What Apple's new Vision Pro AR headset means for augmented reality space and its shares

It’s no surprise that Apple (AAPL:NASDAQ) shares shot to record highs in the hours before the tech giant’s much anticipated launch of its augmented reality headset: Vision Pro AR.

It’s been almost a decade since it unveiled a new toy for devotees to play with and in the middle of a cost-of-living crisis, which is likely to see cash-strapped consumers hanging onto their old handsets and tablets for longer than they might usually, adding something fresh to the mix could create new revenue opportunities.

The $3,499 price tag might have dulled the excitement somewhat, but Apple’s first-generation products have often been aspirational with most consumers watching and waiting until further incarnations bring the price to attainable levels.

Why this product? And what could it mean for other companies which already have augmented reality headsets in the field with much smaller price tags attached?

Looking back at impact of product launches on the share price, it’s clear investors are seeing through these big announcements and considering future growth and future models.

INSERT CHART

Apple share price growth since the launch of the first iPhone

Source: Refinitiv

Unmasking the mask

The big question is: why this product? And what could it mean for other companies which already have augmented reality headsets in the field with much smaller price tags attached?

The headset market has been struggling to find an audience with sales down 54% in 2022 according to figures from the International Data Corporation.

And the headset unveiled by Apple does not necessarily look like a sexy must-have piece of tech, in fact, it looks more like last year’s ski goggles.

With all the excitement bubbling through markets about the potential of AI, Apple’s new take on what for many feels like an old concept was broadly shrugged off by investors.

But very few people have had the opportunity to test out the capabilities of this new bit of hardware and if history has taught investors anything it’s that Apple’s brand of magic works in mysterious ways.

Two decades ago, Blackberry was the smartphone of choice for most business professionals, but Apple pushed the boundaries, adding in a camera, a torch, sat nav and access to the world from inside your pocket.

It helped spawn sectors like ride-hailing and pushed competitors to up their game or disappear entirely (Blackberry ceased trading in 2016).

Apple’s take feels more grown up somehow and there is a sense that we might be on the cusp of another tech revolution

And Apple boss Tim Cook clearly understands there is a long and winding road from launching a product on an uncertain public to mass consumption, telling the audience at tech’s biggest global event ‘this is just the beginning’.

New life for the Metaverse?

Perhaps many of us just can’t grasp the concept, though when you think about concert goers watching a band that they’ve paid through the nose to see in person but viewing the whole thing through their tiny phone screen, sticking on a pair of goggles is not actually a world away from the now.

A new way to watch movies, relive photographed memories and generally interact with all those apps we use on a day-to-day basis feels like a tangible thing, unlike Mark Zuckerberg’s ramblings about the metaverse.

Meta Platform’s (META:NASDAQ) pitch has until now not quite struck a chord with investors who often, like me, have to ask their kids for an explanation of what has just been proposed.

A more grown-up approach

Apple’s take feels more grown up somehow and there is a sense that we might be on the cusp of another tech revolution and one that the fruity company is well positioned to dominate.

It has already got the streaming service, the gaming service and a loyal customer base weaned on its operating system. What it doesn’t appear to have right now is a gadget we all need to run out and buy.

Could Apple’s new toy render its old ones obsolete? In the future VR headsets could replace TVs, gaming consoles, laptops, tablets and even our phones.

Does that even matter if the product we’re replacing them with comes from the same stable?

What all the headlines and excitement has done is make us question the possible implications and potential uses of the kind of tech many of us had thought was only for hardcore gamers and kids.

Markets are forward looking, investors are always trying to spot trends, to jump on the next big thing before it becomes the next big thing. So, there will be plenty of interest in whether this launch could be an opportunity for more companies than just Apple and act as a coming of age for the wider augmented reality space.

Past performance is not a guide to future performance and some investments need to be held for the long term.