Apple stock is approaching record-high territory ahead of the company's annual Worldwide Developers Conference, known as WWDC, as eager investors anticipate the rumored introduction of Apple's mixed-reality headset.
Apple will show off its latest hardware and software innovations in a keynote presentation Monday at its headquarters in Cupertino, Calif. The event starts at 10 a.m. Pacific time and will be webcast.
At the presentation, Apple will detail the latest operating systems for the iPhone, iPad, Mac, Apple TV and Apple Watch. But attendees and online viewers will be most interested in the company's computer headset, possibly called Reality Pro. It would be the company's first new hardware platform since the Apple Watch debuted in April 2015.
The first-generation headset also reportedly will cost about $3,000, according to media reports.
Headset Could Be Catalyst For Apple Stock
Prospects for the headset are a major question mark for the company among Apple stock analysts.
Further, Apple will need to make a compelling case at WWDC for why consumers will want the pricey gadget, analysts say.
"This first product is likely more about learning vs. driving mass adoption (similar to the Watch)," Evercore ISI analyst Amit Daryanani said in a note to clients. He rates Apple stock as outperform with a price target of 190.
Apple stock ended regular session trading Thursday at 180.09. Apple shares hit their all-time high of 182.94 in January 2022.
Reality Pro Packed With Cutting-Edge Tech
The Reality Pro is said to look like a sleek pair of ski goggles. The headset connects to an external battery pack for about two hours of use. It is said to combine augmented and virtual reality into a single device — something the industry calls mixed reality.
Mixed-reality headsets can play virtual-reality content and also simulate augmented reality using video pass-through to show the real world.
Meanwhile, virtual reality blocks out the real world and immerses people in a totally digital environment for games and videos. Augmented reality overlays digital information on the real world.
Apple's Reality Pro reportedly has a physical dial to switch between virtual reality and real life. The computer eyewear features dual high-definition displays with about a dozen sensors and cameras, according to news leaks. Users will control the device with hand gestures and eye movements.
Apple Stock News: Fall Launch Planned
The Reality Pro headset could hit the market this fall, but the launch might be delayed by production issues, analysts say.
Apple's ultimate goal is to create a lightweight, fashionable pair of smart glasses. But those augmented-reality specs are probably years away. Smart glasses could someday replace smartphones, industry analysts say.
The tech giant is playing a long game with its move into computer headsets, according to Apple stock analyst Gene Munster, managing partner at Deepwater Asset Management.
"Many investors are skeptical about the prospects of the device given headsets are currently a solution looking for a problem," Munster said in a blog post. "I believe the trend of more immersive consumer tech experiences will continue, which should pave the way for a robust headset market."
Apple Hopes To Get Developers On Board
By introducing the headset at WWDC, Apple will encourage software developers to help create killer apps for the device. The headset reportedly runs a new operating system called realityOS or xrOS. XR is an abbreviation for "extended reality," a catchall term for augmented, virtual and mixed reality.
Apple has been working on the computer headset for more than seven years. Further, the consumer electronics giant has sunk billions of dollars into its development.
Meanwhile, Apple hopes to succeed in the market where competitors have failed to gain much traction. Those rivals include HTC, Magic Leap, Meta Platforms, Microsoft and Sony.
"Although we recognize that the AR/VR industry as a whole has generally been disappointing, we believe that Apple's potential AR/VR headset can succeed where others may have not," Goldman Sachs analyst Michael Ng said in a recent note. Also, he rates Apple stock as buy with a price target of 209.
Apple's Advantages In Nascent Market
Apple has advantages over other companies in the computer headset market, Ng said. They include its large developer ecosystem and existing AR content developed for the iPhone and iPad, he said.
But initial uptake for the Reality Pro will be relatively modest, BofA Securities analyst Wamsi Mohan said in a note to clients. He also predicted 200,000 units sold in 2023.
"It's important to recognize that the headset version three years from now will be cheaper, faster and have many more use cases," Mohan said. He cited applications in gaming, entertainment, augmented productivity, fitness, wellness, education, training, health care, shopping, e-commerce and social media.
Mohan has a neutral rating on Apple stock with a price target of 176.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
