Apple VR competitor: my biggest fear is Apple will fail

apple vr headset

Apple’s likely releasing its massively expensive VR/AR/mixed reality headset, Reality Pro, next week at WWDC 2023. One key VR competitor says he’s much less worried about Apple winning than he is worried that Apple will fail.


That would devastate the consumer VR market, setting back the industry years.

In this TechFirst I chat with Varjo CEO and co-founder Urho Konttori, Finnish maker of one of the best VR headsets on the market. Their headsets are super-high resolution (“human eye resolution”), have a wide field of view, impressive color, and LiDAR for high-quality mixed reality without occlusion fails.

We chat about the state of VR, where VR is going, what Apple will do, what Meta will do, and how independents can compete with the kind of ecosystem Apple can bring to bear. Check out the story on Forbes, or keep scroll to watch/listen/read our conversation.

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Subscribe to TechFirst: Chatting with Varjo CEO Urho Konttori about VR, Apple’s Reality Pro, and the future of the industry



A summary of our conversation, courtesy of GTP-4

This is a conversation between John Koetsier and Urho Konttori, CEO and co-founder of Varjo, a Finnish company known for making some of the best VR headsets on the market. They discuss the imminent release of Apple’s VR/AR/mixed reality headset, Reality Pro, at WWDC 2023, and its potential implications for the VR industry.

Here are the key insights from the discussion:

  1. Apple’s entry into the VR market: The author suggests that Apple’s entry into the VR market is significant but also carries risks. If Apple’s Reality Pro fails, it could potentially set back the consumer VR market and the industry for years​.
  2. Varjo’s technology: Varjo’s VR headsets are known for their super-high resolution, wide field of view, impressive color, and LiDAR for high-quality mixed reality. These features ensure a seamless integration where virtual objects and real objects mix well​.
  3. Varjo’s mission: Konttori explains that Varjo’s primary focus is on two aspects of mixed reality: human-eye resolution and mixed reality with cameras, aiming to transform the way we work and interact with the world. This focus has led them to work closely with industries like automotive, where high precision VR simulations can facilitate better workflows​.
  4. State of the VR/AR industry: Konttori sees the VR/AR industry as in a state of momentum, with devices improving and understanding of VR/AR design languages developing. He anticipates a take-off in the mass consumer appeal of mixed reality in the near future, which he has been eagerly awaiting for a long time​.
  5. Future of VR/AR devices: Konttori discusses the difficulty in predicting the exact usage characteristics of an excellent product in the VR/AR space for consumers. However, he is certain that the successful product will have a seamless integration between the virtual and the real. He also suggests that the successful consumer device will likely be wearable, allowing users to be on the go​1​.

Full transcript: Apple, Varjo, and the state of VR

Note: this transcript may contain errors. Check the video or audio to be certain.

John Koetsier:

Where is VR going in 2023?  Hello and welcome to TechFirst. My name is John Koetsier. 

Apple’s probably releasing Reality Pro or Reality One or whatever they’re gonna call their AR VR headset and of course, that’s a big deal for the industry. The best product on the market right now, and maybe even after Apple’s release, is probably the Varjo XR-3 which is super high res human-eye resolution. 

The company says it has 115 degrees field of view, which is the widest available, really good color, LIDAR on board for really good depth awareness. So virtual objects and real objects mix well. 

We’re chatting with Urho Konttori, CEO and co-founder of Varjo, about where the space is going and maybe what’s gonna win. Welcome!

Urho Konttori:

Thank you, John.

John Koetsier:

I’m super pumped to be chatting with you. We have been trying to get connected for something like a year. Your reps have reached out and it just hasn’t fit, hasn’t worked for whatever reason. Glad that we’re finally chatting. You’re in Finland, it’s like 6:30 p.m. but the sunlight is streaming in, so that’s great. Thank you for being here. 

Maybe before we get started, we’re gonna dive into everything: VR, the state of the industry, Apple, Meta, new devices and even what VR/AR mixed reality can become. All that stuff we’re gonna dive into. Before we get started, intro your company, why you started it, and what you do.

Urho Konttori:

Yeah, so Varjo is a roughly seven-year-old started from Helsinki, Finland. We actually started in September 2016, so not quite seven years yet. We started focusing on solving maybe a couple of fundamental problems on changing the way we work in the world, focusing on two crucial aspects of mixed reality. 

First of all, we started chatting with automotive companies in the very beginning and they were adamant that they really can only change their workflows once they’re able to see the things exactly as they will turn out. So we nailed down one of the principles as human-eye resolution must be in all of our products.

We first focused on the virtual reality side and then the second aspect that we really focused on the training and simulation side was mixed reality with cameras. So, video pass-through and that ultimately allows you to have that, like, a perfect fusion of, for example, in a simulation systems case, the cockpit, and you being fully acting with the physical world things and then everything else being synthetic around you. 

And we really started focusing on how can we actually make that happen, what Magiklip and HoloLens from Microsoft have been talking that they will be able to do, yet not quite delivering on the promise. I had been working at Microsoft, so I knew a lot of people from the HoloLens team and knew some of the struggles of the optical see-through from back in those days. 

Our premise was that mixed reality will be fundamentally changing everything that we do in the future, especially in the professional space.

And hence our focus on just purely the businesses, solving those key problems on how to see things that don’t exist yet, how to see them instantly, just as if they existed, and then enabling a completely new way of doing training and simulations at a fraction of the budget they used to be done in the past.

John Koetsier:

Great intro. Where do you see the industry right now?

We’ve had… there’s a ton of product out there. There’s a ton of different price points out there. You’re more on the high end because of exactly the industry that you just talked about that you’re hitting. There’s some consumer devices out there that Meta has put out there. And the rumor mill has it that Apple will release its product at a pretty significant price point: $1,500, $3,000 US, something like that.

Where do you see us right now in the VR/AR industry?

Urho Konttori:

I think in many ways we’ve had, since the 80s, we’ve had a couple of false starts of VR. And I dare say that even in this generation, within the past decade, we’ve had a couple of things that feel like they have been restarting from scratch.

Yet the reality is that this last decade has been all about building the momentum to get the devices to be good enough, starting to get the understanding of what kind of design languages work actually in virtual reality and understanding a little bit of that in the context of mixed reality as well.

And now, in the next half a year, in the next quarter potentially even, we’re seeing a couple of like drastic take-offs, I believe, in the mass consumer appeal of mixed reality, something that I have been waiting for a very long time. Whereas we have been focusing on very niche problems.

I can’t wait to see like the mass volume devices tackling the generic problems of everyday lives.

John Koetsier:

How do you see the use case? Let’s say that somebody nails it. Maybe that’s you, maybe that’s Meta, maybe that’s Apple. Let’s say somebody nails it for consumers. Right device, right price point, right ecosystem, everything.

How do you see that device being incorporated in somebody’s life?

So we’ve had examples, desktop computers and laptops, which you use mostly for work, but some fun, that sort of thing. We’ve got handheld computers, our phones, right? They’re never more than three feet from our body, right? And we look at them instantly and we probably check them 500 times a day.

What do you see as the usage characteristics of an excellent product, consumer product in the VR/AR space? Is it two hours a day? Is it eight hours a day? Is it something you put on, boom, use, take off? What’s it look like to you?

Urho Konttori:

Really great question. Honestly, I have no idea what that recipe will ultimately be. Maybe in a few decades, it will be direct brain integration, and then it’s going to be a whole different world. One of those singularity moments, it’s so impossible to see that before it actually happens. Same kind of thing I see also for the mass appeal mixed reality devices. It’s very difficult to see how it’s going to be integrating into our everyday lives. 

I don’t see it replacing laptops.

I don’t see it replacing phones at least for like easily a decade.

It’s always nice to be proven wrong later on. But really, very seldom have these advances in devices have replaced actually any of the previous devices. Like when we started having 2D Windows interfaces, it didn’t replace the text input interfaces either. And same thing when we started having 3D games, it didn’t stop having 2D games. And mobile phones certainly haven’t quite replaced anything, but they have brought so much new into our lives.

And that’s the kind of thing I’m hoping happens also with mixed reality. That it doesn’t fully replace anything fundamental, but it adds to our mix of experiences that we do every single day. 

Maybe in the side of education, I see the biggest potential for both VR and mixed reality on like creating sympathy and empathy and concreteness to everything that has been happening in the past or things that are abstract and sometimes difficult to convey, hopefully would be easier to be done in mixed reality systems in the future. Let’s see.

John Koetsier:

I like that answer because the future is ultimately unknowable.

One of the challenges I’ve always personally had with VR devices, Meta devices, Quest, is that it’s not instant on and it’s not instant in the environment, right? And so my smartphone, boom, pick it up. I’m right where I need to be. It’s instant. Laptops close to that, right. Your big TV on the wall, close to that as well.

VR is like a thing. I’m gonna do it. I need to get my environment set up. I need to turn this on. It’s got a 30-second, one-minute startup. Then a boundary, my hands, all that stuff. So there’s challenges there. I wonder if a truly mass consumer device needs to address those issues.

Urho Konttori:

Yeah, I’m absolutely there with you.

I think one of the fundamental things is that with your phone, you’re doing like 20 things kind of simultaneously. They’re running there all the time and you’re jumping between them. You’re getting notifications and all of that, one is leading you to have like instant access to next thing you need to do with that device.

Whereas really where we are now with VR headsets, for example, it feels much more analogous to the console gaming. So you have that one thing that you want to be doing, and if the thing is implemented well, you have fast access to continue what you were doing before. 

Like when you’re playing a game, at least I try to play a single game until the very end. And it may take like a couple of weeks of time for me, but I really want that instant jump into wherever I was previously. Like opening the book from the same page, that type of access.

But phones are fundamentally different. You’re doing all sorts of different things simultaneously and that I believe fits into the mixed reality much better. So that you’re able to have like a continuum of multiple paths that you’re doing, that are running simultaneously on that system or in the cloud, and you’re jumping to them just the same way as you’re doing with laptop or with phone.

But that does not exist yet. And it’s one of the things that I feel Apple could be that one company that kind of cracks that DNA of like continuous productivity in mixed reality. So, very eager to see what they’re actually doing.

John Koetsier:

Great segue, because that was going to be my next question. We have to talk about Apple.

Apple is coming into the space. It’s an interesting moment for them. Tim Cook, by all accounts, has not been nearly as involved in product, of course, as Steve Jobs would have been. But it is the class of product that some at Apple will be hoping is the next platform, the next thing, the next big consumer device. And others at Apple are clearly suspicious that it will be, or that it’s ready, or that it’s good to be.

Now, your biggest fear about Apple, as we talked before we started recording, is not that they’ll win; it’s that they’ll fail. Talk about that.

Urho Konttori:

Yeah, I mean, people have been waiting for this moment so long. And now, finally, it seems like Apple is actually going to be doing it. As far as I understood, they were supposed to be delivering Apple’s mixed reality headset in 2017, and then 18, and then 19, and 20, 21, 22.

Now finally it’s coming here.

So there must be some level of expectation, like a piled up interest in seeing what they actually do. Simultaneously, Meta has been putting a lot of effort into building virtual reality into a thing and they have been doing a great, great job with that one. But it hasn’t yet reached that kind of like a hundred million device market. So nobody really sees that that work has yet succeeded fully. 

Now, if Apple would be then not doing a good job with the product, it could be one of those — I cannot say last nail in the coffin — but it will kind of put VR in the consumer segment into deep freeze for a while.

Now, of course, what I actually believe is that they will do a very good job. It’s going to be eye-opening. The product will be marvelous. I very much applaud that they are focusing, as per rumors, on the high end. So, doing things really well as opposed to doing it at a reasonable, affordable cost. Because that’s the only way that, at least from our past, it has been possible to actually do a significant change and impact our customers’ workflows. So then I hope that the same kind of logic applies also to the generic workflows of the mass markets.

John Koetsier:

Whatever Apple does, as they’ve learned since the days of, I guess you could say the Mac, but certainly the iPhone, they do as an ecosystem play. And every Apple product that you acquire increases the value and utility of the other ones that you own, and the software that you purchase tends to work across multiple platforms, or at least have connections to those different devices.

How do you see that playing into the future of VR, mixed reality, AR for consumers, and how does that impact your company and your product?

Urho Konttori:

Well, first let’s tackle our approach to this. We’re very much focused on solving a few key problems in a few key segments, and we do believe that we can still move faster and deliver better products because we don’t have the hindrances of the cost structures or needing to do compromises due to creating a generic device. So we have a very, very [defined focus] as a startup needs to have.

So you cannot solve all the problems in the world as a small company. 

Now, how Apple’s ecosystem play can leverage in mixed reality, they are one of the biggest entertainment companies in the world with Pixar, with Lucasfilm, with Disney, and that consortium itself is a huge player in consumer mixed reality. I could very certainly see interesting ways of experiencing movies first, even on mixed reality platforms. Because you could argue that you can deliver a potentially even better experience than even in a movie theater on a mixed reality system. You can have better audio or equal audio. You can have a better viewing experience because you’re the sole person that everything is optimized for. 

And you can certainly see that same thing applying to Apple Music, to music concerts, these kind of things. So it has a lot of interesting reach. And then of course the whole gaming and application ecosystem play, ability to leverage the existing application in the iOS platform. They have a lot of opportunities there for certain. But we only need to wait for a couple of weeks to actually know that for sure.

John Koetsier:

It will be interesting. Meta is also working on additional products and not all consumer level. Talk about what you see happening there.

Urho Konttori:

Well, now they of course brought their first pro focus device to the market, the Quest Pro. I was hoping a little bit more from the mixed reality on that one because, from our point of view, as we have been working on these like spearhead use cases of mixed reality and VR, it has taken a very long time to actually, together with our partners, develop also the software because these devices are just like monitors; they don’t solve anything. They let you see something, but for a customer, you need to have a solution. 

Solution consists, like in our case, obviously, of a headset, a software, potentially some other hardware, maybe some networking solution, maybe even spaces that are needed for training purposes or something like this. So, and building that one really has taken out of the timeline of Varjo, it has taken like maybe five years to reach a point where we start seeing that companies have actually gotten to the level that they start expanding into bigger volumes and they start… They have completed the validations that the business justification, the business drivers are actually real and they’re getting their money’s worth by investing into changing their practices. Because it never is, in our case, just about let’s buy a headset. It’s about let’s change the way that we work. That’s what the companies need to do. And that really does not happen quickly. 

So, from our point of view, we have very much been wanting to see more and more companies come to the mixed reality market so that the whole ecosystem can be grown, not by a small Finnish startup working with a few handfuls of partners.

We do have like over 1,000 customer companies using our headsets. So we’re not like just a couple of companies using our stuff. Like out of Fortune 500, I think like 25% use our headsets and we start to have decent volumes and so forth. But still, like really we are a tiny company and the world is a huge place and we need more players to actually grow also the application ecosystems. 

So the solution is ecosystems, from our point of view. And the biggest values that we always see in our customers are in the range of mixed reality. So from that point of view, Meta has been doing a great job in creating consumer experiences in VR and helping companies invest in creating those types of experiences. Now having a bit more entrance from them in the professional ecosystem, great. But the biggest values are coming from the mixed reality side and Quest Pro was not quite as good on that as I hoped.

John Koetsier:


Urho Konttori:

And I do know for certain now that Quest 3 will deliver on that improvement. And hopefully that will be then driving much more like a broader ecosystem of solutions in the mixed reality domain.

John Koetsier:

Excellent. Let’s talk a little bit about your products and where you’re placing them. You talked about aerospace. What other verticals are you seeing success in, and how are companies using what you’re providing?

Urho Konttori:

I mean, as you pointed out, aerospace is the biggest success story for us. The training, overall, simulations overall.

Just as a napkin calculation for your sake, a typical flight simulation on a dome system costs maybe 4,000, well, let’s call it 2,000 to 4,000 dollars an hour to run, right? And they take huge spaces. That’s why it’s so costly.

They are in very desolate places, typically, so you need to actually travel to come to a simulation system. It does not come to you. It’s still cheaper than actually flying, so an hour on a F-35 is, let’s call it around [3-4,000] auxiliary expenses not included. So, still simulations on a dome are cheaper, but then there are not enough of them. They are still relatively expensive and it’s very difficult to actually do more of a squadron or flight type of exercises on them, let alone bigger exercises. 

Now, the interesting thing when it comes to virtual reality and mixed reality is that you get very much the same experience at the fraction of a cost. Instead of thousands of dollars an hour, it’s going to be like maybe a couple of hundred.

Because you have many people typically working in there and they’re typically not cheap people, so you end up with some level of cost always. But the hardware is not that cost, so you can have easily like a huge deployment volumes on the devices. And then you can start doing new types of training. 

So instead of trying to train a pilot how to fly, you can start doing flight tactics, like you can start to have different walks of military joining in together.

And we start seeing that some of the simulation systems can have like tens of thousands of people simultaneously in a digital combat environment, which is basically replacing the kind of military exercises people used to be doing. Like every couple of years, a huge hula-balloo that there is a big exercise happening in the South Pacific or somewhere else. 

Now you can have those like every single week, and nobody knows that. Which is, of course, how they prefer. And it’s, by the way, one of the things that I have been saying, that in this domain, like in the defense industry, metaverse has existed very much in the way that people have been imagining it to be but it simply is not public metaverse. Anyway, like that’s a huge area. The same applies, by the way.

John Koetsier:

While you’re on that one, I’ll just chime in. It reminds me of military training that they were doing, I believe, on Call of Duty or something like that, or other things like that. They’re training infantry with tactics and stuff like that there. I mean, that’s really, really interesting.

The group stuff that you can’t do in a sort of dome flight simulator, extremely interesting. And it says a lot for how the…

Urho Konttori:

I mean, anecdotally, every single Finnish male pretty much goes to military, right? And every single one of them these days is getting trained in these types of virtual training systems. Typically, in front of a monitor, but you’re still in the same kind of metaverse as you could be with also a VR headset or mixed reality headset. But it’s all about being able to do a mass training of people in those types of systems.

For strategies also, not just tactics.

John Koetsier:

Yeah, yeah, yeah, interesting. And what other industries are big for you?

Urho Konttori:

Well, obviously, then, well by the way, civilian industry is included for us in there as well. European Aviation Safety Agency has approved our systems as the only ones where you can actually train certified pilots. So you can have your commercial airline pilots doing training with various base systems, whether it’s helicopters or planes, and the same now happening in the States, same certificate. Certifications are happening now as well. 

Well then, design engineering side.

We’ve had like a biggest change in the automotive industry, where it used to be so that car designs were done with clay models. So, obviously, you would be designing them with CADs. That has been taking the case for a couple of decades. But when you actually want to see how it’s going to look like, you used to do a full-scale model of it which is then fully polished and painted and varnished. And then you would be able to see how it’s actually going to look like, or you would be building internal mock-ups of the future car, of the interiors. But you could only see one configuration at a time and then it would be very laborious, time consuming. 

Now, when we came to the market, I had one of the automotives, one of the carmakers’ lead designer was on when Varjo was one year old. We were showing the human-eye resolution headset to him.

He took the headset — he looked like a boxer, a little bit like you, like in good shape, a bit bald — he puts the headset and starts going like, we’re like, whoa, this is going to end so badly. And because obviously it was not a product at that stage, like cables loose in there and so forth. And then he takes it off. I have been waiting for this for 20 years. And that’s when we knew that we are going to actually have an impact in that segment. 

But it still took a very long time to actually have all of the software to the shape that the same software that the car designers use. You have a single click and then you put the headset on and you see in 3D what you just saw on the screen. You see it exactly through to life in front of you. And then you can invite colleagues, like tens of colleagues simultaneously having a design review together with you on that model.

John Koetsier:


Urho Konttori:

So, that change has certainly taken place.

And at the moment, almost everybody else except Chinese companies are using our headsets, mainly for the reason that we don’t sell in China right now. So it’s difficult to make that happen right now, but that certainly is the biggest other segment. Then we have research, medical side. Medical is mainly university research level right now. We don’t see pretty much anybody using that much VR or mixed reality for actual clinical use. 

There is quite a bit of orientation training for life-saving activities, especially again in the defence side. You have soldier training for what to do when something happens and how to keep people alive type of training. But it has been a little bit surprising to us how slowly that segment has been taking off. Yet at the same time they have a lot of regulations and are all very happy for it that they don’t like to try all the time all the new things. So it makes sense that the industry has some inherent slowness to it. But it hasn’t been moving as fast as we hoped. 

Research, on the other hand, academic research is moving really fast, different types of researchers in research institutions or corporate research… very much like a wild west. You have a hundred companies and you have a hundred different things that they’re doing. Like nobody does the same thing. So very early days in that sense. But those are it, like training and simulations, design engineering and then research and medical. That’s how we see the world right now.

John Koetsier:

Cool, cool. Well, this has been fascinating. It’s been great to chat, finally to connect, and to learn a little bit more about what you’re doing, also your vision for consumer adoption of VR, AR, mixed reality.

We’ll be looking very closely at what Apple releases in just a couple weeks, and hopefully it’s something really, really good. I personally, I mean, I don’t know. I really, really don’t know. I think this is such a tough nut to crack. I think it’s the hardest market almost ever to crack for computing because the demands are so insane. The challenges are so crazy. The technological constraints are so severe. So it’s going to be interesting. It’s going to be a two-part device as well.

We’ll have to see what Apple comes out with that, what Meta does, and also where you go. Thank you for this time.

Urho Konttori:

Thank you, John. Pleasure.

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