Google's return to mixed reality marks the beginning of an exciting competition with Meta, Apple, and Pico – Creative image: Xpert.Digital
VR and AR are making a comeback – the Moohan project is bringing fresh momentum to the tech world.
Google, Meta and the future of AR/VR: An exciting competition
After recent pronouncements of decline for virtual and augmented reality, the race is on again with Samsung and Google's joint Moohan project. Major technology companies like Google, Meta, Apple, and Pico are at the center of this exciting competition. But what exactly is happening in the industry right now, 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.
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Meta Quest 3 and 3S: Price-performance ratio as a trump card?
Meta has established itself as one of the leading platforms in the VR sector with its Quest series. The Meta Quest 3, in particular, is attracting attention with its impressive specifications and competitive pricing. Equipped with the powerful Snapdragon XR2 Gen 2 processor, the headset offers a resolution of 2064 x 2208 pixels per eye. Its slimmer design – approximately 40% thinner than its predecessor, the Quest 2 – and the integration of mixed reality features deliver a new level of user-friendliness and immersion.
The Quest 3 starts at $499 for the 128GB version and rises to $649 for the 512GB model. Particularly noteworthy is the color passthrough feature, which seamlessly blends the real and virtual worlds.
At the same time, a more affordable option is offered with the Quest 3S. For just $299, users get a solid VR experience, albeit with reduced specifications such as Fresnel lenses instead of modern pancake lenses and a slightly lower resolution of 1832 x 1920 pixels per eye. This strategy makes VR technology accessible to a wider audience and lowers the barriers to entry for mixed reality experiences.
Assessment:
The Meta Quest 3 and Quest 3S offer a promising price-performance ratio. With these models, Meta could not only outshine the competition but also attract new users who have previously shied away from VR due to high prices or a lack of technology.
Google and Android XR: A second chance in the AR/VR field?
Google is once again attempting to gain a foothold in the AR/VR sector. After rather disappointing attempts like Google Glass and Daydream VR, the company now appears to be making a structured fresh start 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.
A major potential lies in the planned support for hardware manufacturers like Samsung, which could potentially allow devices to reach the market as early as 2025. Google could thus lay the foundation for a unified ecosystem that works across devices and offers advantages to both developers and users.
Problems and challenges:
Although the vision behind Android XR sounds promising, significant challenges remain. Google has had to contend with internal restructuring and hardware development delays in the past. Furthermore, it remains questionable whether the platform can compete against established rivals like MetaHorizon OS. The success of Android XR will depend crucially on Google's ability 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 up its Horizon OS operating system to third-party developers. This strategic move could fundamentally change the market. Manufacturers like Pico or Lenovo would be able to use the mature Horizon OS to offer their own devices. The advantages are obvious:
- Greater diversity: Wide availability of the operating system could drastically 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?
Currently, Pico uses its own Android-based operating system, which is considered less mature compared to Meta Horizon OS. Switching to Horizon OS or partnering with Google's Android XR could help Pico resolve existing software issues and become more competitive. For companies like Pico, this could be a much-needed innovation to keep pace in the dynamic market.
Pico's latest device, the Pico 4 Ultra, was launched in September 2024 and boasts powerful hardware, including a dual 4K+ display, full-body tracking, and advanced mixed-reality capabilities. Marketed as a direct competitor to the Meta Quest 3, it targets budget-conscious users, as it's available for around €599. Despite its technical strengths, however, Pico struggles with a less extensive app store compared to Meta, which limits the ecosystem's appeal to users.
Nevertheless, Pico remains a relevant challenger in the MR market, distinguished by innovative technologies such as full-body tracking. However, the company faces the challenge of expanding its content and user base 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 now focusing its products on businesses and professional applications. While HTC Vive remains a major player in the gaming and VR markets, it holds 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), held a 51% market share in the global AR segment in the third quarter of 2023, making it the market leader in this field. By the beginning of 2024, Xreal had sold over 350,000 AR glasses worldwide, particularly models from its Air series, which have enjoyed great popularity.
The influence of Apple: A silent revolution?
While Google and Meta are aggressively pursuing their strategies in the AR/VR sector, Apple remains traditionally more reserved in its approach, but by no means less influential. With the introduction of the Apple Vision Pro, the company has demonstrated its focus on premium quality and innovation. The Vision Pro is less a pure VR device and more an AR platform suited for professional applications.
The high price and exclusive positioning make it clear that Apple is focusing on quality, not quantity, for the time being. Nevertheless, Apple's technological leadership could serve as a blueprint for the entire industry and set new standards in the long term.
Market shares of current mixed-reality (MR) headsets
Market shares for current mixed reality (MR) headsets show a clear dominance of Meta, while Apple has also captured significant market share with the introduction of the Vision Pro. Here are the key findings:
Market shares and manufacturers
1. Meta
- Meta dominated the AR/VR headset market with a 60.5% share in the second quarter of 2024. The Quest 2 and Quest 3 contributed significantly to this success.
- Meta headsets account for over 68% of the market share on SteamVR platforms alone.
2. Apple
- With the Vision Pro, Apple was able to capture approximately 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 (the parent company of TikTok), is also a significant player in the mixed reality market. According to recent reports, Pico holds approximately 8% market share, positioning itself as Meta's biggest competitor.
3. Other providers
- Xreal and HTC are among the other relevant players, together forming 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 estimated to be worth approximately USD 4.04 billion in 2024 and is expected to grow to USD 26.20 billion by 2029 at a compound annual growth rate (CAGR) of 45.34%.
- North America remains the largest market for mixed reality technologies, while the Asia-Pacific region 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 such as the Quest series.
- IDC predicts an increasing merging of VR and AR technologies towards Mixed Reality, with pure VR devices potentially losing importance in the long term.
Overall, Meta remains the dominant provider in the mixed reality market, while Apple is increasingly gaining market share through innovations like the Vision Pro. Competition will intensify further in the coming years with the emergence of new players such as Samsung and Google.
A look into the future: Where is the journey headed?
The AR/VR industry is at a crossroads. Meta and Google are pursuing different approaches to dominate the market, while Apple scores points with innovation and exclusivity. Manufacturers like Pico have the opportunity to benefit from open platforms like Meta Horizon OS or Android XR and strengthen their own position.
What could come next?
- Expanding platform ecosystems: Open operating systems could lower market entry barriers for smaller providers.
- New hardware innovations: Particularly in the field of mixed reality, further advances are expected that will make the connection between the real and virtual worlds even more seamless.
- Price reductions: More affordable devices like the Meta Quest 3S could make the technology more accessible to the masses.
- Growing developer community: The more companies rely on unified 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 face the challenge of not only delivering compelling technology but also winning over and inspiring users. One thing is certain: competition drives innovation – and that could ultimately only benefit consumers.
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