Apple may not have invented the metaverse, but investors are betting that the company’s knack for cashing in on new technologies will make it a major player in the digital universe.
Earlier this month, Apple became the first company with a market cap above $3 trillion during intraday trading. The boost came from investors’ confidence that, later this year, the company will debut technologies that will allow customers to inhabit the metaverse and will create a new profit center for Apple.
Meta, the company formerly known as Facebook, invented the metaverse and has seen its share price climb 6.7 percent since late October when Facebook changed its name.
In comparison, Apple’s shares are up 18 percent in value during the same period.
“In conversations with augmented-reality and virtual-reality companies, the consensus view is that the real catalyst for mass-market adoption will come when Apple enters the market,” Katy Huberty, Morgan Stanley’s Apple analyst, wrote last month in a note to clients.
Several analysts have set a $200 price target for Apple shares, which closed at $173.07 on 17 January.
Fearing Apple’s market clout in the new digital realm, Epic Games, which makes the popular “Fortnite” game, sued Apple last summer, claiming it held an improper monopoly on distributing software through its iPhone online store.
In September, a judge ruled largely in Apple’s favor but said the company could no longer forbid software designers from telling customers inside their apps about payment alternatives to Apple’s in-app purchasing system, which can claim as much as 30 percent of designers’ revenue.
Apple won a stay of the order, allowing it to continue business as usual for the foreseeable future.
TREND FORECAST: As we noted in “More Companies Create, Inhabit Virtual Worlds” (7 Dec 2021), the metaverse resembles the early days of the personal computer industry or the dot-com boom: scores of companies competing for funding, customers, and market share, and only a relative few will survive to turn a profit.
However, it remains too early to know which technologies and which companies will outlast these early days. Speculators will take flyers on companies with buzz; prudent investors will sit on their cash until clear trends emerge.