Apple is in the process of buying a company called NextVR, its fourth acquisition of 2020. 9to5Mac broke the news last week and noted the transaction is worth $100 million. As of this writing, neither company has confirmed a sale is in progress, but startup reportedly told some of its employees they’ll need to relocate.
Why Apple is Buying NextVR
Founded in 2019, Newport Beach, California-based NextVR has partnered with several sports leagues and live event companies to produce virtual reality (VR) content. The firm also worked with PlayStation, Oculus, and Microsoft to host its enhanced VR experiences on their respective platforms.
Essentially, NextVR allows basketball fans to share the court with LeBron James or wrestling aficionados to step into the ring with WWE Superstar Brock Lesner. Despite the innovative nature of its service, the company hit a rough patch recently. After a failed fundraising round in 2019, the startup laid off 40 percent of its workforce.
Apple has recently taken a significant interest in the connected headset market. The iPhone maker is reportedly developing a VR headset codenamed N301 that features advanced 3D mapping capabilities. The company is also working with various games and app developers to create a VR and augmented reality (AR) ecosystem.
By purchasing NextVR, Apple can optimize the development of its VR headset using the startup’s expertise and patents. Moreover, the Big Tech firm could use its new acquisition’s technology in building its AR headset, set for release in 2023.
Apple is in a race with Facebook and Huawei to become the leading supplier of next-generation smart glasses. In that context, the company’s surprise purchase of a startup with 11 years worth of experience in the field makes sense.
Apple’s Acquisition Binge
With a market capitalization of $1.157 trillion, Apple has the resources to buy pretty much any company it wants, but this year, the conglomerate has gone on an acquisition binge.
In January, the corporation spent a reported $100 million to buy a deep learning startup called Xnor.ai. The startup develops artificial intelligence (AI) programs capable of performing complicated functions at the edge. Before its acquisition, the firm was best known for developing the person detection technology utilized by Wyze.
Earlier this month, Apple bought popular weather app, DarkSky. Business Insider stated the Big Tech giant could have made the purchase to bundle the program with its other premium software products, like News Plus. Last year, the corporation began putting its resources into building out its service offerings, including launching TV and gaming products.
Last week, the Cupertino, California-based corporation also snapped up an AI startup called Voysis, which specializes in optimizing digital assistant programs. One of the company’s specialties is improving the natural language capability of voice recognition apps. Therefore, Apple will likely use the firm’s technology to enhance the functionality of Siri.
In 2019, Apple acquired eight companies in total, so it buying four firms in four months is notable. That said, the economic instability caused by the coronavirus pandemic has halved global merger and acquisition rates. Accordingly, the Silicon Valley giant’s purchasing binge could be the result of it seizing an opportunity created by unprecedented market conditions.