"Essentially, what this is, is Google Glass that is not as geeky or creepy, and ultimately it's something that takes the real world and overlays the virtual world on top of it," Munster told CNBC's "Squawk on the Street."
He added that Apple's device could ultimately revolutionize the way consumers look at life. "This is the next evolution in computing," he said. ( Tweet This ) "It will eventually replace the display as we know it. Whether it's a phone or a computer, it's going away."
Nevertheless, Piper Jaffray's senior research analyst also said it will take a long time for the tech giant to release such a device. "It's going to take 10 to 20 years to do it, but Apple's working on solving [its display problem]," Munster said. "Google Glass was clumsy. It was difficult to see in it and then there was this social stigma around it."
Munster added that Piper Jaffray learned of Apple's latest venture into the augmented reality space through its own research. "As we did more work around what Facebook and Google were doing in this space, Mark Zuckerberg, when they acquired Oculus, said this is the next big-development platform. ... As we did more work on that, it became clear that Apple also had experts working there," he said.
Apple did not immediately respond to CNBC's request for comment.
The company's stock was up nearly 1.1 percent in midafternoon trading on Wednesday.