A Healthy Mix of Now and Later |
NEWS
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The Meta Connect conference for 2024 held a handful of major and minor announcements for the company, focused on Artificial Intelligence (AI), Extended Reality (XR), and the metaverse. This was joined with developer-focused announcements, given the nature of the conference, supporting these areas. As eyes of both shareholders and the general public were on Meta to substantiate some of the significant spending and losses happening in Reality Labs, and offer an idea of the company’s future focus outside of AI, Connect was a success. A summary of the most interesting announcements related to the XR space include:
- Mixed Reality (MR): Confirmation of the specifications and launch of the latest Virtual Reality (VR) headset, Meta Quest 3S. With some downgrades compared to the Quest 3, including the optics and display, the starting price will be US$300. This is equivalent to the Quest 2 headset, one of the most successful VR headsets shipped to date.
- HorizonOS Updates: This included both feature and developer support updates. Horizon Worlds has received improvements to graphics, with expanded compatibility to include web, mobile, and headsets. The Meta Spatial SDK will allow Two-Dimensional (2D) apps to leverage spatial features. A camera passthrough Application Programming Interface (API) will be available, as well as improvements in the Interaction SDK, for things like micro-gestures. A User Interface (UI) refresh for HorizonOS is planned in the near future as well, to better support MR across content types. A streamlined experience for Windows Remote Desktop support was also shown.
- AI: AI announcements were split broadly into two categories, back end and user facing. The company reiterated its belief in open source, touting Meta’s approach to AI similar to Linux in the computing space. Meta AI will increasingly leverage the camera and conversational language processing to expand the AI assistant experience. Multi-modal video AI will allow for real-time processing of complex requests using both voice and image, and allow adaptive suggestions based on that data. Real-time translation was highlighted with a live demo, and is clearly a primary application target going forward for the company.
- Ray-Ban Glasses Updates: Many of the AI enhancements mentioned above are either exclusive to or strongly supported by the Ray-Ban glasses. Outside of AI, additional content sources are coming through Amazon Music, Spotify, Audible, and iHeartRadio support. More transition lens options, as well as a limited edition transparent frame version, were also announced.
- Orion: Perhaps the star of the Connect show was Orion, an internal prototype smart glasses product with waveguide displays. Similar in capability to high-end MR smart glasses like Magic Leap and the new Snap Spectacles, the form factor was a noticeable improvement over those—however, there is still a separate compute unit as of now, allowing for the streamlined form factor. Orion, in its current iteration, will stay mostly internal, with no confirmed date for a broader market release, but instead with promises from Meta for improvements to all aspects of the prototype.
AI Still Present, but Developers and Mixed Reality Were a Larger Focus |
IMPACT
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After more than a year of AI being front and center for Meta, the company smartly allowed other pieces of the portfolio to shine, alongside AI efforts. Considering AI and XR have incredible synergy, AI was showcased more as a supporting technology to XR and the broader metaverse than as a standalone toolset and product.
Expansion and improvement of HorizonOS is thorough. This is through both improved and new developer tools, along with expansion of the platform itself. The company’s primary focus for HorizonOS is growing the content ecosystem, and it is tackling this through improving developer support and tools and expanding supported content to 2D smartphone apps and web content. The company acknowledged outright that Meta platforms were difficult to develop for, so focus was greater on developer support than in the past. A separate, dedicated developers keynote went into greater detail, but the highlights were mostly around that expanded app store, as well as improvements to existing APIs, and the addition of new ones like camera passthrough to improve MR access and capability for developers. Support for Unity 6 was announced, and OS-level optimization promised 10% greater Graphics Processing Unit (GPU) availability for better performance.
Opening up the app store to support 2D mobile apps and web apps is a double-edged sword. On one side, more access to content is a boon, especially for a product category that has historically struggled with quantity of content. On the other side, there are concerns around discoverability and dilution of the VR experience. Considering Meta’s push to make its VR headsets more MR than pure VR, though, this combination of content makes sense as the company does not necessarily want to delineate VR and non-VR experiences. Add to this some of the developer feature sets to enable spatial features for 2D applications, and the benefits should outweigh the potential drawbacks overall.
Building an Ecosystem, Rather than a Product |
RECOMMENDATIONS
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Meta accomplished two important things with this year’s Connect: updating current and short-term products, while indicating future potential. If the company had gone another year with a heavy focus on AI, and little update on the rest of the portfolio, valid questions would swirl around the company’s Reality Labs spending. Shorter term, broadening the app store to 2D content and enabling web app support shows a commitment to a larger VR ecosystem. Updating Horizon Worlds shows a commitment to a platform that saw a rough launch, but one that is important to Meta’s broad metaverse platform ambitions. Showing where efforts in AI will overlap with Ray-Ban glasses in the near term strengthens the company’s position in a space it identifies as one of the most promising device types today—admittedly, even a surprise to Meta.
By showing Orion, it gave a physical example of what Meta is building toward. This allows developers to think longer term than the next 1 to 2 years and get invested early if they believe in the vision. Showing Orion early is a bit of a gamble, as some may be expectant of a full product launch, rather than a reveal, but Meta was honest in the difficulty of building Orion. This does draw attention to potential shortcomings, but, in turn, brings opportunities for partnership earlier in the lifecycle. It has been common to reveal a new XR product when it is ready as a developer kit—Orion is even a stage or two before this, which should strengthen Orion’s market entrance through a longer feedback and Research and Development (R&D) cycle.
The only thing that can be argued to be missing from Meta Connect 2024 was a confirmed refresh/update of the Ray-Ban glasses hardware. While there was no indication there would be something of this nature shown, the Ray-Ban glasses are the only current product delivering the vision of AI glasses—MR on VR headsets is getting better, but it is a stopgap in the MR market between display-free glasses like Ray-Ban and what Orion will end up as. Many improvements are still coming to Ray-Ban glasses through software updates, especially through AI improvements, but a slight hardware refresh beyond new lenses and a frame would have solidified the product as more than an accidental success.
The year 2025 will prove an incredibly interesting one for Meta, and for the broader XR market. Competition is expected in the AI glasses space, as well as the true AR glasses (e.g., with displays) segment. There will be an expectation to successfully productize and monetize AI efforts across the board, and XR will prove a powerful partner there, albeit a more complex one than other segments like automation and traditional assistants. Some indication of Quest 3S’s success will also become known—coming in at the same price as the highly successful Quest 2, with a few years of maturation on the hardware and software sides, which makes for a promising market entrance. Should it exceed expectations, Meta’s approach to XR will be validated, and if it falls short, some questions must be asked around the ongoing success of the standalone XR space—considering Meta is, far and away, the leader in the VR headset market, so its successes and failures are, by default, a wider market indicator.
