Investors gear up for ‘gold rush’ in metaverse hardware - TopAsiaFX

006, Jan 2022

Sony late last year announced it had joined forces with Manchester City to develop a digital recreation of the team’s Etihad home stadium for fans around the world to visit virtually. It was a quiet announcement, investors said, but the sound of football being sucked into the metaverse was deafening.

Companies exhibiting at the Consumer Electronics Show in Las Vegas this week will be hoping for a similarly epic interpretation of their offerings. The aspirants include Samsung, which will give consumers the chance to decorate imaginary homes with digital versions of its household appliances. “It’s no longer a fad, but a well-established trend of the future,” said Samsung of the metaverse.

As another exhibitor put it, the metaverse – a catch-all term for the theory that people will spend ever greater proportions of their lives in ever more immersive virtual worlds – lacks an exact enough definition for anyone to claim that they are an investable play on it.

But to many, the parameters are already sufficiently clear to project heavy demand for certain products. In particular, said the manager of a large global tech fund, 2022 could mark the first year in which investors, after decades of disappointment, considered virtual reality headsets more seriously.

“Investors need to think about the metaverse as nothing less than the digitization of human activity and the disruption of everything that hasn’t yet been disrupted,” said Simon Powell, an equity strategist at US investment bank Jefferies. He noted that metaverse projects such as that between Sony and Manchester City would join a near-constant stream of real-world activities mirrored in a virtual space.

The process, he said, would ultimately require more processors, vastly more computing power, and wearable devices that would drive a wave of hardware demand comparable to the early years of smartphones. The producers of components such as semiconductors, servers, sensors, cameras, and displays stand to benefit.

“Think back to the early days of the mass-market internet investment gold rush. The best bets in those first stages were on the hardware – the picks and shovels,” said Powell.

Apple’s $3 trillion (€2.6 billion) market valuation, added Powell, might already be fuelled by speculation it was close to unveiling a headset as revolutionary to consumer tech as the original iPhone. Continue reading on The Irish Times.