February 5, 2023

Apple Vs. Facebook: How The Race For The Metaverse Space Is Shaping Up – Apple (AAPL)

The Metaverse, which is touted to be the next big emerging theme, is a network of 3D virtual worlds focused on social connection. It encompasses several technologies, including mixed reality, the Internet, AI, machine learnings, blockchain,  and video games. Realizing the massive opportunity, companies are going all out to invest time and money into the space.

Apple, Facebook To Play A Central Role: Investors view Apple, Inc. (NASDAQ:AAPL) and Meta Platforms, Inc. (NASDAQ:FB) as two companies that offer the safest choices to invest in the metaverse, Loup Funds Managing Partner Gene Munster said in a note.

Given that both companies are highly profitable, they will likely play central roles in defining the metaverse, he added.

“We believe metaverse companies with less earnings will see a headwind in 2022, while the companies building the metaverse will surely benefit from a flight to quality,” the analyst said.

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Apple Vs. Facebook: There is a high likelihood that Apple eventually has a family of products addressing the metaverse opportunity, Munster said. The analyst expects to see a prototype in 2022.

Augmented Reality or Mixed Reality glasses are a logical Apple contribution to the metaverse, where people will play and work in more immersive digital worlds, the Munster said.

Over the next several years, the metaverse will largely be experienced in 2D as seen now, he noted. Down the road, hardware will power more 3D presence, pitting Facebook vs. Apple in a race to build affordable and comfortable headsets through which the world can experience the metaverse, he predicted.

Facebook’s commitment to forming the building blocks of the metaverse is evidenced by the company’s investment in its Reality Labs division, the analyst said. Roughly 20% or 10,000 employees of Facebook’s total team is stationed at Reality Labs, up from about 5% in 2017, the analyst said, citing a report by Information.

Facebook’s name change to Meta, according to the analyst, is a big deal given that it focuses the company culture on building the metaverse.

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Photo: Courtesy of Pixabay

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