meta quest

How Meta (Quest) is Failing to Deliver for Both their Business Customers and Shareholders in 2022


Synopsis Meta Quest 2 is among the best standalone VR devices on the market for business use, but going forward they have no more supply for Oculus for Business throughout all of 2022 and perhaps even going into 2023. The current non-upgradable consumer version that’s available from select IT resellers and retail continues to require a personal Meta-Facebook account, making it a poor fit for most business use cases (among other key missing features).  Updates for the current devices (beyond security patches) seem to have also stopped, with core features such as casting only working on older versions of Chrome, forcing users to revert to previous browser versions and thus ironically causing new security vulnerabilities. This leaves existing customers unable to scale and new ones unable to adopt the technology. Thus creating an unprecedented opportunity for companies like HTC & Pico to take over the Meta business customer base, as well as a major opening for companies like Lenovo, Microsoft, and HP to roll out competitive business-friendly standalone devices. Most damaging perhaps is that it demonstrates to a market that already has a negative sentiment towards Meta an inability to sustain supply & support business adoption. Not to mention cutting into Meta’s market cap by around 7.45 billion dollars, who’s already reeling from its recent market cap loss of over 40% compared to August 2021. Quest clients & B2B developers need to take a serious look at moving towards more hardware-agnostic software & SDKs. This way they avoid future volatility that could be caused by hardware vendors. A good place to start is to seriously consider and potentially migrate to OpenXR. It’s Not All Bad News for Quest I realize there are some harsh words in my opening synopsis but it’s coming from someone who is a big supporter of Quest and not without a small investment/stake in them and their peer’s success in this fast-growing industry of ours. To prove my point, if you open our company website, the first thing you are greeted with is a professional wearing an Oculus Quest 2. Since the release of the Oculus Quest, 90% of our enterprise deployments have been on this device adding up to several million in hardware sales. Internally, our company daily uses 45 Quest 2 for Business units, 30 for the development & admin teams, and 15 outbound for sales demos. VR Vision has invested over seven figures in developing a custom SDK for VR Training on the Quest that’s now almost fully transitioned to OpenXR. We even have a mutual VR for Training Case Study as an ISV featured on Oculus for Business, though that is now moved on to the way back machine internet archives as it is no longer linked on the OFB website, along with their previous brand & business structure.  The Quest 2 hardware & software at the time of writing offers some of the best value in western markets. Their competition is close at their heels, but still lagging in areas such as user experience and new features. A Missed Financial Opportunity As we look at the below financial breakdown, some general assumptions will be made. The purpose of this is to show that Meta will suffer a significant revenue loss by cutting the supply of the existing business units for a full year. Not to mention the loss of goodwill. IDC estimates Meta sold between 5.3 million and 6.8 million VR devices in 2021. Qualcomm CEO Cristiano Amon sets it at 10 million based on an average of third-party market size estimates from industry analysts. The fact that they recalled 4 million units in July 2021 would make the upper 10 million for the year a most likely quantity. The cost of a consumer 256GB Quest 2 is $399, compared to that of an Oculus for Business which was $799 with an additional (now waived) $180/year. So, the total cost per device would have been $1,159 if organizations opted to keep the device for two years, that’s the duration of the warranty. A difference of $760 per device or a 290% increase in unit price.  I can’t guess the specific market size for Quest for Business, but let’s be conservative and estimate that it’s 10% of the total unit sales, although other reports would have the commercial application segment at 50%. This rounds up at 1 million units. And if we account for the industry HMD CARG of 44.8% that would amount to a best-case scenario of ~1.44 million units sold towards the consumer market instead of business for an estimated sales loss of 1.092 billion dollars. As of Feb 2022 Meta Platforms (FB) has a PS ratio of 5.174 so that’s a potential market cap loss of 7.45 billion dollars, no small number even for a company of Meta’s size especially considering how avoidable it all could have been. Meta Quest Competitors As of writing this article, there are two main B2B hardware competitors to Meta Quest – The first is HTC, with their Focus 3 headset, and Pico, with the Neo 3 (and newly released Pico Neo 3 Link). I won’t go into an in-depth comparison of the devices and companies but will give a brief description of my personal and company experience in using both. Keep in mind that Meta Quest invests more in R&D a year than the combined market cap of both key competitors. That said they do share a lot of advantages and disadvantages, both offer incredible B2B Sales, Marketing, and Technical support for both clients and ISVs. Both struggled at times with precision tracking (the Pico more than the Focus) causing some lag, even in low poly scenes. Both are much more expensive than the Quest 2. They also have a more open platform that allows developers to be more creative with their applications. Both companies have an incredible opportunity to secure and dominate market share. To do this the only thing they can do within such a tight time frame is to aggressively cut costs – support the ISV community and organizations developing their apps to migrate over to their hardware. It may How Meta (Quest) is Failing to Deliver for Both their Business Customers and Shareholders in 2022

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