Apple teases metaverse plans, stock jumps

accreditation
0:00
play article
Subscribers can listen to this article
Apple's store and logo seen in Hong Kong. (Photo by Miguel Candela/SOPA Images/LightRocket via Getty Images)
Apple's store and logo seen in Hong Kong. (Photo by Miguel Candela/SOPA Images/LightRocket via Getty Images)

Apple teased its metaverse ambitions on Thursday as CEO Tim Cook talked expansion of the company's augmented reality apps, prompting strong investor response.

The company has 14 000 AR apps on its App Store, and Cook suggested this number will rise with further investment.

"We see a lot of potential in this space and are investing accordingly," said Cook, in response to a question about its plans for the metaverse, a broad term that generally refers to shared virtual world environments that people can access via the internet.

Apple analyst Ming-Chi Kuo and Bloomberg have reported Apple plans to introduce an AR headset by this or next year with glasses to follow later. Apple has not yet publicly acknowledged these plans.

Cook's comments on Thursday, and quarterly profit and sales topping estimates, helped drive Apple stock up nearly 5% in after-hours trade.

Apple's services revenue jumped by 24% to $19.5 billion in the just-ended holiday quarter, topping analysts' estimates of $18.6 billion. The company added 785 million subscribers to its handful of paid services such as for streaming music and playing games, an increase from 620 million a year ago and 745 million last quarter.

Cook separately on Thursday said that Apple's research and development efforts are focused on the intersection of hardware, software and services.

"That's where the magic really happens," Cook said. "There's quite a bit of investment going into things that are not on the market at this point."

An AR device could open many opportunities to grow subscriptions. Existing offerings for fitness workouts and video content could grow more attractive through immersive AR experiences.

And as the services and subscribers have grown, Apple's gross profit margins have jumped above 40%, drawing praise from analysts.

Metaverse-related services, such as AR apps, could flip Apple's revenue mix, said analyst Neil Shah of Counterpoint Research.

"There is a significant upside to Apple’s services business potentially crossing its iPhone in the next five years," Shah said.

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For 14 free days, you can have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today. Thereafter you will be billed R75 per month. You can cancel anytime and if you cancel within 14 days you won't be billed. 
Subscribe to News24
Rand - Dollar
15.77
+0.7%
Rand - Pound
19.69
+0.5%
Rand - Euro
16.65
+0.5%
Rand - Aus dollar
11.10
+0.6%
Rand - Yen
0.12
+0.5%
Gold
1,846.66
0.0%
Silver
21.76
0.0%
Palladium
1,970.00
0.0%
Platinum
958.50
0.0%
Brent-ruolie
112.55
+0.5%
Top 40
61,000
-1.2%
All Share
67,575
-1.0%
Resource 10
72,529
+1.6%
Industrial 25
72,948
-3.9%
Financial 15
15,746
+0.1%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot