Apple's Vision Pro Price Tag, Release Date Find Little Love On The Street: Why One Analyst Says Disney Acquisition More Likely After WWDC

Apple Inc AAPL unveiled several updates and new products at its 2023 Worldwide Developers Conference (WWDC).

Analysts broke down what the items mean for the tech giant's valuation:

• Goldman Sachs analyst Michael Ng has a Buy rating and price target of $209.
• Bank of America analyst Wamsi Mohan has a Neutral rating and a price target of $190.
• Oppenheimer analyst Martin Yang has an Outperform rating and a price target of $195.
• Needham analyst Laura Martin has a Buy rating and a price target of $195.
• Raymond James analyst Srini Pajjuri has an Outperform rating and no price target.
• Bernstein analyst Toni Sacconaghi has a Market Perform rating and a price target of $175.

Related Link: Apple's Blue Sky Run Killed When New Product Is Unveiled - The Bull, Bear Case 

Goldman Sachs: Ng called the announcements from Apple "consistent with expectations.”

“The launch of the 15” MacBook Air positions Apple well to benefit from the industry PC recovery as we exit 2023 and enter 2024, while the OS updates — while immaterial individually — should help to strengthen the Apple ecosystem and installed base,” Ng said.

The analyst said they are encouraged by the long-term growth for Apple from the new products, but see limited near-term contributions to the company’s financials from the WWDC announcements.

“Although the announcement of the headset was expected, the retail price was of $3,499 was higher-than-expected with a later-than-expected launch date of early 2024 in the US with more countries in the future.”

Bank of America: The mixed reality headset from Apple (Vision Pro) has a wide range of use cases, but comes with a higher price tag than expected, according to Mohan.

“While we believe MR has the potential to drive Services revenue higher via a new set of premium Apps the adoption will take time," he said.

Also, expect there to be lower priced versions of the Vision Pro in the future.

“Apple’s launch of Vision Pro is geared towards its own apps and developer community that will be compatible with apps that run on other Apple devices but not focused on any interoperability across platforms," he added. "We are not surprised by this approach, as it would be difficult for Apple to monetize an open ecosystem.”

Oppenheimer: Apple’s update to iOS 17 focuses on communication features and interactions for Apple users.

“Management sees the headset device as a revolutionary product and the next step in interactive consumer experiences,” Yang said.

The analyst said there were baby steps shown to better gaming for the MacOS from Apple.

“We believe Apple will show stronger resistance to competition with its expanding hardware and software ecosystem," he said. "We expect Apple’s significant leadership in accessories such as Apple Watch and AirPods to provide incremental sales growth, deeper moat for core iOS devices, upside for software and network service sales.”

Needham: Martin has two key takeaways from the Apple WWDC event and they both involve other public companies.

The analyst said that the introduction of the Vision Pro puts Apple into deeper competition with Meta Platforms META, which recently unveiled the Meta Quest 3.

“AAPL wins. We believe AAPL’s new AR-based Vision Pro headsets beats META’s VR-based headset execution,” Martin said.

Martin said the dark glass and transparency of the goggles is better execution than META’s goggles.

Apple’s WWDC event featured The Walt Disney Company DIS CEO Bob Iger. Martin used this connection between the two companies as the other key takeaway.

“At $3,500, we expect adoption to be slow. However, if Apple buys Disney, its storytellers could create unique content to drive consumer adoption of AAPL’s Vision Pro goggles, we believe.”

Raymond James: Pajjuri said the Apple Vision Pro comes with a higher price tag than expected, which could make it more of a “niche device.”

“We see modest impact from Vision Pro to our model in the next 1 – 2 years (<500k units/year), but see sizable longer term potential as ecosystem matures and as hardware prices decline,” Pajjuri said.

The analyst highlighted the new Mac Pro, new Mac Studio and 15-inch MacBook Air as products to excite customers and investors.

“We walked away comfortable with our view that APPL should be a core Tech holding in the current environment.”

Bernstein: The launch of the Vision Pro could be a notable new product expansion for Apple, according to Sacconaghi.

“Apple has a strong track record of creating new markets – the company’s entry into music players, smartphones, wireless headsets, and smartwatches expand each market 10x over the following five years, with Apple typically commanding 20%+ share,” Sacconaghi said.

The analyst said the Vision Pro and Apple’s entry in the VR/AR headsets market could be more difficult than past product category launches.

“The device is shipping later and is more expensive than anticipated, and will likely be immaterial to Apple’s financials for at least a couple of years.”

AAPL Price Action: Apple shares are down 0.3% to $179.14 on Tuesday versus a 52-week trading range of $124.17 to $184.95.

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