Investors will have to wait longer for Apple’s next big bet

This week, Apple (NASDAQ:AAPL) held its Worldwide Developers Conference (WWDC), showcasing new features and product updates. As an investor, what should you get excited about… if at all?

No news on Apple’s next big bet during WWDC

In 2016, CEO Tim Cook said Apple is heavily investing in augmented reality — calling it the next “great commercial opportunity” (NYT). Per Bloomberg, in a sign of progress, Apple showed the AR/VR headset to its board members in May.

According to Bloomberg, while we didn’t receive any news during the event, the forecasted headset release date is 2023. But don’t expect the product to impact Apple’s stock significantly in the near term.

• Apple has conservative sales estimates and had trouble finding use cases and content for the headset.
• Apple even brought in Jon Favreau (a.k.a. Ironman’s Happy) to create content for the headset.

Like Meta’s Oculus, adoption is slow and use cases are few beyond gaming. Apple expects to sell 7-10M units in the first year, far short of the 242M iPhones sold in 2021.

Existing car infotainment systems suck…

Apple wants to change that. Apple revealed a new look for its CarPlay — which wraps around a car’s dashboard with more controls.

• In 2014, Apple launched CarPlay, which turns a car’s infotainment system into an iOS dashboard powered by iPhones.
• Today, CarPlay is available in over 98% of new U.S. vehicles. Apple doesn’t charge consumers for CarPlay — instead, using it to attract more iPhone users.

The new CarPlay — still in early development — would give more control over the car (i.e., controls HVAC and replaces gauge clusters). The Verge reached out to automakers who seemed unprepared for the change.

Integrating with Apple’s software isn’t easy, and some carmakers are reluctant to cede power and data to tech giants. Tesla opted to build their own car interfaces, while others work with Amazon or Google to develop their own software.

Investors: What’s really driving Apple’s narrative

New product announcements are exciting — but at the end of the day, iPhones, Macs, and other devices make up over 80% of Apple’s sales.

• Supply chain issues and lockdowns in China were still driving the direction of Apple’s stock — which is down 17% in 2022.
• Apple warned these disruptions could cost them $8B in sales (~8% of its most recent quarter sales).

China has already diversified parts of its manufacturing to India and Brazil — but China is still the dominant production source.