Apple’s Next Blockbuster Opportunity Is Not What You Might Think (AAPL)

Apple’s ARKit has changed the way we see the world, making lives more exciting and industries even more advanced with augmented reality. Now, there’s news that Apple’s coming up with amazing AR powered smart glasses!

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What do you do when you feel bored with the world at times?

The answer in most cases I guess would be to let our imagination run wild!

Even as we’re just sitting on an old bench while waiting for a bus or for the rain to stop, we can lift our mood by setting our imagination in motion!

We can imagine a dragon suddenly appearing in the sky, swooping down towards where we’re sitting to take us for an adventurous flight over the city and a secret kingdom that lies beyond.

We can imagine raindrops like snowflakes or magical pixie dust which makes everyone and everything around us float!

Now, you can have even more exciting times playing around with your imagination — and that’s with the help of augmented reality (AR), a technology that integrates virtual images and information with a user’s real-world surroundings! Meaning, you no longer have to pretend seeing things that you’d like to see or happen, you can just mix those exciting elements with the real world through AR.

“I’m excited about Augmented Reality because unlike Virtual Reality which closes the world out, AR allows individuals to be present in the world but hopefully allows an improvement on what’s happening presently.” That’s Apple CEO Tim Cook discussing the potentials of AR with David Phelan of Independent earlier this year.

“Most people don’t want to lock themselves out from the world for a long period of time and today you can’t do that because you get sick from it. With AR you can, not be engrossed in something, but have it be a part of your world, of your conversation. That has resonance.”

Resonance, right.  It makes the things we imagine more meaningful, impactful, and lasting.

Imagine using AR when you tell your kids bedtime stories. You can almost picture them giggling with ultimate delight.

How about that video game you love? You can now actually play it around the house, making your favorite characters appear right in the living room and join you in your quest for loots.

Apple’s (NASDAQ:AAPL) ARKit, which according to Gene Munster, a former top AAPL analyst, is something that is “a light year ahead of everything else that’s out there,” has taken the world by storm, with many developers showing all the amazing things that could be done with it on You Tube and other popular social channels. It’s won over Google’s Tango which has ARKit’s capabilities but requires Qualcomm’s powerful Snapdragon 835 processor for anyone to be able to use it.

And AR has more than entertainment potentials, it’s also useful in many industrial applications like education, architecture, medicine, media broadcast, and even archaeology.

In architecture, AR is a great help in visualizing building projects. You can superimpose computer-generated images into a real location before the construction of a physical structure. It can also provide architects with animated 3D visualizations of their work.

In the field of education, AR can make learning more interesting and impactful by sparking a higher level of enthusiasm among students as it augments standard curriculum. It can lend visualization to history lessons, scientific discoveries, mathematics, and other subjects.

AR has likewise enabled archaeologists to come up with site configurations from surviving structures through computer-generated image augmentation.

On television, the new technology has made weather forecasting more vivid and appealing. Interactive TV has also been made more exciting through augmented reality.

It’s no wonder that everyone is looking forward to more AR surprises from Apple! Tim Cook’s statements have sparked greater enthusiasm from people of various walks of life.

And now, rumor has it that Apple is coming up with AR powered smart glasses! After ARKit’s success, it’s easier to imagine how this product will make a difference in our everyday life. Now it won’t even be boring to wait for someone who’s a habitual late-comer. With Apple smart glasses, you’ll be enjoying yourself as if you’re star in a movie, a director of a great symphonic orchestra, or more importantly, a greener and more peaceful world could at last, be within reach!

As for Apple, expect them to reap as much financial rewards the way their iPhone and iPad did before.

According to Bernstein’s Tony Sacconaghi, whose statement appeared on Barron’s Asia, “Smartglasses could potentially generate tens of billions of dollars in annual hardware sales for Apple. Comparing it to Apple’s last blockbuster product launch, the iPad, we believe that smartglasses could have just as wide (if not wider) appeal over time. Assuming a $500 ASP23 and an annual adoption rate of 2% in Year 1, ramping up to 5% by Year 3, we estimate that Apple smartglasses could generate over ~$25B in annual hardware sales within 3 years of release, with minimal cannibalization of other Apple products. Apple would subsequently take a majority of profits within the resulting market for smartglasses, just as the iPhone, iPad, and Apple Watch have done so in their own respective markets.”

Yes, always expect Apple to lead a tech revolution!

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