apple (AAPL -0.47%) 2023 could be an epic year. To kick things off, the company has already announced new M2 Pro and M2 Max chips for its long-popular MacBook laptop lineup, as well as the reintroduced HomePod smart home speaker. will definitely appear later this year.
But amid all the rumors, the biggest item that really makes Apple stand out is its augmented and virtual reality (AR/VR, or simply “MR” for mixed reality) headsets. Ahead of this potentially game-changing news, is Apple stock he’s a buy for 2023?
Apple MR Headset: The Long-Awaited Next Big Hit?
Apple has reportedly been working on a mixed reality headset for some time now, and speculation is rife that the company will host an official launch event this spring. Last year, CEO Tim Cook addressed the issue of the “Metaverse” to bolster the legitimacy of this rumor. This is probably a marketing tactic to keep existing headsets out of the market. It’s clearly from rival his Facebook parent company. meta platform‘Quest 2 and Quest Pro.
The Apple MR headset appears to be able to switch between a real-world view with digital overlays and a fully immersive virtual experience, such as using the headset as a display for the user’s Mac or MacBook. And as you’d expect from Apple, the headset doesn’t just integrate with other Apple hardware. The company also appears to be working with media companies such as: disney To bring the 3D experience to MR devices, Apple TV is also reportedly getting some upgrades to support a more immersive viewing experience.
It’s obvious why Apple wants to get involved with AR/VR, Metaverse, Web3, or whatever “next generation” computing experience term we want to apply here. The tech community is already immersed in digital workflows, so there is real value in making this work more practical and efficient. Kids these days also love watching TV and playing video games.
If Apple wants to continue its rapid growth, it needs new hits as well. After all, the current breadwinner, designing new chips for his iPhone and his MacBook line-up, has limited profits to be squeezed out of the iPhone. At some point, investors will start demanding another shot at the arm to keep the growth engine running, and MR could just be the right drug.
|
Apple revenue segment |
Revenue for fiscal year 2022 (12 months ending September 2022) |
YoY growth rate |
|---|---|---|
|
iphone |
$205 billion |
7% |
|
Services (software and subscriptions) |
$78.1 billion |
14% |
|
wearables, home, accessories |
$41.2 billion |
7% |
|
Mac |
$40.2 billion |
14% |
|
iPad |
$29.3 billion |
-8% |
Data Source: Apple.
Any problems before the race starts?
But getting an ambitious project like an MR headset ready for race day isn’t easy. Apple has been working on augmented and virtual reality technologies for years (Meta has been unfairly hurt by the transparency of the cost of launching an ecosystem of new computing devices). has been condemned). Not all of that effort pays off. Apple has reportedly shelved his AR glasses project, instead focusing on a (hopefully) cheaper follow-up to his headset due out this spring.
This is probably a good move, as reports indicate that the first-generation Apple MR headset could cost as much as $3,000. Especially when the Meta Quest 2 is available for hundreds of dollars and the Meta Quest Pro MR headset costs $1,500.
Nevertheless, Apple already has an extensive ecosystem of devoted fans using iPhones, MacBooks, Watches, and more. If any of these users are interested in MR, chances are good they’ll consider Apple’s new offering. I expect Apple MR devices to start small, but through headset sales and spending on related services and software, it could grow into a steadily profitable business within a few years. there is.
Is Apple stock a buy in 2023?
You may have thought you were buying Apple stock after the company announced its 2022 earnings report a few months ago, but the business itself hasn’t changed much since then. The iPhone remains popular, especially in new emerging markets. The Mac could have a great year if it can grab market share from struggling laptops. intel When AMDWearable devices such as iPads and Watches continue to deliver consistent results. Apple is also very profitable, returning excess cash through share buybacks. The new mixed reality device of 2023 will be Gravy.
What has changed in the last few months? Thanks to the bear market, stock valuations have become quite reasonable. As of this writing, Apple is currently trading at 22 times his 12-month earnings and 21 times his 12-month free cash flow. An update is expected in early February following the financial update for the first quarter of fiscal year 2023. But at the moment, this is a great business for building a portfolio. Apple stock is my book buy.
Randy Zuckerberg, former director of market development and spokeswoman for Facebook and sister of Meta Platform CEO Mark Zuckerberg, is a member of the Motley Fool’s board of directors. Nicholas Rossolillo and his clients have held positions at Advanced Micro Devices, Apple, Meta Platforms, and Walt Disney. The Motley Fool has positions in and endorses Advanced Micro Devices, Apple, Intel, Meta Platforms and Walt Disney. The Motley Fool recommends the following options: Intel’s Jan 2023 Long Call of $57.50, Walt Disney’s Jan 2024 Long Call of $145, Intel’s Jan 2025 Long Call of $45. Long dollar call, Apple long $120 Mar 2023 call, Walt Disney short $155 Jan 2024 short $45 Jan 2025 put to Intel, Mar 2023 $130 short call to Apple. The Motley Fool’s U.S. headquarters has a disclosure policy.