It's hard to define what exactly the metaverse is at this point of development. It could simply be a continued advance of the internet to more video calls that include 3D avatars and more immersive experiences. It could be an entirely new Ready Player One–style virtual universe that we enter and block out the outside world. Or it could be something in between.
No matter how the metaverse plays out, I think Apple (AAPL 0.36%) will play a key role in its development. Apple isn't going to build the metaverse the way Meta Platforms (META -0.47%) plans to, but it makes the hardware that hundreds of millions of people have at their fingertips every day, and that's likely to be the first point of entry for the metaverse.
Image source: Getty Images.
Apple's role in the metaverse
Broadly speaking, I think there's wide agreement that the metaverse will involve more avatars and 3D visualizations in the future, whether that's in VR, video game–like immersive environments, or some kind of augmented reality. It's clear that users will need high-powered electronic devices to access it.
Apple is the clear leader in smartphones, and if they turn out to be core to accessing the metaverse directly or connected to some kind of glasses, it will be a tailwind for Apple.
On top of smartphones, Apple's recent chip announcements should be taken very seriously. The Mac Studio with the M1 Ultra chip is now competitive with Nvidia's (NVDA 5.04%) RTX 3090 graphics cards, which are a standard for video games today. Given Apple's ability to rapidly improve chip performance, I think it's likely Apple computers will become some of the best for 3D graphics. And given their ease of use, I like the company's position in making the metaverse accessible to a broad range of people.
Add this up and I think Apple's existing product lineup will likely supply the devices that millions of people use to access the metaverse.
Building in plain sight
If the metaverse is some kind of virtual or augmented reality, there might be no company built to succeed in that market like Apple. The ARKit that lives within its iPads and smartphones today was introduced in 2017, and since then, Apple has been adding hardware that makes augmented reality more powerful. iPhones and iPads include LiDAR and TrueDepth cameras that could be critical hardware for AR and VR devices.
We don't know what Apple has up its sleeve from a glasses standpoint, but the company has been rumored to be working on either VR or AR glasses for years. If that's the direction the market heads -- which isn't certain given the slow adoption of the Oculus Quest VR headset -- Apple is more prepared than you might think.
Hardware will be key to the metaverse
No matter what you think the metaverse will look like, users will need some kind of hardware to access it, whether that's a computer, smartphone, or VR/AR glasses. Apple is a logical leader in this device category, and I think it will remain so for the foreseeable future. This is a company that's providing the infrastructure for metaverse builders, which is a great way for investors to profit from the metaverse trend.
