With Google's return to mixed reality, an exciting competition begins with Meta, Apple, Pico, HTC and Xreal

Google, Meta and the future of AR/VR: An exciting competition

After the swansong of virtual and augmented reality recently, the race is on again with the joint Moohan project from Samsung and Google. Large technology companies such as Google, Meta, Apple and Pico are at the center of an exciting competition. But what exactly is currently happening in the industry and what innovations can we expect? Below we take a close look at the latest trends and technologies, as well as the potential impact of these developments.

Suitable for:

• Samsung and Google announce mixed reality headset “Project Moohan” to compete with Apple’s Vision Pro

Meta Quest 3 and 3S: Price-performance as a trump card?

With the Quest series, Meta has established itself as one of the leading platforms in the VR sector. The Meta Quest 3 in particular is attracting attention with its impressive specifications and competitive prices. The glasses are equipped with the powerful Snapdragon XR2 Gen 2 processor and offer a resolution of 2064 x 2208 pixels per eye. The slimmer design - around 40% thinner than the previous Quest 2 - and the integration of mixed reality functions achieve a new level of user-friendliness and immersion.

The Quest 3's price starts at $499 for the 128GB version and rises to $649 for the 512GB model. Particularly noteworthy is the color passthrough function, which allows real and virtual worlds to harmoniously merge.

At the same time, a more affordable version is offered with the Quest 3S. For just $299, users get a solid VR experience, albeit with stripped-down specs like Fresnel lenses instead of the modern pancake lenses and a slightly lower resolution of 1832 x 1920 pixels per eye. This strategy makes VR technology more widely accessible and lowers the barriers to entry for mixed reality experiences.

Assessment:

The Meta Quest 3 and the Quest 3S offer a promising price-performance ratio. With these models, Meta could not only outperform the competition, but also attract new users who have previously stayed away from VR due to high prices or a lack of technology.

Google and Android XR: A second chance in the AR/VR sector?

Google is trying to gain a foothold in the AR/VR space again. After rather disappointing attempts such as Google Glass and Daydream VR, the company now seems to be daring to make a structured restart with the Android XR platform. Developed in collaboration with Samsung, the platform aims to revolutionize Extended Reality (XR) – a collective term for AR and VR – through AI-powered features and seamless integration with Android apps.

There is great potential in the planned support of hardware manufacturers such as Samsung, which could potentially bring devices onto the market as early as 2025. Google could thus create the basis for a unified ecosystem that works across devices and offers advantages to developers and users alike.

Problems and challenges:

Although the vision of Android XR sounds promising, there are still significant challenges. Google has had to struggle with internal restructuring and delays in hardware development in the past. It also remains questionable whether the platform can hold its own against established competition such as Meta Horizon OS. The success of Android XR will depend crucially on whether Google manages to create a stable and attractive ecosystem.

Meta Horizon OS: An open operating system as a game changer?

Another exciting approach from Meta is opening its Horizon OS operating system to third parties. This strategic maneuver could change the market forever. Manufacturers like Pico or Lenovo would be able to use the mature Horizon OS to offer their own devices. The advantages are obvious:

• More variety: Widespread availability of the operating system could dramatically increase the number of AR/VR devices available on the market.
• Greater incentives for developers: A unified operating system would make developers' work easier and increase the variety of apps and applications.

What does this mean for Pico?

Pico currently uses its own Android-based operating system, which is considered less sophisticated compared to Meta Horizon OS. A switch to Horizon OS or a collaboration with Google's Android XR could help Pico solve existing software problems and become more competitive. For companies like Pico, this could be a much-needed innovation to compete in the dynamic market.

Pico's latest device, the Pico 4 Ultra, launched in September 2024 and offers powerful hardware including a dual 4K+ display, full-body tracking and advanced mixed reality features. It is marketed as a direct competitor to Meta Quest 3 and is aimed at budget-conscious users, as it is available for around €599. However, despite technical strengths, Pico struggles with a less extensive app store compared to Meta, which limits the ecosystem's attractiveness to users.

Nevertheless, Pico remains a relevant challenger in the MR market, characterized by innovative technologies such as full-body tracking. However, the company faces the challenge of expanding its content and user base in order to remain competitive with Meta in the long term.

HTC Vive and Xreal

HTC Vive has largely withdrawn from the mass market (B2C) and is targeting its products at businesses and professional applications. In the gaming and VR market, HTC Vive is still mentioned as one of the main players, but with a smaller market share compared to Meta or Pico.

Xreal is a major player in the augmented reality (AR) market and, according to IDC (market research and consulting firm), had a market share of 51% in the global AR segment in the third quarter of 2023, making the company the market leader in this area. As of early 2024, Xreal has sold over 350,000 AR glasses worldwide, particularly the Air series models, which have enjoyed great popularity.

Apple's Impact: A Quiet Revolution?

While Google and Meta are aggressively pushing their strategies in the AR/VR space, Apple remains traditionally cautious in its approach, but by no means less influential. With the introduction of the Apple Vision Pro, the company has shown that it is focusing on premium quality and innovation. The Vision Pro is less of a pure VR device and more of an AR platform that is suitable for professional applications.

The high price and exclusive positioning make it clear that Apple is not focusing on quantity for the time being, but on quality. Nevertheless, Apple's technological leadership could represent a blueprint for the entire industry and set new standards in the long term.

The market shares of current mixed reality headsets (MR)

The market shares of current mixed reality (MR) headsets show a clear dominance of Meta, while Apple has also captured significant shares with the introduction of the Vision Pro. Here are the key takeaways:

Market shares and manufacturers

1. Meta

•  Meta dominates the AR/VR headset market with a share of 60.5% in the second quarter of 2024. The Quest 2 and Quest 3 contribute significantly to this success.
• On SteamVR platforms alone, meta headsets account for over 68% market share.

2. Apple

• With the Vision Pro, Apple was able to capture around 9.1% of the global AR/VR headset market in 2024 and position itself as the second largest provider.

3. Pico

• Pico, a company owned by ByteDance (TikTok's parent company), is also a major player in the mixed reality market. According to recent reports, Pico holds about 8% market share, positioning itself as Meta's biggest competitor.

3. Other providers

•  Xreal and HTC are among the other relevant players, and together they form the top 5 in the market.
• Companies like Microsoft and Varjo focus on professional applications and have a strong presence in niche markets.

Market development

• The global mixed reality market is valued at approximately $4.04 billion in 2024 and is expected to grow at a compound annual growth rate (CAGR) of 45.34% to $26.20 billion by 2029.
• North America remains the largest market for mixed reality technologies, while Asia Pacific is experiencing the fastest growth.

Trends and challenges

• The average selling price of mixed reality devices has increased due to Apple's Vision Pro, making the technology less accessible to the mass market. At the same time, companies like Meta are focusing on more affordable devices like the Quest series.
• IDC predicts an increasing fusion of VR and AR technologies towards mixed reality, although pure VR devices could become less important in the long term.

Overall, Meta remains the dominant provider in the mixed reality market, while Apple is increasingly gaining market share through innovations such as the Vision Pro. Competition will continue to intensify in the coming years due to new players such as Samsung and Google.

A look into the future: where is the journey going?

The AR/VR industry is at a crossroads. Meta and Google take different approaches to dominate the market, while Apple scores with innovation and exclusivity. Manufacturers like Pico have the chance to benefit from open platforms such as Meta Horizon OS or Android XR and strengthen their own position.

What could come next?

1. Expanding platform ecosystems: Open operating systems could lower market entry barriers for smaller providers.
2. New hardware innovations: Further progress can be expected, particularly in the area of ​​mixed reality, which will make the connection between the real and virtual world even more seamless.
3. Price reductions: With more affordable devices like the Meta Quest 3S, the technology could become more suitable for the masses.
4. Growing developer community: The more companies rely on uniform operating systems, the more extensive the range of apps and applications becomes.

The coming years will be crucial. Companies like Meta, Google, Apple and Pico are faced with the challenge of not only being technologically convincing, but also winning the acceptance and enthusiasm of users. One thing is certain: competition drives innovation – and that could ultimately only benefit consumers.

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