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Apple Inc. revealed its metaverse ambitions on Thursday, with CEO Tim Cook implying the extension of the company’s augmented reality apps, eliciting a significant reaction from investors.
The App Store already contains 14,000 augmented reality apps, and Cook implied that figure might expand with fresh investments.
“We see a lot of potential in this field, and we’re spending accordingly,” Cook said when asked about his intentions for the metaverse. Which is a general term for shared virtual environments that users can access through the Internet.
According to Apple analyst Ming-Chi Kuo and Bloomberg, Apple aims to release an AR headset this year or next, with glasses following later. Apple has yet to make these plans public.
Cook’s remarks Thursday’s gains, combined with better-than-expected quarterly results and sales, pushed Apple stock up about 5% in after-hours trading.
Apple’s services revenue increased by 24 percent to $19.5 billion in the most recent quarter. Thus, exceeding analysts’ expectations of $18.6 billion. The business added 785 million users to its few premium services compared to 620 million a year ago and 745 million in the previous quarter. It is including as music streaming and games.
Separately, Cook stated on Thursday that Apple’s R&D efforts are focused on the confluence of hardware, software, and services.
“That’s where the true magic happens,” Cook explained. “There’s a lot of money going towards things that aren’t on the market right now.”
An augmented reality device could provide numerous opportunities to promote subscriptions. Existing fitness regimens and video content offerings could be enhanced with immersive AR experiences.
Analysts have praised Apple’s gross profit margins, which have reached 40% as services and subscribers have risen.
According to Counterpoint Research analyst Neil Shah, Metaverse-related services such as augmented reality apps have the potential to transform Apple’s income mix.
“Over the next five years, Apple’s services business should surpass the iPhone,” Shah predicted.