Longtime Apple analyst Gene Munster believes the trend of more immersive consumer tech experiences will continue to grow in popularity, paving the way for a robust headset market. By 2030, Munster estimates that the wearables/glasses segment could account for 10% of Apple’s sales (assuming they don’t release a car), a business similar in size to Apple’s Mac and iPad businesses today.
Gene Munster for Deepwater Asset Management:
The reason why Apple is picking WWDC as the MR headset’s preview point is the importance of winning developers. History suggests when there is a hardware paradigm shift, winning developers is critical…
Apple gets it. There is likely going to be a shift away from phones over the next decade, and that shift will include more wearables. If Apple waits for the utility of these wearables to become apparent to the masses, it could be too late. By that time Meta, Google, or Microsoft would already have made enough hardware and software progress that will make it difficult for Apple to gain traction. iPhone’s hardware was the most advanced on the market in 2007, and developers jumped on board. Now is the time for Apple to win developers over with a best-in-class device. If they do that, developers will jump in and build products that unearth the utility of the device, and the virtuous product/developer cycle begins once again…
If the headset is a bust, the product would add fractional revenue, and the $25B in expenses related to development and marketing over the next five years, would only have a modest 3-4% negative impact on earnings.
[If] it’s a hit… the headset/AR glasses segment would account for about 10% of total Apple sales in 2030. This compares to both the Watch and AirPod businesses which each account for about 5% of sales today.
Putting it together the wearable segment will be more critical to Apple’s business than the Watch or AirPods, and less important than the iPhone. My thoughts on the iPhone’s place in Apple’s product lineup have changed since I started writing on Apple wearables in 2017. At the time I saw the headset as a replacement for the phone. Now I expect the wearable to be complementary to the iPhone long term.
MacDailyNews Take: There are uses and applications for a high-quality AR/VR headset that’s ensconced in the rich Apple ecosystem (macOS, iOS, iPadOS, tvOS, watchOS) that nobody, including Apple employees, have yet imagined.
Earlier this month, our Little birdie told us that one selling point of Apple’s mixed-reality headset that has been imagined will be the ability to attend live and recorded concerts remotely. Buy a ticket, for significantly less than in-person, and the headset will “as much as possible, be like being there – with extras like changing seat positions.” Apple’s launch last week of new concert discovery and set lists features on Apple Maps and Apple Music lays part of the foundation.
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