The competition in mixed reality is heating up
As investors focus on the prospects of AI, it’s important not to overlook the upcoming computing shift to mixed reality. Meta and Apple are investing heavily in that future, and it’s likely the two companies will be competing head-to-head in this space by year-end. Next week Apple is expected to announce their plans for an MR headset which explains the timing of Meta’s third-generation headset, Quest 3, announcement, a device that adds MR functions to the Quest lineup. The key selling point of Quest 3 is the $500 price, which makes it the most affordable MR headset, a fraction of the expected $3,000 Apple headset price.
The dramatic gap in pricing highlights the companies’ vastly different go-to-market approaches. Taking a step back, the MR theme has a chicken and egg dilemma. Meta appears to be taking the consumer-first approach: sell as many lower-priced devices (5-10m in the first year) as possible to grow a user base for developers to go after. Apple is likely going to take the developer-first approach: sell a smaller number of higher-priced, more advanced devices in the first year (< 1m) to developers that in turn build compelling apps to win over consumers for a more affordable second generation device down the road.
Either approach lands the two companies in head-to-head competition.