“Apple Inc., seeking a breakthrough product to succeed the iPhone, aims to have technology ready for an augmented-reality headset in 2019 and could ship a product as early as 2020.”
That’s the opening to a Bloomberg Technology article that appeared on Wednesday courtesy of Mark Gurman.
Gurman, for those who don’t know, is an incredibly reliable source for Apple leaks. He built his reputation early on as the “scoop machine” writing for a blog called 9to5Mac.
In 2012, when Gurman was still just a teenager in high school, he managed to obtain a photo of stolen iPhone 5 enclosures four months before the phone’s official reveal. He then leaked that information on the 9to5Mac blog, putting his name in the spotlight.
Since then, Gurman has broken numerous stories on the iPad, Siri, the iPhone 8, and a slew of other Apple developments, solidifying his reliability and earning himself a full-time position at Bloomberg.
Gurman has been so successful at exposing Apple’s highly secretive product information, in fact, that the company has reportedly put a team of former NSA, Secret Service, and FBI agents on his tail.
These guys are said to be part of an elite investigation unit within Apple’s Global Security team called New Product Security. The team even comes with the cool, authoritative acronym: NPS. That might sound crazy that a corporation has its own investigative unit, but it’s true.
The point, though, is that when Gurman leaks something about Apple, it is rarely a matter of speculation. He has had contacts within the company for years and, despite Apple’s best efforts to stop him, still sports the track record to back up what he says.
That’s why when Gurman tells us that Apple is aiming to launch a standalone augmented reality headset to succeed the iPhone, your ears should perk up as an investor.
Of course, 2019 is still two years away, and the 2020 shipment date is even further, but investment opportunities will pop up well before Apple’s augmented reality glasses hit store shelves — that I can guarantee. If you want to be on top of this development early on, now is the time to start paying attention.
Here’s what Gurman had to say about Apple’s secret device in his Bloomberg piece:
Unlike the current generation of virtual reality headsets that use a smartphone as the engine and screen, Apple’s device will have its own display and run on a new chip and operating system, according to people familiar with the situation. The development timeline is very aggressive…
The company began putting together a team to work on AR-related projects a couple of years ago… Led by Mike Rockwell, who previously ran engineering at Dolby Labs, the group has now grown to several hundred engineers from across Apple, the people said. Scattered across office parks in both Cupertino and Sunnyvale, California, the team is working on several hardware and software projects under the umbrella code name of ‘T288’…
Apple hasn’t finalized how users will control the headset and launch apps, but is investigating touch panels, voice-activation via Siri and head gestures. Engineers are prototyping a range of applications, from mapping and texting to more advanced features including virtual meeting rooms and 360-degree video playback. The company has discussed pairing the headset with its own version of the App Store, where users would be able to download content, just as they do with the iPhone, Watch, Apple TV and Mac.
The importance of these details will become more apparent over time, but I encourage anyone who’s serious about investing in this device as early as possible to take note of the bolded statement emphasized above because it tells us something very important:
Apple’s augmented reality device is going to have its own display, SoC (system on a chip), and operating system. In other words, this is not a half-hearted attempt at virtual/augmented reality like Samsung’s VR Gear or Google’s Daydream; it’s going to be a standalone device, just like the iPhone or Apple Watch.
If you caught my editorial last weekend, this is probably starting to sound a little familiar because we were on top of this story even before the notorious “scoop machine,” Mark Gurman, was.
Our sources are different than Gurman’s, but we effectively came to the same conclusion. Here’s part of what I shared last week, a few days before the Bloomberg piece was published:
[The iPhone] has been a groundbreaking success for Apple, but Tim Cook and company are already looking to new horizons. They’re looking at new technologies that have the potential of making the iPhone completely obsolete.
This may seem like a crazy business decision to some, but that doesn’t matter to Cook. Apple is going to cannibalize its own leading product because what comes next is going to be something even bigger and better.
Apple is currently keeping this initiative secret, giving it the code name “Project Iris.” Employees are signing nondisclosure agreements as they build the world’s first pair of smartglasses aimed at the consumer market.
“Project Iris,” otherwise known as “Project Mirrorshades,” is happening right now. This very moment, a team of engineers is building a pair of augmented reality glasses for Apple.
T288, Mirrorshades, Iris… At the end of the day, it doesn’t matter what you call it. The fact is, Apple is aggressively working to produce a standalone augmented reality device to sell to the consumer market within the next few years.
You heard it from us first. Now you’re hearing it from Bloomberg. The question, of course, is what you can do about it as an investor.
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If you’re betting on Apple knocking this out of the park, as many experts believe the company will, you can obviously buy some of the company’s stock. Apple may be trading at a higher premium than it has for years, but it’s not egregiously priced, and speculation surrounding a smartglasses launch would likely propel the stock higher leading up to the tentative 2020 launch.
Gene Munster, a former sell-side analyst with Piper Jaffray, believes Apple deserves a trillion-dollar valuation because of its position in augmented reality. Financial analysts Brian White and Amit Daryanani have also indicated AR could help crown Apple as the first $1 trillion company.
But Apple is already the world’s largest corporation with an $887.2 billion market cap, which means investors are only looking at about a 13% bump to get there. Don’t get me wrong, that’d be a respectable return, but it’s not the kind of blockbuster multiple presenting itself from under the hood.
Instead, it will be investors who correctly identify the component suppliers of Apple’s new device who have the best chance at profiting big from Apple’s standalone augmented reality headset. Keep in mind this is going to be a new device that will require new components that are not yet in high demand today.
We’ve been tracking this story longer and more closely than any other financial publication, and as part of that coverage we’ve already identified a supplier for Apple’s early prototypes.
This is a high-risk speculative venture, but the potential reward is substantial enough that only a fool would ignore it.
Until next time,
Jason Stutman
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