Alright.
So during recent announcements from tech giants,
meta and Microsoft about their augmented and virtual reality
tech analysts are increasingly bullish about the prospect of Apple
entering the market.
And there have been plenty of rumors about
when the company could release its VR headset
partially squashed today though, according to reports saying Apple might
delay its debut until later this year as it works out challenges like
overheating camera tech and more so when could Apple finally enter the market?
And what will this ultimately mean for its
stock price and investors joining us now is
Doug a stroke managing partner at exponential investment partners
and Doug we haven't heard anything definitive from Apple beyond Ceo tim
cook once saying that extended reality which is kind of like a our
tech would be an important part of the company's future.
So speculation continues to swirl.
If Apple has to delay its headset, could this potentially chill the market a bit?
Yeah, well, thanks for having me ken. Um yeah, it is speculation at this point.
We've got to remember that Apple hasn't really
made any formal comments on any of this.
So it is speculation and I guess I just wanted to
take a quick step back before we got into the VR world
and just look at Apple right now.
I mean, this is one of the best tech companies in the world,
They're flirting with a $3 trillion dollar market cap.
They have a 4% cash flow yield.
If you take this year's earnings, they generate an astounding 56% return on capital
And 32% operating margin and they have three quarters
of a billion subscribers to their various services.
So just looking at Apple today,
this is one of the greatest buys in the stock market and kind of a must own.
And I think you've got to focus really on that first and then looking
ahead at what they might be able to accomplish in VR and the metaverse.
I mean,
clearly they're going to have a very important seat at the table
in that world because they have this loyal customer base that's uh,
massive and very happy and loves to use
their products and services and their captive.
So I think anything that happens, Apple is going to play a big part,
but we've got to watch out for these stumbles that
are going to occur like this rumor going around today that
they're going to delay the VR headset till next year or late this year.
It's gonna take a long time for this stuff to really become a real, a real story.
And we can't really predict with a great deal of certainty how it's gonna play out.
But I'm confident that Apple is going to be a big player and do very well in that,
in any scenario that unfolds.
So let me ask you something, since we're just talking figuratively
in, in this aspect, let's say Apple does work out,
it's tech issues with the headset and does roll it out sooner than later.
Okay,
analysts have been raising their price,
targets pricing in the opportunity this tech presents.
So what does this mean for investors?
I think that the virtual reality and the metaverse is actually
just gravy on top of apples already existing phenomenal business.
And I think
the story just as as if you take Apple as it stands now is phenomenal
and if you layer on some of these other developments down the road,
it becomes even better.
But it really doesn't need any of those two to come to fruition anytime soon
to justify where it's trading and and the appeal of its stock because it is,
it's about as good of a company as you can find in the world in any industry.
It's it's really phenomenal.
So, uh
go ahead, go ahead.
Well, and and you know, the metaverse is a bit of a,
it's an ephemeral concept.
It harkens back to science fiction films like the Matrix and Minority Report,
where you know,
we don't really know if that stuff is going to
become real anytime soon or what it's gonna look like.
Um it's a it's a bit of a pipe dream right now.
Let me ask you when it comes to
the release of an A. R. V. R.
Headset from Apple,
what do you think it would do to the competition such as meta or Microsoft?
Do you think you'll see those stocks just plummet because Apple just
has such a huge grasp and they do things so well,
when it comes to introducing
new ish hardware that these other companies won't be able to keep up.
Yeah, yeah, I think on the hardware side they're they're the leader,
the clear leader
and they, they've got such great expertise and hardware, software services,
customer relationships.
So I think Apple will,
will be a clear leader in anything that transpires and there probably will be just a
few winners in this universe and some companies won't quite be able to pull it off.
But I think Apple is definitely going to be one of the top top players in,
in any development and technology to be honest,
because they've, they've got such great skills and abilities
that they've already proven that they can transfer into future developments.
My last question for you really quick, since we're in the rumor mill,
there's been rumors about Apple developing its own electric vehicle.
If they did want to compete with companies like Tessa or, and legacy automakers,
or would it be something that would take Apple
a huge uphill climb to get into the market
at least respectfully.
Yeah,
it does seem like it would be kind of a
big undertaking for them to actually build a car.
Um, and they've been reluctant so far to do that and I don't blame them because
it's a whole another business in a way that,
and Tesla has got such an advantage on everybody,
but on the flip side,
you know, in, in, in a handful of years here,
We're only gonna have electric vehicles in 10 years or so. I mean,
that's definitely where the future is headed and
everyone is going to be making these cars.
So
I, I kind of envisioned Apple more on the software side,
like with their carplay interface that they introduced, or maybe could,
could get involved on the battery side or, you know, I,
I don't really see them making a car from, from A to Z and, and actually
taking on that kind of capital expenditures and,
and expertise and there's really no need for them.
They can they can be involved in the,
the ecosystem in different ways that that won't require as much risk.
Alright, I like your thinking. Doug.
He's a managing partner at Exponential Investment Partners.
Doug, thank you so much for being with us on the show this morning,
and I'll let you know if I get those goggles that they ever come