On Monday, Meta CEO Mark Zuckerberg showed how far the social media company has come, revealing the many unfinished headphone prototypes the company has built-in its lab.
Zuckerberg has promised the future of the social networking company he founded based on virtual reality, immersing users in a computer-generated world, and augmented reality, which overlays computer-generated objects on top of the real world.
Last year, the company altered its name to Meta to reflect its new focus on the Metaverse, a virtual world where Zuckerberg envisions humans spending more time ideally through the glasses of advanced computers.
Suppose Zuckerberg succeeds in turning mainstream computers into heads. In that case, Meta will have a new revenue stream from hardware sales and will control its hardware platform, making it less susceptible to platform changes than other companies. For example, during its most recent earnings call, Meta said that the latest privacy changes Apple is making to the iPhone could cost $10 billion in revenue loss this year because it affects the company's ability to target ads to the right audiences and align with.
The VR market is currently small, and the question is how big it can get. According to IDC estimates, meta now dominates headphone sales, with the $299 Quest 2 currently accounting for 78% of all headphone sales in 2021. But only 11.2 million VR headsets were sold for less than smartphones or computers during the year. Meanwhile, investors are skeptical of diverting Meta away from its core business of advertising and apps.
Monday's demonstration did little to allay those fears -- meta stocks closed down more than 4% on Tuesday, despite broader gains in tech stocks.
What Zuckerberg showed
Meta is developing a next-generation virtual reality display designed to give users a realistic experience, making them feel like they're in the same room as another virtual person, Zuckerberg said during the demonstration. The current display has low resolution, displays distortion artifacts, and is unusable for long periods.
