Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Apple mixed reality headset 'could be transformative over time' - BofA

Published 05/24/2023, 08:07 AM
Updated 05/24/2023, 08:07 AM
© Reuters.  Apple (AAPL) mixed reality headset 'could be transformative over time' - BofA

© Reuters. Apple (AAPL) mixed reality headset 'could be transformative over time' - BofA

BofA analysts said the Worldwide Developers Conference "could be a game changing one," with Apple (NASDAQ:AAPL) largely anticipated to unveil a Mixed Reality (MR) headset.

The analysts, who have a Neutral rating and a $176 price target on Apple, explained that they also expect the tech giant to showcase updates to iOS, iPadOS, macOS, watchOS, and tvOS. However, it is the MR headset that they feel "could be transformative over time."

"Although the lackluster uptake of the AR/VR (augmented reality/virtual reality) market and the transitory enthusiasm about the Metaverse create a backdrop of challenges, it is instructive to remember that Apple invents entire new categories that have the potential to disrupt existing markets (e.g., AirPods) and create entirely new markets," wrote the analysts.

They added that for the MR headset, "it's important to recognize that the headset version three years from now will be cheaper, faster and have many more use cases." However, they believe the adoption of the headsets can "drive substantial upside in software (high margin service revs)."

"We expect the initial uptake to be relatively modest with 200K units in 2023. However, if we assume that the software/services of MR apps will be more immersive in nature, we could see a Hardware/Software revenue ratio of 2x (similar to gaming consoles) or higher. In a scenario where Apple can drive meaningful adoption, we could see the headset drive potentially one-third of app store revs by 2026," said the analysts.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.