APPLE: World’ largest market cap stock has its World Developers Conference next week, June 5-9. It is potentially set to launch its long-awaited AR/VR headset, in its biggest launch since the iWatch in 2015 and AirPods in 2016. This could help firm up its longer-term earnings growth prospects (see chart), reignite enthusiasm for the out-of-favour ‘metaverse’, and further boost demand for high performance semiconductor chips. Apple’s (AAPL) stock price is up 38% this year, near quadruple the S&P 500 gain. This has taken its forward P/E ratio to 27x, well above long term average 21x, even as earnings growth forecasts stagnated after the pandemic boom. The company could do with a new growth driver, alongside its fast expanding services empire.
WDC: Apple is teasing that ‘a new era begins’ at its annual World Developers Conference event. With speculation high it will be launching its long-awaited AR/VR headset, alongside the more typical range of software updates across its iPhone, iPad, iWatch and Mac products. This could be a significant boost to the ‘Wearables, home, and accessories’ business that has grown to be 10% of Apple revenues, behind only the iPhone (66%) and high-margin Services (21%). A headset launch would come ahead of the likely iPhone 15 and iWatch 9 launch in September.
AR/VR: Expectations are high Apple will unveil a tentatively named ‘Reality Pro’ augmented and virtual reality headset, focused on the developer community, with a $3,000 price tag. If anyone can make AR/VR cool, develop a consumer headset ecosystem, and drive adoption, it’s Apple. It could take over where Meta’s (META) QuestPro left off, reboot the suffering metaverse, and give another boost to demand for high performance semiconductor chips. See @MetaverseLife.
All data, figures & charts are valid as of 01/06/2023