A recent media release from market research firm IDC predicts that Meta (Facebook’s parent company) 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, “Meta continues to pour dollars into developing the Metaverse, [the company’s] The strategy of promoting low-cost hardware at the expense of profitability is not sustainable in the long run.”
Tech industry analyst Ming-Chi Kuo raised similar concerns late last month. Kuo predicted that Meta would take steps to reduce investment in virtual reality, giving a head start for Apple and other competitors. He also wrote that Meta’s practice of selling VR headsets at a loss is not sustainable.
Currently, Meta has a 90 percent share of the VR headset market, according to an IDC release. In second place is ByteDance’s Pico with just 4.5 percent. Overall, VR headset shipments grew 241.6 percent year-on-year in the first quarter of 2022. But the industry faced significant supply problems in the first quarter of 2021, contributing to a “favourable comparison” for the first quarter of this year.
Like Kuo a few weeks ago, IDC research director Ramon Lamas said “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, pushing up the average unit price for the product category across the board, and Lamas believes Apple’s offering is “primarily for early adopters”. Will appeal to a smaller audience of users and Apple fans.”
In other words, don’t expect the first Apple headset to ship a lot more units than Meta’s Oculus Quest 2 right out of the gate. It is the first step in a long-term plan to own a mixed-reality market. As noted in several reports over the years, that plan will eventually include low-cost AR glasses and other products that seek to broaden the user base for mixed-reality hardware.
Apple and Meta aren’t the only companies working on mixed-reality hardware products in a big way. We reported in April that Amazon posted a number of job listings that could help candidates build “advanced” AR/VR products. And in December, we learned from job listings that Google is planning to build a new augmented-reality device and operating system.