According to a recent press release from market research firm IDC, Facebook’s parent company Meta may eventually be unable to compete in the mixed-reality market if its business strategy is left unaltered.
A bird’s-eye view of the virtual reality hardware market is provided in the media release. While “Meta continues to pour dollars into developing the metaverse,” according to IDC research manager Jitesh Ubrani, “[the company’s] strategy of promoting low-cost hardware at the expense of profitability isn’t sustainable in the long run.”
Late last month, tech industry analyst Ming-Chi Kuo expressed a similar worry. According to Kuo, Meta would take steps to reduce investment in virtual reality, opening the door for Apple and other rivals. He added that it is unsustainable for Meta to sell VR headsets at a loss.
As of right now, Meta controls 90% of the VR headset market, according to an IDC press release. With only 4.5 percent, ByteDance’s Pico comes in a distant second. Shipments of VR headsets as a whole increased by 241.6% in the first quarter of 2022. However, the industry experienced serious supply issues in Q1 2021, which helped to create “a favorable comparison” for the first quarter of this year.
Ramon Llamas, research director at IDC, concurred with Kuo a few weeks ago when he stated that “all eyes will be on Apple as it launches its first headset next year.” The average unit price for the product category is predicted to increase due to Apple’s headset costing significantly more than Meta’s alternatives. According to Llamas, Apple’s offering “will appeal primarily to a small audience of early adopters and Apple fans.”
In other words, don’t anticipate that the first Apple headset will immediately ship significantly more units than Meta’s Oculus Quest 2. It is merely the first phase of a long-term strategy to dominate the mixed reality market. That plan will ultimately involve inexpensive AR glasses and other products that aim to increase the user base for mixed-reality hardware, as has been noted in numerous reports over the past couple of years.
Other businesses besides Apple and Meta are developing mass-market mixed-reality hardware. As we mentioned in April, Amazon posted a number of job listings looking for applicants who could assist the company in developing a “advanced” AR/VR product. Additionally, we learned about Google’s plans to create a new augmented reality device and operating system from job listings in December.
