(Bloomberg) -- Facebook-owner Meta Platforms Inc. and Alphabet Inc. may have ventured earlier than many into the next big thing, but Apple Inc. holds the key to success, Morgan Stanley says.

Facebook and Google have been investing in virtual reality and augmented reality technologies -- a gateway to the virtual worlds in the “Metaverse,” but mass market adoption of “either AR or VR will occur when Apple enters the race,” a research note from the bank said. The consensus belief was based on a survey and chats with a number of upcoming VR/AR companies.

The hardware market for these gadgets is seen as being $100 billion in 2030 and growing another five-fold by 2040, according to Morgan Stanley.

Mark Zuckerberg renamed his company Meta to highlight a shift in focus to virtual reality, signaling the company is an early mover. But there’s merit in Apple’s inclination to wait, the analysts said. 

“The benefit of Apple’s more patient approach to entering new markets is that the chances of success increase with a more informed approach to disruption,” wrote technology analysts Katy Huberty and Erik Woodring. Though Apple is “notably absent” on AR/VR hardware, analysts highlighted how Apple didn’t enter the smartphone market until 2007, much later than Nokia Oyj and BlackBerry Ltd.

Big tech aside, the bank sees the trend providing upside to the following stocks in the AR/VR ecosystem: Entain Plc, EssilorLuxottica SA, Teamviewer AG, Ubisoft Entertainment SA, Vodafone Group Plc and Xiaomi.


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