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Morgan Stanley dubs Apple Vision Pro a 'free call option on spatial computing'

Apple Vision Pro in an Apple Store.

Wowed by their experience with Apple Vision Pro, analysts at investment bank Morgan Stanley see "immense" long-term potential for the Spatial Computing headset that Wall Street has yet to fully appreciate.

In its first weekend of availability, the Apple Vision Pro received considerable interest from early adopters and industry observers alike. Among them were members of Morgan Stanley's AAPL equity research team who spent a full three days immersed in device's world of spatial computing, having an eye-opening experience that left them jazzed up about its future.

"The long-term potential of the Vision Pro is immense, and against low investor expectations," analyst Erik Woodring said, adding that the success of the device and its successors are "effectively a free call option on Apple innovation."

In particular, the analyst is bullish on the Vision Pro's prospects to mature into a desirable productivity tool for consumers while serving a variety of interest within the enterprise, such as remote training, digital showrooms and in-field remote repairs. Others have lauded potential use cases in surgical, construction and industrial applications.

For the time being, Woodring sees content consumption serving as the Vision Pro's "killer app." He was duly impressed by the clarity and sharpness of its dual displays, which are "incredible" and make you feel like you are have teleported yourself into the environment you're watching.

"It's an entirely new way of consuming content, and is as close to the 'real world' as you can get without physically being there," he said.

In general, his team found experiences of roughly 30 minutes in a mixed-reality setting to be most preferable. Ultimately, he sees the device emerging as a "content powerhouse" with the advent of live sports, graphic-intensive flicks, and mixed-reality games on its platform.

At $3,500 plus tax, Apple Vision Pro certainly isn't for everyone. It's not sharable, has some pixelation issues around the periphery, and will require a physical Bluetooth keyboard to actually be productive in its current incarnation.

Woodring expects these limitations to be addressed as the product matures, believing there's "immense" potential for upside surprise to Apple's bottom line over next three to five years.

Morgan Stanley reiterated its overweight rating and $220 price target on shares of AAPL. The stock is up a fraction of a percent to $188.32 in afternoon trading on the NASDAQ.