August 10, 2022
Apple teases Metaverse plans, CEO Tim Cook plans to expand to AR apps

Apple teased its Metaverse ambitions on Thursday as CEO Tim Cook talked about expanding the company’s augmented reality app, prompting strong investor backlash.

The company has 14,000 AR apps on its App Store, and Cook suggests that number will grow with more investments.

“We see a lot of potential in this space and are investing accordingly,” Cook said in response to a question about his plans for the Metaverse, a broader term that generally refers to shared virtual world environments. Refers to what people can access through the Internet.

Apple analysts Ming-Chi Kuo and Bloomberg have reported that Apple plans to introduce an AR headset by this or next year, with the specs coming later. Apple has not yet publicly acknowledged these plans.

Cook’s comments on Thursday, and top estimates for quarterly profit and sales, helped propel Apple stock up about 5 percent in after-hours trading.

Apple’s services revenue rose 24 per cent to $19.5 billion (about Rs 1,46,455 crore) in the recently ended holiday quarter, on top of analysts’ estimates of $18.6 billion (about Rs 1,39,695 crore). The company added 785 million subscribers to its handful of paid services for streaming music and playing games, up from 620 million a year ago and 745 million in the previous quarter.

Cook said separately on Thursday that Apple’s research and development efforts are focused on the intersection of hardware, software and services.

“That’s where the magic really happens,” Cook said. “There’s a lot of investment going into things that aren’t on the market right now.”

An AR device can open up many opportunities to increase subscriptions. Existing offerings for fitness workouts and video content could become more engaging through immersive AR experiences.

And as services and customers have grown, Apple’s gross profit margin exceeded 40 percent, drawing praise from analysts.

Counterpoint Research analyst Neil Shah said Metaverse-related services, such as AR apps, could flip Apple’s revenue mix.

“Apple’s services business has seen significant growth over the next five years to surpass the potential level of the iPhone,” Shah said.

© Thomson Reuters 2022

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