How large is the business opportunity for Apple’s AR glasses?

One Wall Street analyst, Evercore ISI’s Ami Daryanani, has decided to size up the business opportunity for Apple’s AR glasses.

"Apple Glasses" designed by Martin Hajek for iDrop News
“Apple Glasses” concept designed by Martin Hajek for iDrop News

Patrick Seitz for Investor’s Business Daily:

In a note to clients Thursday, Evercore ISI analyst Ami Daryanani said he expects Apple to introduce its first computer headset later this year. “We expect the hype into a formal launch in late 2022 to serve as a catalyst to the stock price,” Daryanani said.

An AR/VR device would enable Apple to extend its iOS platform and App Store from the iPhone to a brand-new market, he said.

In a base case scenario, Apple’s headset would have a comparable trajectory to the Apple Watch, Daryanani said. As such, it would contribute $18.1 billion in sales and 19 cents in earnings per share in its fifth year on the market, he said. That would be about 4% to 5% of estimated sales and earnings.

In a bullish scenario, the headset would follow the adoption trend of the AirPods wireless earbuds. That means it would generate $38 billion in sales and 41 cents in per-share earnings at scale, he said. In that case, it would account for about 8% of sales and earnings.

MacDailyNews Take: Apple reportedly is working on two headsets. The first is a mixed reality (AR/VR) headset that is expected to retail for some $3,000. it will appeal mainly to developers who will use it to prepare apps and content for Apple’s lightweight AR glasses to arrive in 2023 or 2024. It’s this second device, one for the mainstream, that is Apple’s real business opportunity.

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  1. IF they can replace regular glasses (or for people like me, aspherics) with AR glasses the market will be significantly greater than for the iPhone. Glasses wearing people will replace their glasses with them and non glasses wearing people will get them for the AR aspect.

  2. That’s the question, how much is the potential market/revenue? Apple’s stock performance in the next 12 to 24 months will be significantly influenced by the answer of this question.

  3. Seems to me it will depend – at least in part – on whether or not there are privacy / abuse concerns associated with these glasses, like recording or face recognition possibilities. This turned out to be a great concern when the Google Glasses came out and the public reacted very hostile – rightfully so imho – to people wearing them. Glasses with advanced technologies have – besides grwat benefits – huge abuse potential.

    I remember MDN back then also voicing these concerns…

  4. People are not getting it. The glasses will eventually replace the phone. This doubles apples market cap in a 10 year span. If the design is a hit. So yea, 6trillion. Current pe then should be around 60 initially as they grow into that product.

    1. Replace the iPhone with glasses? Exactly, how do you make a phone call with a pair of glasses? I think AR glasses will be simply another accessory to the iPhone. It doesn’t seem as there is much room in a pair of glasses for a decent-sized battery. I think Apple will be stuck with selling the iPhone for at least another decade.

      1. The new “ThinkUI” from Apple will ensure you can think you want to make a phone call, and bam – the call is made. Apple already has the slogan ready – Think Different.

  5. I think about equal to Watch or AirPods, during the next ten years. Glasses will be an extension of the iPhone user experience, and they will leverage the processing and connectivity capabilities of iPhone. Glasses will not be a standalone product, just as Watch is not. Not everyone wants to wear glasses. 20 years down the road, who knows. In 20 years, calling a product a “phone” will likely seem quaint, and Apple will have something different.

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