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Apple's Augmented Reality Headset May Be Closer Than You Think

By Evan Niu, CFA - Oct 10, 2019 at 9:45AM

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A respected analyst thinks the product could launch in the first half of 2020.

It's an open secret that Apple (AAPL -0.44%) has been developing an augmented reality (AR) headset. CEO Tim Cook has talked up AR's potential for years, and each new major release of iOS incorporates more and more AR features, such as motion capture and people occlusion in iOS 13. Widely followed Apple analyst Ming-Chi Kuo of TF International Securities had previously expected the product to ship in mid-to-late 2020.

Kuo is moving that expected timeline forward.

Person wearing AR glasses with various app icons projecting from them

Image source: Getty Images.

Apple AR glasses could be just months away

In a new research note to investors (as reported by MacRumors), Kuo now believes that Apple is targeting an early 2020 launch for its long-rumored AR headset, potentially in the second quarter. That also means that mass production could commence as soon as the fourth quarter in order for Apple to build up inventory ahead of launch.

The gadget is expected to lean heavily on a paired iPhone, not unlike the Apple Watch. The paired iPhone would do most of the computational heavy lifting while also handling network connectivity and other functions, according to Kuo.

If Kuo's prediction is accurate, then Apple may unveil the device even sooner, potentially at a product event later this month. It has pre-announced products in the past, including the Apple Watch. The company had first presented Apple Watch to the public in September 2014, even though the smartwatch wouldn't launch for another seven months.

Even though Apple is notoriously secretive regarding new products, when it enters or creates entirely new product categories, it needs to give third-party developers time to create apps and content for the new device. For instance, the Cupertino tech giant proudly announced in November 2014 that developers had started designing apps for the Apple Watch.

Following Amazon's lead

Amazon.com (AMZN -1.44%) made waves last month when it unveiled its first wearables, which included $180 Echo Frames that allow wearers to access Alexa by talking to their glasses.

To be clear, Echo Frames do not use AR in any way; Alexa is a primarily a voice-controlled platform and Echo Frames do not display information to the user visually. AR products overlay information on top of reality to provide a heads-up display like something out of sci-fi movies. Echo Frames are also a bit bulky, and offloading the processing to an iPhone should help Apple make the thinnest and lightest AR headset it's ever made.

Bigger questions remain. How much will Apple AR glasses cost? What will they look like? Are mainstream consumers ready to socially accept face-worn wearables en masse? What killer AR use cases can Apple or third-party developers come up with?

The good news is that investors may not need to wait too long to find out.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Evan Niu, CFA owns shares of Amazon and Apple. The Motley Fool owns shares of and recommends Amazon and Apple. The Motley Fool has the following options: short January 2020 $155 calls on Apple and long January 2020 $150 calls on Apple. The Motley Fool has a disclosure policy.

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