Analysts Weigh In as Meta Unveils AR Glasses Prototype and New VR Headset

Meta Connect, a key event focused on developers, took place on September 25, hosted by Meta Platforms. During this event, the tech giant revealed an array of new hardware and software products.

One of the standout announcements was the Quest 3S, the latest virtual reality (VR) headset from Meta’s Reality Labs. This new headset is priced at $299, significantly lower than its predecessor, the Quest 3, which was launched at $499 last year. The Quest 3S is set to become available on October 15, and Meta has promoted it as a versatile device suitable for various activities such as watching movies, using VR fitness applications, and gaming. The company aims to position the headset as a multitasking tool, potentially challenging Apple’s Vision Pro headset, which carries a hefty price tag of $3,499.

Additionally, Meta introduced a new prototype of augmented reality (AR) smart glasses and provided updates for its Meta AI chatbot. CEO Mark Zuckerberg showcased the Orion prototype, which will not be available for purchase but will serve as an internal tool as the company develops consumer-ready AR glasses. Although no release timeline was specified, Zuckerberg expressed hopes that Orion will evolve into Meta’s first fully functional AR glasses. Orion is designed for various applications, including gaming, managing multiple windows, and facilitating videoconferences with realistic avatars.

The company also markets Ray-Ban Meta smart glasses, launched in collaboration with EssilorLuxottica in 2023, which include a built-in camera and tiny speakers. However, these glasses do not have displays. At the Connect event, new functionalities for the Ray-Ban Meta glasses were announced, such as real-time translation for signs in different languages, QR code scanning, and information extraction from images. The glasses can even help users remember useful details, like the location of their parked car.

Moreover, Zuckerberg unveiled numerous updates to Meta AI, allowing users to interact with the chatbot via voice commands in addition to text inputs. This voice feature will enable users to engage in tasks such as asking the AI to take a photo with their smartphones. The rollout for this feature is expected in the coming month across various platforms, including WhatsApp, Instagram, Facebook, and Messenger in select countries.

Meta’s new capabilities for the chatbot are based on the company’s AI framework, Llama. Recently, a newer version named Llama 3.2 was announced.

Analysts’ Insights from the Meta Connect Event:

• Citi: They expressed increased confidence in Meta’s ability to enhance engagement and monetization through its new AI products and devices, suggesting that the updated Ray-Ban Meta Smart Glasses are a must-buy and identifying the Orion glasses as a meaningful opportunity for the AR space.

• Bank of America: They pointed out that AI Glasses might have a more extensive market potential compared to VR goggles. They noted renewed optimism surrounding Meta’s prospects in personal computing devices, highlighting the successful innovation around AI capabilities that could alleviate concerns about the company’s long-term value.

• Stifel: They found the announcements regarding Llama and Meta AI promising, suggesting that Meta is well-positioned in the tech race. They speculated that the Orion prototype may illustrate a broader vision for the Metaverse, indicating a potential slowdown in Reality Labs investments as practical use cases emerge.

• Jefferies: They reported a positive outlook on Meta’s consumer and enterprise AI prospects, noting substantial traction for META.AI and potential for new capabilities to enhance user engagement.

• Roth MKM: They emphasized the significance of the AR prototype announcement after a decade of development, stating that substantial investments have been made in AR. They foresee that the next few years may witness a slowdown in growth for incremental spending in Reality Labs as a prototype is finally realized.

Overall, Meta Connect highlighted a range of innovative developments, positioning Meta as a significant player in both the VR and AR markets.