The big Apple news this week has less to do with what it’s done — which is a lot, based on the company’s record-breaking revenue — than what it’s planning next.
After reporting fiscal first-quarter 2022 revenue approaching $124 billion, the famously tight-lipped tech maker fielded a question about its role in the metaverse. The inquiry was natural, given the years-long anticipation of an Apple-branded augmented reality headset or glasses, as well as more recent expectations that a face-worn device could come as early as this year.
The real surprise was that Apple answered.
“Right now, we have over 14,000 AR kit apps in the App Store, which provide incredible AR experiences for millions of people today,” said chief executive officer Tim Cook. “And so we see a lot of potential in this space and are investing accordingly.”
The company typically declines to offer comments, even vague ones, about rumors, speculation or future plans. However, Cook has touted augmented reality as the future of spatial computing as far back as 2016. Now, as the metaverse proposition reaches a fever pitch, it’s almost impossible for him to avoid the topic.
The concept envisions the next-generation internet as a visual and immersive environment accessed through virtual reality and AR. The framework puts all eyes on giants like Facebook’s Meta and Apple — not just to produce the devices and platforms for it, but familiarize consumers with the tech and make it mainstream.
The social media platform has been taking significant steps to realign itself as a metaverse company. Its name change from Facebook to Meta was the most obvious signal, but it also brought its Oculus VR group under the Meta umbrella and just rebranded its flagship Oculus Quest 2 headset as the Meta Quest. These moves followed its September launch of Ray-ban smart glasses in partnership with EssilorLuxottica, the precursor to its upcoming AR glasses.
It’s not remotely clear if people are ready to wear AR devices over their eyes. But an Apple-branded pair of high-tech glasses could be a different story, given the company’s track record of popularizing technologies.
Take the iPhone, for instance. Before the Apple handset arrived in 2007, the smartphone was primarily a communications tool for business executives. The first iPhone changed the equation — everyone simply had to have one. Though barely more than a glorified mobile browser, it inspired lines around the block and marked the beginning of the end for Blackberry’s dominance. Other category-defining devices stretch across personal computing, MP3 players, tablets and more. The Apple Watch has been arguably buoying the wearables market for years, even after much of the tech media proclaimed smartwatches dead.
The examples are crucial, because the company didn’t merely make appealing gizmos. It taught people new behaviors, new ways of interacting with technology, that have become fundamental to modern life. Whether or not Apple can do it again with AR and the metaverse remains an open question. But if so, it could be transformative.
The world may find out soon enough. In a December note to investors, Apple analyst Ming Chi Kuo of KGI Securities claimed that some sort of Apple AR or mixed reality facial device not only exists, but may launch as early as 2022. He also believes that the tech company is already working on an upgraded model.
“Apple has begun planning for the second-generation AR/MR [augmented/mixed reality] headset, and the shipment schedule will likely be in 2H24 [second half of 2024],” he wrote. “Improvements for the second generation include the lighter weight, form factor design, battery system, and processor compared to the first model, which will go to mass production in late 4Q22 [fourth quarter of 2022].”
Wamsi Mohan, an analyst at Bank of America, said an Apple AR headset would be a “game-changer,” as he upgraded shares in the tech stock from neutral to buy.
His note to clients explained that “it will enable many new applications which will require high-performance hardware and higher access speeds,” and the company could charge a premium price for it. In other words, the benefit could flow back to the company’s iPhone business as well, with consumers upgrading their phones faster to keep up with all the advances.
As it is, Apple’s holiday quarter already topped expectations across almost every segment, including the iPhone. Even with chip shortages, the company saw revenue sail over the same period last year by 11 percent. Its “other products” category, including wearables Apple Watch and AirPods, grew even more, with a year-over-year gain of 13 percent.
Its coffers are expanding, which is quite a statement considering Apple’s success, and that was before the latest earnings results came out. Earlier this month, it broke new ground as the world’s first company to break $3 trillion market value at one point.
Cook and company can invest in AR and whatever future of computing they want on a seemingly limitless basis. They’re especially likely to do so, if it leads to more growth and profitability — perhaps even up to the point where they can’t help but break their silence and talk about it … even if it’s just a little bit.