Apple's entry into the AR headset space may prove significant in the long term. (UBS)
The Vision Pro marks Apple's first foray into an augmented-reality (AR) headset market that has so far struggled to gain mass market appeal. At USD 3,499, the Apple device costs triple Meta's next-gen headset—but comes with more advanced processing chips, 4K OLED screens, and dozens of cameras and sensors. In its launch event, Apple said it is working with Microsoft, Disney, Unity, and others to bring new apps and experiences to the device. This marks Apple's first major new product category entry since its watch was launched in 2015.
Our view: Without taking any single company views, we see several investment implications. First, while there are a number of likely supply chain beneficiaries in areas like OLED, sensor, and lens production, the high per unit cost and late launch timeframe suggest both limited volumes and a delayed revenue impact. Second, Asia semi valuations are already stretched on AI-related inflows, so investors should not expect significant near-term upside on AR headlines after the recent gains. Third, Apple's entry may prove significant in the long term, leading to higher overall investment across infrastructure, platforms, and enabling technologies for the Metaverse. Globally, we remain least preferred on US tech, and suggest investors consider thematic tech exposure to areas like tech self-help.
For more, see our long term investment theme on the Metaverse and read the original report US Daily—Macro hedge funds —a steady ship in stormier seas? 6 June 2023.
This content is a product of the UBS Chief Investment Office.
