Meta Platforms is heavily increasing its investments in augmented reality (AR) and virtual reality (VR) projects, with spending projected to surpass $100 billion in 2024. The company is positioning smart glasses, such as Ray-Ban Meta, and its Quest VR headsets as key elements in a broader strategy to create a computing platform that could reduce dependency on Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOGL) for app distribution. This vision reflects CEO Mark Zuckerberg’s belief that 2025 will be crucial for the adoption of AR technologies, particularly in the wearable tech sector.
Why is Meta Betting So Big on Smart Glasses?
Meta has already poured more than $80 billion into its Reality Labs unit since acquiring Oculus in 2014, according to estimates. Reality Labs, the division tasked with developing AR and VR devices, hit a record $20 billion in spending last year. Even though the Ray-Ban Meta glasses sold 1 million units last year, other devices, such as the Quest VR headset, have not matched the same level of market penetration. Aiming to overcome these challenges, Meta plans to significantly increase its investment in smart glasses, betting on their potential to replace conventional smartphones in the near future.
Can Meta Compete Against Apple in the AR Space?
Meta’s strategy coincides with Apple reportedly shelving its AR glasses project due to lukewarm reception of its Vision Pro headset. This shift could give Meta an opportunity to establish itself as a dominant player in the AR and VR markets. Zuckerberg has emphasized the importance of these technologies for Meta’s long-term ambitions to create a computing platform independent of iOS and Android ecosystems, broadening its control over how apps and services are distributed.
Meta’s investments also feature significant artificial intelligence (AI) development. Zuckerberg announced plans to allocate $60 to $65 billion this year for AI infrastructure, including a data center with the capacity to host over 1.3 million GPUs. This initiative is seen as a parallel effort to support Meta’s AR/VR ecosystem and enhance the performance of its core products.
Statements from analysts like Matthew Ball suggest that while the scale of Meta’s spending is extraordinary, it might not be unwarranted if the company successfully builds an ecosystem to rival Apple’s influence. However, the financial impact of these extensive investments remains highly uncertain, especially as adoption rates for some devices have been slower than expected.
In recent years, Meta has consistently pursued AR and VR technologies as part of its metaverse ambitions. However, earlier efforts, such as the initial Oculus VR devices, faced obstacles in scaling and mainstream adoption. Despite these hurdles, Meta has continued to refine its strategy, now integrating AI capabilities and making broader investments in wearable technology to strengthen its position in the industry.
Although the success of Meta’s AR/VR initiatives depends on various factors, including consumer adoption and technological breakthroughs, the company is betting heavily on a future where AR and VR devices play a central role in computing. For potential users, this could mean an expanded range of functionalities in devices like smart glasses, from entertainment to productivity. However, the high costs associated with these technologies might limit their accessibility in the short-term, potentially shaping their adoption curve over the coming years.
