Morgan Stanley says Apple is about to unveil a $20 billion platform
Apple’s upcoming mixed-reality headset has garnered high hopes from analysts for the company’s future earnings potential. Morgan Stanley’s Erik Woodring predicts that the technology has the potential to become “Apple’s next $20B+ compute platform” and has raised his price target for the company’s shares to $190, reflecting roughly 5.5% upside from Thursday’s close. Woodring believes that the headset’s launch can expand the total addressable market, similar to how previous Apple products have catalyzed market expansion across smartphones, tablets, and wearables. Other Wall Street analysts, such as Jefferies’ Andrew Uerkwitz, are also optimistic about Apple’s headset prospect and have raised their price target for the company’s shares. Many anticipate steep pricing for the first iteration of the product, but Barclays’ Ross Sandler noted that Apple will need lower price points to fuel mainstream adoption.
Apple’s Mixed-Reality Headset FAQs:
Q: What is Apple’s mixed-reality headset?
A: Apple’s mixed-reality headset is a technology that combines elements of virtual reality (VR) and augmented reality (AR). The headset allows users to see virtual images superimposed on real-world environments or create entirely new virtual environments.
Q: When will the headset be launched?
A: While the company may reveal the product and share it with developers this year, it is not expected to launch until 2024.
Q: What are some of the headset’s specialized features?
A: Users are expected to be able to operate the headset without hand controllers, using gestures and eye movement, and a homescreen feature mirroring a 3D iPhone display.
Q: What potential does the technology hold for Apple’s future earnings?
A: Analysts predict that the technology has the potential to become “Apple’s next $20B+ compute platform” and could fuel the market expansion across smartphones, tablets, and wearables, similar to previous Apple product launches.
Apple’s $20 Billion Platform Set to Be Unveiled, According to Morgan Stanley
Apple’s highly anticipated augmented and virtual reality product has the potential to become the next major compute platform for the company and generate significant revenue, according to Morgan Stanley. Analyst Erik Woodring stated in a note to clients that AR/VR currently accounts for less than 1% of Apple’s revenue, but could eventually bring in over $20 billion. Woodring raised his price target for Apple shares to $190, citing the potential for the upcoming mixed-reality headset, which is expected to be unveiled at the Worldwide Developers Conference next week. Woodring believes that the Apple headset will offer unique features and could expand the addressable market for AR/VR headsets to $100 billion by 2030 and $500 billion by 2037. Other analysts, including Jefferies’ Andrew Uerkwitz, have also raised their price targets for Apple shares in anticipation of the mixed-reality headset. However, analysts note that Apple will need to provide lower price points and a compelling “killer app” to drive mainstream adoption of the new technology.