A recent media release from market research firm IDC predicts that Meta (the parent company of Facebook) may not be able to compete in the mixed-reality business in the long run if its strategy remains unchanged.The media release offers a bird’s-eye view of the virtual reality hardware marketplace. In the release, IDC research manager Jitesh Ubrani said that, while “Meta continues to pour dollars into developing the metaverse, [the company’s] strategy of promoting low-cost hardware at the expense of profitability isn’t sustainable in the long run.”
A similar concern was raised by tech industry analyst Ming-Chi Kuo late last month. Kuo predicted that Meta would make moves to scale down investment in virtual reality, creating an opening for Apple and other competitors. He also wrote that Meta’s practice of selling VR headsets at a loss is unsustainable.
Currently, Meta owns 90 percent of the VR headset market, according to the IDC release. In distant second is ByteDance’s Pico, at just 4.5 percent. Overall, VR headset shipments jumped 241.6 percent year over year in the first quarter of 2022. But the industry faced significant supply issues in Q1 2021, contributing to “a favorable comparison” for this year’s Q1.Advertisement Like Kuo a couple of weeks ago, IDC research director Ramon Llamas said that “all eyes will be on Apple as it launches its first headset next year.” Apple’s headset is expected to be much more expensive than Meta’s offerings, driving up the average unit price for the product category across the board, and Llamas believes Apple’s offering “will appeal primarily to a small audience of early adopters and Apple fans.”
In other words, don’t expect the first Apple headset to ship vastly more units than Meta’s Oculus Quest 2 right out of the gate. It’s just a first step in a long-term plan to own the mixed-reality market. As several reports over the past couple of years have noted, that plan will ultimately involve low-cost AR glasses and other products that will seek to broaden the user base for mixed-reality hardware.
Apple and Meta are not the only companies working on mass-market mixed-reality hardware products. We reported in April that Amazon posted several job listings soliciting candidates who can help the company build an “advanced” AR/VR product. And in December, we learned from job listings that Google plans to build a new augmented-reality device and operating system.
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