Mark Zuckerberg sets expectations for his new $1,500 metaverse gadget at rock bottom
Mark Zuckerberg, chief executive officer of Meta Platforms Inc., demonstrates the Meta Quest Pro during the virtual Meta Connect event in New York, US, on Tuesday, Oct. 11, 2022.
Michael Nagle | Bloomberg | Getty Images
Critics and tech pundits weren’t the only people disillusioned by Meta‘s new $1,500 virtual reality headset. Mark Zuckerberg himself was too.
In an interview published Tuesday with The Verge, Zuckerberg said VR, the technology he bet his entire $340 billion company on a year ago, is entering “the trough of disillusionment.” That’s a term folks in the tech industry like to use when excitement around a new technology drastically wanes.
His comments effectively place expectations for the success of the new Meta Quest Pro, which goes on sale Oct. 25, at next to zero. At the same time, Zuckerberg reiterated his belief that the metaverse will be the next iteration of computing after the smartphone — it’s just going to take a long time. Specifically, he told The Verge “it’s not going to be until later this decade” when metaverse gadgets like the Quest Pro will be “fully mature.”
But Meta isn’t selling headsets later this decade. It’s selling them now, and expecting technologists and software developers to invent compelling reasons to buy one.
That was the biggest takeaway from Meta’s event Tuesday — not the hardware and what it can do, but the lack of compelling software and use cases to make you feel like you need to run out and buy one. If this was supposed to be Meta’s “iPhone moment,” it failed to deliver.
And keep in mind, this is all happening as Meta’s primary business through the Facebook and Instagram apps, face crushing headwinds. Users are leaving Facebook. Reels, Meta’s TikTok competitor, has struggled to make money from ads amid poor engagement, as The Wall Street Journal reported last week. Apple’s recent privacy updates made it more difficult for Meta to target ads to iPhone users. The stock is down a whopping 60% so far this year.
Meanwhile, Meta is losing at least $10 billion a year trying to force the metaverse into existence as Zuckerberg himself warns of waning interest in the concept.
Yes, it’s possible Zuckerberg will be proven right at the end of the decade or some time in the 2030s. But it’s 2022, and the company has plenty of contemporary issues to manage before then.
In a note to Meta investors Wednesday morning, Needham analysts praised Zuckerberg’s risky ambition for the metaverse, but also noted the importance of assessing where the business is today.
“Our job is to make stock calls,” the Needham analysts said, later adding, “We admire Mark Zuckerberg’s commitment to a vision in the face of overwhelming odds. Meta is willing to make big bets that may change the world for 2 billion consumers, or create an epic fail.”
WATCH: Meta CEO Mark Zuckerberg unveils $1,500 mixed reality headset, the Meta Quest Pro
A Waymo rider-only robotaxi is seen during a test ride in San Francisco, California, U.S., December 9, 2022.
Paresh Dave | Reuters
Alphabet’s Waymo unit plans on bringing its robotaxi service to Dallas next year, adding to a growing list of prospective U.S. markets for 2026, including Miami and Washington, D.C.
Rental car company Avis Budget Group will be managing the Waymo fleet in Dallas, via a new partnership the companies announced Monday.
Avis CEO Brian Choi said in a statement that the agreement marks a “milestone” for the company, which is now also working to become “a leading provider of fleet management, infrastructure and operations to the broader mobility ecosystem.”
Waymo robotaxi testing is already underway in downtown Dallas involving the company’s Jaguar I-PACE electric vehicles with the Waymo Driver system. That combines automated driving software, sensors and other hardware that power the vehicles’ “level 4,” driverless operations.
Passengers will be able to hail a driverless ride using the Waymo app in Dallas. In some other markets, Waymo only makes its services available through ride-hailing platform Uber.
Waymo has surged ahead in the robotaxi market while other autonomous vehicle developers, including Tesla, Amazon-owned Zoox, and venture-backed startups such as Nuro, May Mobility and Wayve, are working to make autonomous transportation a commercial reality in the U.S.
Waymo says it conducts more than 250,000 paid weekly trips in the markets where it operates commercially, including Atlanta, Austin, Los Angeles, Phoenix and San Francisco.
Waymo’s steepest competition internationally comes from Baidu’s robotaxi venture Apollo Go in China, which is eyeing expansion in Europe.
On Alphabet’s second-quarter earnings call, execs boasted that, “The Waymo Driver has now autonomously driven over 100 million miles on public roads, and the team is testing across more than 10 cities this year, including New York and Philadelphia.”
The business has become significant enough that Alphabet even added a category to its Other Bets revenue description in its latest quarterly filing.
“Revenues from Other Bets are generated primarily from the sale of autonomous transportation services, healthcare-related services and internet services,” the filing said.
The Other Bets segment remains relatively small, however, with revenue coming in at $373 million in the quarter, up from $365 million a year ago. The division still reported a loss of $1.25 billion, widening from $1.13 billion in the second quarter of 2024.
WATCH: Waymo co-CEO on 10 million driverless rides and Tesla’s coming robtaxi challenge
Ray-Ban Meta smart glasses on display in the window of a Ray Ban store in London, UK, on Friday, July 19, 2024.
Bloomberg | Bloomberg | Getty Images
Revenue from sales of Ray-Ban Meta smart glasses more than tripled year over year, EssilorLuxottica revealed Monday as part of the company’s most recent earnings report.
EssilorLuxottica said the success of the Ray-Ban Meta glasses, built via a partnership with the Facebook parent stemming back to 2019, contributed to its first-half overall sales of 14.02 billion euro (US$16.25 billion), which represents a 7.3% year-over-year jump.
“We are leading the transformation of glasses as the next computing platform, one where AI, sensory tech and a data-rich healthcare infrastructure will converge to empower humans and unlock our full potential,” EssilorLuxottica CEO Francesco Milleri and deputy CEO Paul du Saillant said in a joint-statement. “The success of Ray-Ban Meta, the launch of Oakley Meta Performance AI glasses and the positive response to Nuance Audio are major milestones for us in this new frontier.”
In the earnings report, the company said that its new Oakley Meta smart glasses, unveiled in June, represents the latest product line to come from its partnership with the social media company. CNBC reported in June that Meta and Luxottica plan to debut a Prada-branded version of its smart glasses in the future.
Luxottica owns several well-known brands including Ray-Ban, Oakley, Vogue Eyewear and Persol.
In September, Meta renewed a long-term partnership agreement with Luxottica to “collaborate into the next decade to develop multi-generational smart eyewear products,” according to the announcement.
WATCH: Meta’s ambitious AI plans.
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