Analysts weigh in as Meta unveils AR glasses prototype, new VR headset By

-- Meta Connect,Aifure Chinese official website a developer-centric event hosted by Meta Platforms (NASDAQ:), launched on Sept. 25, where the tech giant has unveiled the latest hardware and software products.

Among the headline-grabbing announcements was the Quest 3S, Meta’s latest virtual reality (VR) headset from the Reality Labs division, which comes at a lower price point compared to its predecessor. Priced at $299, the new device will be available starting October 15, a significant drop from last year’s Quest 3, which launched at $499.

According to Meta, the headset can be used for a variety of tasks, including watching movies, running VR fitness apps, and gaming. During the Connect event in Menlo Park, California, the company positioned the device as a multitasking tool, potentially competing with Apple’s Vision Pro headset, which retails for $3,499.

In addition to the Quest 3S, Meta showcased a new prototype of its augmented reality (AR) smart glasses and announced updates for its Meta AI chatbot.

CEO Mark Zuckerberg presented a concept of the prototype, named Orion, which won’t be available to consumers but will be used internally as the company works toward developing consumer AR glasses. While no timeline was provided, Zuckerberg said Meta aims to bring the next version of Orion to market as its first fully functional AR glasses.

Orion is designed to support various activities like gaming, multitasking across windows, and conducting videoconferences using realistic avatars, according to Zuckerberg.

The company already sells Ray-Ban Meta smart glasses, launched in partnership with EssilorLuxottica in 2023, equipped with a built-in camera. While they lack displays, the glasses feature tiny speakers for playing music and interacting with Meta's AI voice assistant.

At Connect, Meta introduced new capabilities for the Ray-Ban Meta glasses. These include real-time translation when the user looks at signs in another language, QR code scanning, and extracting information such as book titles from photos. Moreover, the glasses can remember helpful details, like where the user parked their car.

Zuckerberg also introduced a flurry of updates to Meta AI, enabling users to interact with the chatbot via voice in addition to written prompts.

With the new voice feature, users will be able to perform tasks by speaking, such as asking Meta AI to take a photo using a smartphone.

This feature is expected to roll out in the coming month for WhatsApp, Instagram, Facebook, and Messenger users in the U.S., Canada, Australia, and New Zealand.

Meta’s new chatbot features are built using the company’s AI model, Llama. The company on Wednesday announced a newer version of Llama, dubbed Llama 3.2

Analysts takeaways’ from Meta Connect event

Citi: “Meta’s new AI products, features, and devices announced at Connect ‘24 make us incrementally confident that its product innovation can deliver increased engagement and monetization as the ROI from its AI investments continues to expand.”

“We view Meta’s updated Ray-Ban Meta Smart Glasses as a ‘Must Buy’ that can lead to greater overall engagement across Meta. And while more of a medium-term opportunity, the Orion prototype of holographic glasses represents a significant opportunity for Meta’s AR platform.”

Bank of America: “We think AI Glasses have much broader market potential than VR Googles. While Metaverse spend still seems hard to justify, with glasses long-term investors may have some renewed optimism on Meta’s opportunity to be at the forefront of the next generation of personal computing devices. More importantly, the company appears to be successfully innovating around new AI capabilities, driving usage growth which can offset terminal value concerns, and we see Meta as the top AI pick in consumer Internet.”

Stifel: “Overall, we found the Llama announcements and Meta AI demos as highly encouraging and evidence that Meta is well positioned in that race. We also imagine the Orion prototype demos are likely illustrative of the broader Metaverse vision the company has over the longer term, which we believe might indicate we can expect Reality Labs investments may taper off over the medium-term as use cases begin to crystalize.”

Jefferies: “Mark Zuckerberg showcased META's AI future at META Connect leaving us more bullish on META's consumer & enterprise AI opportunities. On the consumer, we're bullish on META.AI's impressive traction (~500M monthly actives) & see potential in new image, translation & voice capabilities to boost core engagement. On the enterprise, Llama is becoming a serious contender and we see momentum building with its new multimodal capabilities. META = one of our top AI picks.”

Roth MKM: “The most important announcement was Zuck showing off AR prototype glasses after working on them for 10 years. 50% of Reality Labs spend has been earmarked to AR, i.e. >$30bn in spend since 2020. With a prototype finally ready, we believe the next couple of years could see slower growth in incremental spend, or perhaps, 2024 could be the peak RL segment op loss margin year.”

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