Looking ahead | Metaverse 2023: What makes Apple different this time?

At the Apple Developer Conference (WWDC) 2023, which opens on June 6th, Apple is expected to release the long-awaited first generation of MR (Mixed Reality) headsets. This is also the tech giant's fourth attempt to enter this new hardware category.

By summarizing the lessons learned from the last round of Meta's failure, Apple's relative competitive advantages over Meta, and the new changes in generative AI this year, Huatai Securities believes that MR products are expected to usher in another round of development opportunities in the next 2-3 years.

Can Apple succeed?

Changes Apple may bring: Better hardware and rich ecology

According to Bloomberg, Apple is developing a second-generation MR headset for consumers, which is expected to be released in 2024/2025.

In terms of hardware, the product may be equipped with high-resolution, fast response, high contrast, and wide color gamut silicon-based OLED, providing a better immersive experience. And through more than ten cameras and LiDAR sensors, it provides multidimensional perception interaction experience such as full-color perspective, eye movement, gesture, and facial tracking.

In terms of ecology, Apple currently has 2 billion active users worldwide, over 900 million software subscription users, over 34 million registered developers, and over 20,000 apps. The rich developer resources and existing ecological foundation may accumulate conditions for MR's lightweight application innovation development.

Huatai Securities predicts that sports and fitness will be one of the main applications of MR, which may form an ecological closed loop with watches, TVs, etc., and the company's hardware ecology may be further improved.

According to Bloomberg, MR will also support the Fitness+ application, and users will be able to watch fitness coaches' action guidance in the headset, meditate in immersive space, and watch events such as Major League Baseball and the National Football League in immersive mode.

Currently, Fitness+ can already integrate various fitness data from Apple Watch and present it on iPhone/iPad/Apple TV, creating a unique fitness experience for Apple users, providing multiple services including physical training demonstration courses, customized content recommendations, and training music.

Generative AI will empower the content production revolution in the Metaverse, upgrading gameplay experience and production marketing comprehensively

Under the empowerment of generative AI, content production is expected to gradually enter the AIGC era from the PGC and UGC era. Taking game entertainment content as an example, AIGC will bring innovation and upgrading to the gameplay experience and cost reduction and efficiency improvement to the production and marketing end for game players.

Currently, generative AI is expected to accelerate landing in NPC intelligent interaction and gameplay design innovation. The continuous maturity of AINPC will change the interaction between game players and characters and may also help game types and gameplay innovation. In addition, the cost reduction and efficiency improvement brought by text-based AI generation tools such as ChatGPT, AI image generation tools such as Stable Diffusion and Midjourney, and AI video generation tools such as Gen2 have gradually been reflected in various aspects of the gaming industry. With the rapid iteration of tool-based AIGC product services, the "shovel sellers" in the industry will accelerate the empowerment of AI in content production.