, Memoji will be used, as the processing power required to portray everyone realistically will be too great.

Finally, Gurman’s report claims you might even be able to use the headset as an external monitor for a Mac. That will let you sit at a desk and use your Mac’s keyboard and mouse, all while viewing content through the headset.

Apple mixed-reality headset: Our wish list

It already looks like Apple is outfitting its headset with a ton of great features, but there are still a few extras we would love to see. At the top of the list is great battery life — after all, what is the point of having an excellent device to play with if it dies after a few minutes? Fortunately, the processor choice spells good news in this department, as Apple’s custom chip has led to incredible battery life in its MacBooks. That might be countered by the super-high resolution the headset is apparently going to use, but we have our fingers crossed.

The word is that Apple is developing a special operating system dubbed xrOS that will drive the headset. Apps and games will need to run on this system, but we are hoping that, due to the common Apple Silicon architecture in both the headset and Apple’s other devices, some degree of cross-compatibility will be available.

For instance, it would be great if the headset can recognize if you are playing a game on your Apple TV or your Mac, for example, and then mirror the content onto the headset with added mixed-reality goodness (provided the game is VR-compatible, of course). It would be a shame if Apple limits the headset to only work with xrOS-compatible games and apps, as developers might be put off if they must build apps from scratch for the new operating system.

One final request concerns the headset’s control method. We do not know whether the device will come with handheld controllers or will rely entirely on gestures. If it is the former, one thing Apple really needs to incorporate is haptic feedback. This is already included to great effect in every MacBook and the Apple Watch, so Apple knows how to make the tech work. Gentle taps that are built into apps and games would be a great addition that does not break immersion.

We might get to see some of these features in action, if not in the first Apple VR headset, then in the second-generation model. Kuo claimed in late 2021 that Apple was working on a second-generation VR headset that would be lighter and faster than the original model, with better battery life too. The Elec followed that up in June 2022 by saying that LG Display was hoping to supply the main OLED panels for the second-generation device, adding further evidence that Apple is already thinking ahead to its follow-up headset.

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