Wall Street broadly expects Apple to reveal a virtual and augmented reality headset this week, marking the tech giant’s first entry into a new major product category in nearly a decade.
But excitement over a possible mixed-reality offering is taking some of the spotlight away from other potential product rollouts that remain Apple’s bread and butter.
Apple stock (ticker: AAPL) is on a solid run, gaining nearly 39% so far this year. The rally could be credited partly to the artificial intelligence hype, which has helped power the Nasdaq Composite index more than 25% higher so far in 2023. Stronger-than-expected sales for Apple’s iPhone unit in its latest quarter and the company’s new multiyear, multibillion-dollar agreement with Broadcom (AVGO) have also helped lift shares.
Now, the stock could see further gains as Apple’s Worldwide Developers Conference kicks off on Monday.
If Apple does launch a mixed-reality headset—as many media reports have indicated it will—the product will likely hit the shelves in the latter half of this year.
Apple didn’t immediately respond to a request for comment.
In a note Friday, J.P. Morgan analyst Samik Chatterjee estimated the product would have a price tag between $2,000 to $3,000. That would make it one of the most expensive AR/VR headsets in the market. For instance, Meta Platforms‘ (META) versions—the Quest 2 and Quest Pro—sell at $399.99 and $999.99, respectively.
Goldman analyst Michael Ng wrote last month that the headset—with a $3,000 price tag—could add $11 billion to $20 billion of annual revenue beginning in fiscal 2024.
While a push into AR/VR would be an exciting move on Apple’s part, it would still be an early-stage product in a category that has so far proved to be largely disappointing. As Barron’s has noted, no company has created a wearable mixed-reality device that has garnered mass appeal.
That makes other potential launches from Apple still key. The company will likely announce several new MacBooks at the conference—most notably a 15-inch MacBook Air, the largest screen format available for the MacBook Air
product family, according to Ng.
Apple is also likely to preview updates to its operating systems for all of its key products. However, Ng doesn’t expect any transformative updates that would trigger outsize demand or accelerate consumers’ iPhone upgrades.
But improved iPhone features such as Dynamic Island—a pill-shaped notification bubble that displays information like music tracks and timers on top of the selfie camera—on all models beyond the iPhone 14 “should help to strengthen the Apple ecosystem,” Ng said.
