Shades of Apple licensing the Mac OS to clone hardware vendors in 1995 - 1997. It seems like Meta will be controlling the software experience quite closely, just like Apple did back in the day.
There’s an important difference though: Apple made all their money on Mac hardware margins which the nimble clone vendors could undercut. Whereas for Meta, the Quest hardware has always been sold at breakeven or even as a loss leader (a few years ago they actually raised the price of the Quest 2 to cut further losses).
So there’s no kind of existential danger to Quest here, but it remains to be seen if the hardware licensees can bring anything relevant to the table either.
> So there’s no kind of existential danger to Quest here, but it remains to be seen if the hardware licensees can bring anything relevant to the table either.
Why would I, as a potential hardware maker, wish to compete in a market where the existing main producer is a mega wealthy entity that is already dumping product below cost and is capable of doing so indefinitely?
The low end of the market is taken - but (from an outsider perspective) the high end appears free.
The people who want to buy a Honda aren't the same people who want to buy an Acura, even though it's (essentially) the same parts.
Let's say that, tomorrow, Gucci or Dolce and Gabanna (or however you spell that) want to make a VR headset (why? who knows?). They don't have the tech acumen to compete with Facebook on experience, but they have the brand to compete on "people who want to be seen in Gucci."
Is there a market for that? I don't know. But this opens Facebook up to the possibility of making that deal.
Don’t agree with this take. I’m sure Meta would be fine with other vendors taking over the low-end, if that meant there was a vibrant platform they controlled (ie the OS). They will lead with flagship models to push the boundaries of what the OS/tech can do.
Why would they want to sell at/below cost forever? The reason they do this now is to make the platform viable.
The only reason they are focusing on cheaper devices now is to build the platform and try to get more users, to in turn get more data on what the killer usecases will be.
Think of this as a play like Android. Google doesn’t care what goes on in the commodified end of the spectrum, as long as there is one. Google does ship flagship phones (in competition with eg Samsung) and that is fine.
They want their own platform so they can do whatever they want on their apps. They are playing the long game. Read zuck's VR vision letter. He lays it all out:
Meta is the last company in the world that I would allow to have direct access to my gaze tracking data.
The only thing that I can imagine that would be more privacy invasive would be a device that directly reads your brain waves while you are exposed to different stimuli.
I feel exactly the same, but I think we’re very much in the minority with that perspective compared to most consumers, so they could still sell like gangbusters.
And on that note I can’t wait to see Meta’s answer to Neuralink!
My point is that there is more to "VR Headset Market" than just "low end" - low end is one part of the market, but (right now) Facebook has that part locked up.
It may be that there are more places to compete in the VR Headset Market that people on HN don't know about.
Like you said, this is probably something like an Android play. Everyone was talking about the Apple Vision Pro as the VR Market's "iPhone moment" when it came out - maybe Meta Vision OS (or whatever they're calling it) is Facebook's Android moment.
And yeah, Facebook would probably be ok with others taking the low end of the market if they do it well. Right now, Facebook is the only company willing to take a loss on their own platform. So they do.
It is a wonderful indispensable device for a very special market.
Particular Mac users who happen to particularly like the physical and mental ergonomics, and locational and furniture freedom, of arrangeable virtual screens and a beautiful visual isolation chamber on demand.
(And in my case, who have dramatically customized the light shield and straps to be super comfortable for long periods.
I would buy the next version at twice the price if it came out tomorrow. And give up a lot to do it.
But that is a VERY niche market. There are only three of us happy campers, after the return wave. It is definitely not an iPhone - yet.
Personally, I think they should lean into it as a MacBook Pro killer. Make it a first class pro computing device. That is a good rationale for keeping around a high end spec, high priced version.
Then have Air versions when it becomes possible to ship a cheap enough iOS-computing level version for the masses.
I agree. I’m reading this (and now typing this reply) from the Vision Pro, while doing a 2-hour low-and-medium-intensity cardio workout on my elliptical trainer. Hard to overstate how much better this is than the old MBP/iPad plus big-screen TV setup I had.
I would also buy another AVP immediately, if I broke this, or if a better one came out,
But that is… extremely niche. The OS is as bad as iOS 1.0 was — but without the obvious utility to a huge number of people. I’m not sure Apple can pull this off.
But, I have all the Meta headsets, too, and have used them for this purpose. That gives me the perspective to understand that, while on one hand it is indeed “just another VR headset”, there has never been one actually usable for this before. Apple has the lead along a dew different axes. The question is, do they have the stomach to lose money on it for 10 years like Meta has>
(Even if they don’t literally sell it below cost, like Meta, it won’t work out if they don’t keep iterating as hard as they can on the software side. Like the first iPhone, it is simultaneously amazing, unprecedented, and objectively awful in many ways.)
P.S.
I do easy work in here on the gym machines, too. Not just HN-reading. ;-)
BTW the key to getting work done in AVP while running on a machine (or any other active scenario, like housework or walking to the grocery store) is to enable some of the Accessibility features.
The normal dictation feature is so bad it is unusable for more than a sentence fragment. The one enabled via Accessibility is incredibly good, aside from a bit more latency than I’d like (but easy to get used to that), and enables mixed voice dictation and keyboard-typing, without switching modes.
And that's why Meta will fail. The company doesn't have the branding or the technical imagination to create either a mass-appeal or a high-end prestige product. Apple has both, and its best VR effort appeals to a few thousand people.
As long as VR is limited to facehuggers the market will remain niche. VR glasses are a good few years (decades?) off.
In the meantime Apple will eat the high end and probably some of the low end.
So where does that leave Meta?
It doesn't help that Meta is more of an annoyance than brand. I'm not sure anyone actually likes Meta or Meta's products. While they're tolerated to some extent, they're perceived as fundamentally boring or irritating in a way that is deadly for brands.
"Our overall vision for the space is that we will be completely ubiquitous in killer apps, have very strong coverage in platform services (like Google has with Android) and will be strong enough in hardware and systems to at a minimum support our platform services goals, and at best be a business itself"
- Zuckerberg's 2015 VR letter
That’s almost nine years ago. He may or may not have changed his mind.
It would help if Meta said something about that. Ideally for potential third party hardware manufacturers, they’d promise to leave the hardware market once a vibrant ecosystem exists.
Defining “vibrant” then would be hard to impossible, though. The edge cases are easy, but uninteresting. If none of the others are making money on hardware there is no vibrant system. If multiple other parties are making money, they probably wouldn’t care much whether Meta makes some money, too.
For in-between cases, where third parties make some money, Meta will have to choose between staying in the market because others don’t sell enough and Meta leaving the market so that others get more room to sell and thus become profitable.
While the pedantry is whatever to me, they're not misunderstanding the usage of "take" they're pointing out the missing subject of "I". Leaving out the "I" like this turns the sentence from describing a personal opinion to commanding someone else to have that opinion.
I put the pan on the stove.
Put the pan on the stove.
I talk to your brother.
Talk to your brother.
Leaving out the "I" changes the meaning of the sentence here. "I disagree with x" means something else entirely than "Disagree with x."
It feels less like low vs. high-end and more like specialized vs. general hardware.
For example, if you're selling VR headsets for the purposes of industrial training, you may not want the consumer-grade hardware Meta is selling. You may need weather-sealing to allow outdoor operation. You may need vastly higher-resolution screens for industrial applications. The list of specializations goes on.
The specialized businesses tend to have wider moats and bigger margins. The TAM is smaller - too small for a mega-cap company like Meta to care about, but nonetheless can contribute to the health of the ecosystem.
This play gives influence over these niche, specialized uses of AR/VR without having to commit the entire company to it.
For example think of a medical instruments company that trains on VR headsets. Their choices right now are to use consumer-grade hardware which may not hit all of their needs, or become a full-on AR/VR company with all the requisite R&D that involves.
This allows these companies to exist in the middle ground - having the core R&D being done by another party, but having sufficient control to ship specialized hardware.
> The people who want to buy a Honda aren't the same people who want to buy an Acura, even though it's (essentially) the same parts.
Nit, but as an Acura driver (chooser), I can tell you that they are definitely not essentially the same parts. The irrelevant parts are the same, but everything that matters to the driver (suspension/drivetrain, interior materials, technology, etc.) all all different and better in the Acura. I get what you're trying to say, but that was not a good metaphor.
This depends on the model. I have an Acura project car and most of my performance relevant parts are Honda part numbers. Interior is the main exception.
Heck, I've got a Civic intake manifold in the room with me to replace the Acura one, haha. (The generation of K series after mine has better airflow and it's an easy enough swap.)
The Acura brand doesn't even exist outside of the US- if a car is sold in Europe or Japan the parts are Honda.
when you say something it's better, you should add better in what angle, because Acura suspension can be better for high speed cornering in a circuit, but suck if you leave in a place with bad road surface, and the honda suspension can be both softer and cheaper to replace.
Yes, but also there are currently so few components to pick from. SoC is definitely some kind of variation of Snapdragon XR2 unless you're Apple.
Can't go into high-end because for a device to make sense either an existing ecosystem around it or high confidence in one appearing. If you tell me that I can buy a 3k dollar vr headset that can run current quest library, I would pretend you're joking.
Mid-end is where we're at right now has/had very small margins because despite it being mid-end - you still have to use high-end components due to lack of options.
I can see someone like Porsche Design making a "high-end" headset (in terms of price, components would be the same). The only option for low-end is to use components previously used in mid-end that would need to compete with used previous gens since they would be nearly identical on the hardware level.
I feel like this is a bit off. There have been things like Porsche phones, but those are so niche that I don't think they're really worth considering. They happened, but they haven't been a long-standing product. They were a cash grab where they licensed a brand.
Now, Hondas and Acuras are different products. You can say "oh, they're essentially the same" and if you truly believe that, I'll sell you a Core i3 processor for the price of a Core i7. Yea, they're essentially the same, but it's the differences that make one better than the other. The point is that the high end isn't about branding. The high end is about capability. Apple has shown that their iPhone will outsell any luxury-branded Android phone to rich people because some things are about capability, not a logo. Samsung's flagships will way outsell some luxury logo smartphone too. The high end here is really about devices with better capabilities and it allows companies with good hardware businesses (like ASUS and Lenovo) to build something in the Meta VR ecosystem.
It's also possibly a way for Meta to stop dumping Quest devices. They'd rather just own the ecosystem rather than doing the hardware. If they can get ASUS, Lenovo, and others to do the low-margin hardware work and pick up the tab for a lot of the marketing, that's a win for Meta. Maybe Meta simply backs out of hardware over the next 5 years if a nice third party hardware ecosystem arises.
But I think this is going to be tough with VR. When you're trying to make an immersive experience, you need a baseline of hardware. It's also easier when you know the hardware you're trying to target. Android development can be frustrating because there's so much variance in speed and capabilities. One of the reason gaming consoles exist is that targeting a small set of hardware/capabilities makes things easier. That's not to say that PC gaming doesn't exist, but it can be hard because gamers need to spend a lot of money on hardware and there's a variance in capabilities that you need to account for - and who you might simply exclude. With a phone, it's less of an immersive experience for most apps which are just displaying something. They might display it slower, the UX might be laggier, etc. but it works. VR can't be laggy.
In some ways, it feels like Meta is trying to become a game console company without having to subsidize the console. That would be big if they can pull it off. I guess in many ways this is what Steam pulled off on the PC - taking a 30% cut without having to subsidize any hardware. We'll see if Meta can do the same for VR.
I don’t disagree with your core point, but branding is about a lot more than a logo. I think iPhones do sell to rich people because of branding, because iPhone’s brand basically is “the best possible phone you can get, plus it integrates seamlessly with your other Apple devices”. And Samsung flagships’ brand is “the best Android phone”.
Porsche, or whatever, have a great and meaningful brand when it comes to cars, but that doesn’t translate to smartphones. So when you see a phone with the Porsche logo the brand isn’t really gonna do much for you.
I strongly disagree that the low end of the market is taken. XReal's Air/2 are awesome and Moore suggests we'll see awesome displays in that form factor, not even necessarily from XReal.
Because you want to compete in a different market segment.
To put this very concretely, look at Pimax. Their Crystal headset allegedly has standalone capability. All the hardware is there for it, they make this thing, they sell it -- but they don't have a standalone platform, and have no hope whatsoever of being able to develop one.
For PCVR, they just use regular standard SteamVR and OpenXR, but for standalone usage, they suddenly have to be an amazing software company and they definitely are not. Using Horizon makes a ton of sense, and makes their product more attractive and better than it is without it.
Google did this early on with android - originally the Google devices (Nexus) were lower end, and high end devices were left to other manufacturers. They've flipped around recently, but I think the Nexus line was a decent enough idea at the time.
The Nexus devices were initially badly designed high end devices, starting with the Nexus One, which was among the first smartphones with an OLED screen but had too little internal storage to be useful. There was no intentional strategy there to build a bad product, just bad product designers making bad design choices.
Nexus was supposed to be reference platform with a harmless quirk or two, not necessarily low or high end. The idea was everyone builds for Nexus and apps run everywhere.
Are they capable of selling hardware loss leaders indefinitely? If so, can they do it at a scale that matches the company's digital presence? The Google Daydream headset sitting on my shelf is skeptical.
Regardless of whether they can sell the hardware at a loss forever, they probably won't need to.
Third-party hardware is engineering labor that Meta doesn't have to pay for. In fact, it's engineering labor that will pay Meta through royalties. Cost-cutting measures developed by those third parties can easily be copied by Meta's own product, reducing the cost of future versions of the hardware. Cheaper options in the marketplace also help Meta gain market penetration without their own hardware developing a reputation for poor quality.
After a couple generations, vendor lock-in will start to set in, and they'll be able to charge more without losing customers. The aforementioned cost-cutting techniques start to pile up, too.
its partly in the article. Companies like Xbox and Lenovo want different experiences for their clients. This allows them to share the basic platform but specialise for their customer segments, eg professional or Xbox owners or whatever. Architects and civil engineers and doctors might not want normal game controllers and the default resolution. Cheap devices used in developing countries can have a lower resolution and no hand tracking. Meta wins because they can’t build 100 versions themselves, all they care about is growth of the market. Nothing is locked up yet, think of a market 100x bigger.
Seems like without some kind of software revenue sharing model it doesn't make sense. These things are consoles -- sold a cost or below cost in order to make it back on software sales.
The professional/business market, famed for being so receptive of headsets when Microsoft first introduced the technology and then when Meta made them affordable. Now that Apple has done neither, their headset is sure to find a market fit where prior efforts failed.
> Why would I, as a potential hardware maker, wish to compete in a market where the existing main producer is a mega wealthy entity that is already dumping product below cost and is capable of doing so indefinitely?
Because you want to expand your market.
Let's say you are Pimax or Bigscreen Beyond and want to target users who don't have large gaming PC's - this is an obvious option for them.
Like other comments have pointed out, I think of this as similar to how Google controls the Android OS. While theoretically open, the real useful stuff on top of Android (Google services etc) require a license from Google along with their Play store, so Google makes revenue from there.
Certainly more open (edited) than the Apple ecosystem, but still controlled by one (big) player, with a little bit of flexibility but not a whole lot.
It is not "a bit more open" than iOS, it is a completely different approach to OS development that enables wildly different results.
> While theoretically open, the real useful stuff on top of Android
That stuff is by no means necessary; I've run Android without Google services for years and it just feels like a normal tablet OS. Again, it is not "theoretically open" but in fact practically usable without any first-party services, unlike iOS.
as an apple fan i can assure you this is exactly what I think, I just prefer the results that Apple's approach enables and wish legislators would let consumers choose it as opposed to forcing the results to look more like Android
You can choose. If Apple services are all you intend to patronize, then legislation won't stop you; it does stop Apple from using their dominant position to enforce less competitive terms for their competition. If you depend on Apple's market abuse to use your iPhone, I'll just tell you now; it's time to find a new workflow.
Have you ever used a Mac? It's a great example of what the iPhone will look like, in a few years. You boot it up, log in, and open up the App Store... and it's only junk. Freemium apps with monthly microtransactions, paid trial versions of professional software you have to buy from the web, iPhone games that are barely anything more than a casino with flashy graphics... these are the developers that choose to stay with Apple when they get the choice. They'll be your only bedfellows if you're dumb enough to use an iPhone that only Apple curates.
Amazon used AOSP to create tons of their products. Even if most Android devices have the Play Store, there are successful variants that don't. And I'd even include Meta's Quest line here: every headset since the Go has the ability to sideload apks using standard Android tools.
My quest (1) I bought on launch day got an OS update and now I have to find my old credentials to log in (and thus accept some (probably) draconian EULA, just to enable developer mode to side load apps on there. You can't just plug a USB stick in the side and copy paste them to "side_loaded_apps" dir it's still a ridiculous task of doing backflips through flaming hoops to use it as an open device. And it may yet again reset my login.
You’re discounting the huge number of android devices that use it as a base OS. E.g. Amazon and Peloton use android without Google services for consumer devices.
These are devices built with a specific use case in mind that need an operating system that is easy to develop for. Non-Google versions of Android have struggled to make much headway in markets like smartphones. Even Amazon's own phone flopped pretty hard.
The thing about Android is that a device doesn't have to make headway by selling 100 million units plus to continue being adapted to many different types of devices.
In any case, the Play store can be sideloaded on every Android device even if it isn't officially supported.
They are not looking to make margins on the OS or the hardware. They want adoption and distribution. The money will be made later on extracting value from the ecosystem they are trying to build. Whether that is with a higher end product later on, monetising the OS/ecosystem later on with ads or app fees is not relevant at Thai stage. What they are trying to do is to build a new ecosystem that they are entrenched and that they control firmly. They are trying to build the android of VR to put it simply
> So there’s no kind of existential danger to Quest here, but it remains to be seen if the hardware licensees can bring anything relevant to the table either.
How does Meta make its money? Advertising.
Licensees bring actual eyeballs to the table and eat the hardware costs fighting amongst themselves selling commodity hardware and Meta re-position Quest as a 'premium' product that they might actually make a little money on.
>Whereas for Meta, the Quest hardware has always been sold at breakeven or even as a loss leader (a few years ago they actually raised the price of the Quest 2 to cut further losses).
Indeed, and that means they'll seek a return on their investment from continued invasive surveillance, emotional manipulation, and cramming ads everywhere.
The other important difference between Apple then and Meta now is that Apple wasn't in a position that subjected it to possible (government) regulation. Meta has to try to play nice. Perhaps few vendors bite? But when the regulation noise increases - and it will - Meta can say it tried.
There’s an important difference though: Apple made all their money on Mac hardware margins which the nimble clone vendors could undercut. Whereas for Meta, the Quest hardware has always been sold at breakeven or even as a loss leader (a few years ago they actually raised the price of the Quest 2 to cut further losses).
So there’s no kind of existential danger to Quest here, but it remains to be seen if the hardware licensees can bring anything relevant to the table either.