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AT&T announced it will exclusively sell the Magic Leap One: Creator’s Edition AR headset in its three flagship stores starting next week. Currently, the stand-alone headset is only available for developers to purchase on Magic Leap’s online website for $2,300.
Business Insider Intelligence
What it means: Magic Leap One’s exposure in AT&T’s flagship stores will play a big role in boosting device recognition and, as a result, could spur adoption of the consumer-focused edition — which is a massive opportunity for AT&T.
- AT&T’s position as a content partner for the Magic Leap One headset will boost subscriptions of its services. AT&T-owned media properties — including CNN and HBO — are being spun into AR apps for the Magic Leap One headset. AT&T also plans to introduce a DirecTV Now AR app for Magic Leap. This partnership helps to expose more consumers to AT&T’s digital content offerings, and could also further incentivize users to pay for subscriptions to some of these services.
- The Magic Leap One headset opens up an opportunity for AT&T to diversify wireless revenue streams. AT&T’s partnership with Magic Leap provides the carrier with an additional network-connected device customers can pay a monthly subscription to. Broadening its source of wireless revenue is necessary since the US smartphone market is approaching saturation. And since the deal gives AT&T’s upcoming 5G network exclusive connectivity rights, consumers looking to pay for a subscription will need to be an AT&T subscriber.
The bigger picture: US mobile carriers — including Verizon, T-Mobile, and Sprint — need to follow AT&T’s lead in forming exclusive partnerships with immersive headset vendors.
Our survey data shows consumers are highly interested in paying for a wireless plan for AR and VR headsets, despite their lack of widespread availability. Just 9% of respondents to Business Insider Intelligence’s Telecom Competitive Edge Report (enterprise only) said they owned a VR or AR headset, but almost 20% are interested in paying a monthly subscription for the devices.
This suggests that, when 5G is available and more capable of supporting these devices, there will be significant demand. And since AR and VR headset shipments are poised to grow 667% between 2019 and 2023 to reach nearly 69 million units — equating to what Business Insider Intelligence estimates to be an $8.3 billion annual opportunity — US wireless carriers need to start mapping out their partnership plans.
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