Apple (AAPL) is Making Acquisitions and Poaching Employees to Enter This Exciting New Reality - Gene Munster

August 31, 2015 9:06 AM EDT
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Apple (NASDAQ: AAPL) is preparing to enter a whole new space, and the company is making acquisitions and poaching employees away from other firms to do it, according to Piper Jaffray analyst Gene Munster. The area of focus is augmented reality (AR)

"Based on recent acquisitions of augmented reality companies, hiring of a key Microsoft Hololens employee, and conversations with industry contacts within the virtual and augmented reality spaces, we believe Apple has a team exploring the AR space," Munster said in a note to clients today.

In his report, Munster noted Apple's March 2015 acquisition of Metaio, an AR software company that according to PatentVue owns 171 worldwide patents and pending applications along with 25 issued US patents. He also highlighted the late 2013 acquisition of PrimeSense, which is best known for designing the first Xbox Kinect Sensors for Microsoft.

Munster also noted that one of the most well known AR projects comes from Microsoft and is called the Hololens. Interestingly, Apple hired away the lead Hololens Audio Engineer at Microsoft.

While broad consumer adoption or A/R is likely 10 years away, Munster said it has the potential to be as profound a technology platform as the smartphone today.

While the theme around augmented reality is so early and it is difficult to size the opportunity, Munster said Apple's early involvement in the space suggests the company is preparing for the next evolution of computing.

Also, Apple's evolving fashion advantage means that they can uniquely develop products that consumers will actually want versus prototype style offerings today.

The firm maintained an Overweight rating and price target of $172 on AAPL.

For an analyst ratings summary and ratings history on Apple click here. For more ratings news on Apple click here.

Shares of Apple closed at $113.29 yesterday.

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