Does VR News Buy Apple Stock for 2023?

apple (AAPL -0.47%) 2023 could be an epic year. To kick things off, it has already announced its new M2 Pro and M2 Max chips for its ever-popular MacBook laptop lineup, as well as the reintroduced HomePod smart home speaker. . And, of course, an iPhone 15 is definitely coming in the second half of this year.

But the biggest item in the rumor mill that could really launch Apple high is an augmented and virtual reality (AR/VR, or simply “MR” for mixed reality) headset. Is Apple Stock to Buy in 2023 Ahead of This Potentially Game-Changing News?

An Apple MR headset: the long-awaited next big hit?

Apple has reportedly been working on a mixed reality headset for some time now, but now speculation is rife that the company will host an official release event this spring. Backing up the authenticity of the rumor last year, CEO Tim Cook talked about the problems with the “Metaverse,” possibly a marketing ploy to undercut existing headsets on the market — Obviously from the parent of rival Facebook Meta platforms‘ Quest 2 and Quest Pro.

An Apple MR headset will apparently be able to toggle between a real-world view with a digital overlay and a fully immersive virtual experience, including using the headset as a display for the user’s Mac or MacBook. And, as might be expected from Apple, a headset will go beyond integrating with other Apple hardware. The company is also apparently working with media companies. Disney to bring 3D experiences to the MR device, and the Apple TV is also reportedly getting some upgrades to support a more immersive viewing experience.

It’s clear why Apple is talking about AR/VR, the metaverse, Web3, or whatever “next-generation” computing experience you might want to apply here. The tech community is already immersed in digital workflows, so there is real-world value in making that work more intuitive and efficient. Kids these days also love to binge watch TV and play video games, so why not make it even more appealing?

Apple also needs a new hit if it wants to grow at a faster pace. After all, there’s only so much profit that can be squeezed from its current moneymaker, the iPhone, by designing new chips for it and the MacBook lineup. At some point, investors will start demanding a new shot in the arm to keep the growth engine going, and MR may be just the right medicine.

Data source: Apple.

Problems before the race starts?

Getting a project as ambitious as the MR headset ready for race day isn’t easy, though. Apple has been working on augmented and virtual reality tech for years (the Meta, to its unfair detriment, has been reviled for its transparency about how much it would cost to launch a new computing device ecosystem Is). All his efforts will not bear fruit. Apple has reportedly shelved its AR glasses project to focus its efforts on a cheaper follow-up headset that will (hopefully) be announced this spring.

That’s probably a good move, as reports suggest that the first-generation Apple MR headset could cost as much as $3,000. That would be prohibitively expensive for mass adoption — especially when the MetaQuest 2 can be had for a few hundred bucks, and the MetaQuest Pro MR headset costs $1,500.

Even so, Apple already has a vast ecosystem of fans using iPhones, MacBooks, watches, and more. If any of these users are interested in MR, there’s a good chance they’ll take a look at Apple’s new products. I expect an Apple MR device to start small, but it could build a consistently profitable business in a few years through headset sales and related services and software costs.

Is Apple Stock a Buy for 2023?

If you thought Apple stock was a buy a few months ago after the company reported its last fiscal year 2022 earnings, the business hasn’t changed much since then. The iPhone is still hot, especially in new emerging markets. The Mac could have a great year if it can eat up some of the market share driven by struggling laptops. Intel And AMD. And iPads and wearable devices like the Watch can continue to achieve solid results. Apple is also extremely profitable and is returning excess cash through stock buybacks. A new mixed reality device in 2023 will be Gravy.

What has changed in recent months? Due to the bear market, the value of the shares has become much more reasonable. As of this writing, Apple now trades at 22 times trailing 12-month earnings, and 21 times trailing 12-month free cash flow. Stay tuned for updates in early February following the first quarter fiscal 2023 financial update. But at this point, it’s still absolutely a wonderful business to build a portfolio on. Apple stock is a buy in my book.