Apple’s highly anticipated augmented and virtual reality offerings could pay off handsomely for the iPhone maker in the long run, according to Morgan Stanley. Erik Woodring said in a note to clients Friday that near-term “AR/VR is less than 1%, but AR/VR has the potential to be Apple’s next $20B+ computing platform.” Given the situation, analysts raised its price target to $190 a share, up about 5.5% from Thursday’s close. AAPL YTD Mt. Apple’s revised price target for 2023 was released ahead of the company’s Worldwide Developers Conference next week, where many expect the tech giant to reveal its mixed reality headset. This will mark the company’s first major new product line since the Apple Watch was launched in 2014. Overall, technological improvements, growing use cases, and lower priced products could push the total addressable market for AR and VR headsets to $100 billion by 2030, according to Woodring, to $500 billion in 2037. “We believe the launch of Apple’s AR/VR headset can be a catalyst for TAM expansion, just as past Apple product launches have catalyzed market expansion for smartphones, tablets, and wearables,” Woodring wrote. Will offer a range of professional features superior to competitors. This should include a home screen feature that mirrors the 3D iPhone display. Users also want to be able to operate the headset with hand gestures and eye movements without a hand control. “If we assume that Apple can capture the same revenue share in AR/VR headsets as it does in the current product market, then AR/VR headsets could become a $20-70B business for Apple, representing 5-18% of current total revenue,” Woodring said. Other Wall Street firms also seem bullish on the prospects for Apple’s headphones, with Jefferies analyst Andrew Uerkwitz raising his price target to $210 from $195. That represents an increase of about 17% from Thursday’s close. While Apple may announce the product and share it with developers this year, it doesn’t expect a launch in 2024. , in our view, XR has the opportunity to break out of the niche position it has held for the past decade despite high early prices,” he said. Many analysts expect the first iteration of the product to be priced heavily. Ross Sandler pointed out that Apple will need a lower price point to drive mainstream adoption. Sandler said that while this product should be exciting, Apple needs a “killer app” to attract more everyday people. Active users enter a market that is currently small. “Apple’s long-awaited onramp to mixed reality could help validate the tens of billions of dollars that META has invested in the space over the past decade,” he writes. —CNBC’s Michael Michael Bloom contributed reporting.