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Meta Reportedly Scrapped Smartwatch, Delayed AR Glasses: What You Need to Know

What is happening

Facebook parent company Meta no longer plans to release AR glasses in 2024, has scrapped plans to release a smartwatch, and will market its Portal video chat devices as a device for businesses rather than consumers. The company said it still plans to release wearable wristbands and AR glasses.

why is it important

The change in business strategy means consumers will likely have to wait longer for these portable devices, and it underscores some of the challenges Meta faces as it spends billions of dollars on the Metaverse.

Facebook’s parent company, Meta, is betting big on the metaverse, the virtual worlds where people want to work, play and socialize. But a string of reported product cancellations suggests it will be some time before the gamble pays off.

Meta has scrapped plans for a 2024 release of its first version of augmented reality goggles and will instead focus on a second version of the goggles, according to The Information, which cited both a memo to employees and people familiar with the topic. Meta is also pausing development of a dual-camera smartwatch, opting to work on other wrist devices, Bloomberg reported. Additionally, the company plans to market its Portal video chat devices to businesses with remote workers rather than consumers, according to reports.

The delays mean consumers will likely have to wait longer than expected for Meta’s wearable devices, and it highlights the challenges the company faces as it shifts its focus more towards consumer devices. Wearable devices such as smartwatches and AR glasses, which have not yet become as ubiquitous as smartphones, are key to how Meta expects people to enter the metaverse. Although Meta has created a multi-billion dollar ad business and the world’s largest social network, it doesn’t have the reputation for developing hardware like Apple or Samsung.

“Much of it will depend not only on the technology that [Meta brings] in the market, but overall consumer adoption will also be driven by other companies,” said Jeremy Goldman, director of marketing and retail briefings at Insider Intelligence. Apple is rumored to be working on an AR/VR headsetalthough analysts don’t expect the company to launch the product this year.

Meta Chief Technology Officer Andrew Bosworth, who oversees the company’s hardware projects, tweeted Thursday that Meta still plans to release hardware, such as wrist wearables and AR glasses.

“The path to breakthrough products is not a straight line,” he said in the Tweeter. “As is common in our industry, we iterate through multiple prototypes in parallel and switch resources as we learn.”

Meta did not respond to a request for comment.

Here’s what you need to know about Meta’s consumer hardware efforts.

What do glasses, smartwatches and video chat devices have to do with the metaverse?

Years before Facebook rebranded itself as Meta, the company had already set its sights on what might come after mobile internet.

In 2014, the social media giant spent at least $2 billion to buy virtual reality headset maker Oculus and talked about a future in which people can experience major life events, like taking first steps. of a baby, without being there in person.

However, creating the Metaverse involves more than just strapping on a VR headset and encompasses multiple ways for people to enter and exit virtual worlds.

“You will go through these experiences on different devices – augmented reality glasses to stay present in the physical world, virtual reality to be fully immersed, and phones and computers to jump from existing platforms,” said Meta CEO Mark Zuckerberg said in a founder’s letter released when the company announced its name change in October 2021.

What devices did Meta launch?

Apart from releasing VR headsets, Meta also offers a range of video chat devices called portal.

In 2021, the company released its first smart glasses, a collaboration with Ray-Ban. The glasses allow people to take photos and videos, as well as listen to music. At the time, Zuckerberg said smart glasses are “an important step into the future when phones will no longer be a central part of our lives.” They do not, however, include augmented reality.

Meta hasn’t publicly confirmed that it plans to release a smartwatch in 2024, but Bloomberg reported that the product includes activity tracking, music playback, messaging and a camera so users can take photos. .

Last year, Meta presented some of the technology on the wrist which could detect your neural signals and track your intentions. And Meta also opened its first physical store in May to introduce its VR headset, smart glasses and Portal video chat devices.

Are consumers buying these devices?

Meta hasn’t revealed how many people use its VR headsets, smart glasses and video chat devices, but the company is losing money on its metaverse ambitions. In the first three months of this year, Reality Labs, Meta’s metaverse business, lost $2.96 billion, Meta said in an earnings report.

The Information reported that research firm IDC estimates that Meta’s Portal video chat devices account for less than 1% of the global market, behind Amazon Echo and Google Home products. Consumers started buying more Portal video chat devices during the pandemic but not enough for gadgets to become mainstream. IDC estimates the company shipped 600,000 Portal devices in 2020 and 800,000 in 2021, an increase of about 30% year over year.

In April, Zuckerberg told investors he didn’t think the company’s metaverse business would be profitable for a long time. He sees Meta’s investments in building these devices as part of preparing the groundwork for the 2030s, when Zuckerberg expects virtual reality and augmented reality to be “more established as a platform.” main computer”.

Why is Meta delaying the release of some of these gadgets now?

Bloomberg said the delays are likely due to Meta’s efforts to cut costs. In May, Meta confirmed to Reuters that Bosworth had told employees the company could no longer afford to do some projects and planned to postpone others.

Social media companies anticipate challenges when it comes to raking in advertising dollars, which make up the bulk of their revenue. The war in Ukraine, for example, prompted some advertisers to suspend ad campaigns, and Apple’s privacy changes forced advertisers to do more to gauge the effectiveness of their marketing, with less data on consumers. Last year, Apple has released a new feature which requires people to sign up for apps that collect their data, a move heavily criticized by Facebook, which alleged the change would hurt small businesses. Apple said the change gives users more control over their data.

There are other challenges facing Meta. The social network has encouraged people to post more videos as it competes with rival TikTok, but Meta doesn’t make as much ad money from short videos as it does from other products.

“Meta has been clear that it is now focused on two main goals: to grow and monetize short video and to build its share of the metaverse,” said Mike Proulx, vice president and research director at Forrester. “The company’s moves around Portal are just one more signal that Meta is divesting itself of anything that will take resources away from its north star.”

Meta isn’t the only social media company looking to cut costs. Snap, which has also launched consumer gadgets such as smart glasses and a selfie drone, lowered expectations for second-quarter revenue and profit. Outside of Apple’s privacy feature, Snap said it faced rising inflation and interest rates, supply chain shortages and other challenges. Meta, like Snap, would also slow down hiring.