Don’t Count On Apple’s New Headset To Move The Needle For The Stock

AppleAAPL
is widely expected to launch its mixed-reality headset shortly, potentially as early as the beginning of June, when the company holds its annual worldwide developer conference. The headset would be Apple’s first all-new product line since the Apple Watch and the potential launch comes at a time when Apple’s bread and butter smartphone and computing product businesses face a slowdown, with Covid-19 tailwinds easing. So will the new device move the needle for Apple stock? We don’t think it will, for a couple of reasons.

While Apple is known for disrupting product categories with highly refined products with great software and design, the new headset appears to be entering a much more nascent market. Smartphone sales were rising and use cases were clear when Apple got into the game in 2007 with a highly refined product. Similarly, the templates for tablets were largely set when Apple launched iPad in 2010. However, the mixed-reality headset appears like a bit more of a speculative bet. While Apple’s products are typically sleek, with high-end industrial design, the headset could be more utilitarian and could resemble a pair of goggles connected to an external battery pack, per the Wall Street Journal. The device is expected to combine virtual reality – used for games and experiences – with augmented reality, which overlays digital information in the real world potentially using cameras. Apple would need to educate consumers on what the device is really for. Companies such as Facebook have invested considerable sums into this space thus far with little success. Worldwide shipments of VR headsets and augmented reality devices actually declined by over 12% year over year to 9.6 million in 2022, per data from analyst firm CCS Insight. Apple’s device is also initially going to be expensive, with reports pointing to a price tag of roughly $3,000, indicating that it will likely focus on a…