Apple revealed the features of its plans for the world of metaverse, as its CEO Tim Cook announced the expansion of the company’s applications for augmented reality, which was positively answered by investors.
The world’s largest company by market capitalization has 14,000 AR apps on its App Store, and Cook suggested that number would rise with more investment.
“We see a lot of potential in this area and are investing accordingly,” Cook said, when asked about Apple’s plans for metaverses, a broad term that generally refers to shared virtual world environments that people can access online.
And Apple analyst, Ming Chi Kuo and Bloomberg, talked about the company’s plans to introduce a headset for augmented reality applications this year or next, with glasses used in this regard to follow later. Apple has yet to publicly acknowledge these plans.
Cook’s comments on Thursday as well as better-than-expected quarterly earnings and sales helped lift Apple shares nearly 5% in after-hours trading.
Apple services revenue jumped 24 percent to $19.5 billion in the fourth quarter of 2021, which was marked by the holiday season, topping analysts’ estimates of $18.6 billion.
The magic lies in the overlap
The number of subscribers to the company’s paid services, such as streaming music and online games, reached 785 million in the fourth quarter of 2021, up from 620 million a year ago and 745 million in the third quarter.
On the other hand, Cook said the company’s research and development efforts are focused on the intersection of hardware, software and services.
“This is where the magic really comes in… There is a huge amount of investment in things that are not in the market at this point,” he added.
The expansion of augmented reality will open the door to increased subscriptions. Existing offerings of fitness training and graphic content can become even more attractive through augmented reality experiences.
With the growth of services and subscribers, Apple’s gross profit margins jumped more than 40%.
Analyst Neil Shah of Counterpoint Research said metaverse-related services, such as augmented reality apps, could change Apple’s revenue map.
“There is a significant increase in Apple’s services activity that will likely outpace its iPhone in the next five years,” he added.
And the services and applications sector, which is the second largest sector in Apple currently, after the iPhone. Apple’s market value exceeded three trillion dollars at the beginning of this year.
