Apple Inc. (AAPL) Careens Closer to Major AR Announcement

If AR turns out to be the next big thing, AAPL stock could be on the forefront

Source: Nantic

Apple Inc. (NASDAQ:AAPL) CEO Tim Cook has been talking an awful lot lately about augmented reality — or AR. The latest episode was last week, when he compared the technology to the iPhone in terms of its potential to be big.

Apple Inc. (AAPL) Careens Closer to Major AR Announcement
Source: Nantic

After months of repeatedly playing up AR in public, it’s beginning to feel as if Cook is setting the expectations of the press and public about the technology.

That begs the question: Is Apple Inc. planning a major augmented reality announcement?

AR vs. VR: What’s the Difference?

Augmented reality is related to virtual reality — or VR — but the two are also very different.

Virtual reality uses technology to completely immerse people in a virtual world. This requires powerful computing hardware and special headgear. VR has spent several years as the next big thing, culminating with Facebook Inc (NASDAQ:FB) buying VR pioneer Oculus for $2 billion in 2014.

Virtual reality hasn’t quite caught on in a big way — the expensive and awkward equipment is a big hurdle to overcome — but gamers have begun embracing it.

So far, Apple has shown no interest in virtual reality and Tim Cook has actually made a point in several interviews of downplaying VR. In the latest, when Cook spoke to The Independent, he laments the fact that virtual reality “closes the world out.”

“Most people don’t want to lock themselves out from the world for a long period of time and today you can’t do that because you get sick from it.”

The antisocial aspects of virtual reality, the equipment requirements and side effects such as motion sickness have been common themes in Cook’s argument against virtual reality.

However, he is very excited by augmented reality and its ability to go mainstream. Instead of locking a person into a virtual world, AR overlays the existing world with additional information. One of the most popular examples of AR in action is the game Pokemon Go, released last summer. That game was the most downloaded app of 2016 on Apple Inc.’s App Store.

Is Apple Inc. Planning a Major AR Announcement?

Tim Cook’s views on augmented reality seem to have been getting more positive in the past few months, reaching the point where he’s actively hyping the technology. In October, he said:

“I do think that a significant portion of the population of developed countries, and eventually all countries, will have AR experiences every day, almost like eating three meals a day. It will become that much a part of you.”

And last week, he told The Independent:

“I regard it as a big idea like the smartphone. The smartphone is for everyone, we don’t have to think the iPhone is about a certain demographic, or country or vertical market: it’s for everyone. I think AR is that big, it’s huge.”

What’s holding AR back is the technology.

Hardware doesn’t need to be as powerful as the silicon needed to drive virtual reality gear. And rather than a fully enclosed headpiece or goggles — that themselves are so complex they can cost $600 on top of the PC needed to drive them — augmented reality can be delivered through specialized eyeglasses or on a smartphone’s display. The problem is current efforts haven’t been quite good enough.

Alphabet Inc’s (NASDAQ:GOOG, NASDAQ:GOOGL) failed Google Glass is the best-known example of the AR overlay glasses model, while Pokemon Go shows the relatively primitive AR experience that current smartphones can deliver.

What if Tim Cook has been playing up augmented reality (and dissing VR) because Apple Inc. is preparing to make a major push into AR? It could be the company that takes augmented reality mainstream by nailing the hardware, while everyone else is distracted by trying to get consumers to buy into VR.

There has been speculation that Apple is working with German optics firm Carl Zeiss AG on Apple-branded AR glasses. The iPhone 8 could also incorporate next generation hardware — from cameras to CPU and GPU — that are optimized to make AR a killer feature.

We’ll have to wait until the company is ready to show its hand to know exactly what is up. But based on Tim Cook’s continued promotion of the technology, it seems likely that Apple Inc. is priming us for AR-related announcement.

And if Cook is even close to being right about augmented reality having the potential to be as big as the iPhone, the upside for Apple stock could be huge.

As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2017/02/apple-inc-closer-to-major-ar-announcement/.

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