The Dawn of Consumer AR Devices: Meta's Quest 3 Sets the Stage

The excitement surrounding virtual reality, which peaked with the launch of the Oculus Rift in 2016, has given way to a more muted reality. Despite rapid advancements in VR technology, consumer adoption has been slow. The arrival of more user-friendly devices like the Meta Quest and PlayStation VR has not significantly altered this trajectory, with many buyers using their headsets for only a few hours. As a result, the focus has shifted to augmented reality, which promises to be more practical, appealing, and expansive in its applications. AR, also known as mixed reality, overlays virtual elements onto the real world through a headset, a concept that has become a technological holy grail. However, no fully functional AR headset has been released to the consumer market yet. Microsoft's HoloLens and Magic Leap's efforts, while impressive, have not led to widely available consumer products. This landscape is about to change with the launch of Meta's Quest 3, a standalone VR headset with advanced AR capabilities, and Apple's Vision Pro, albeit at a steep price of over $3,000, which stretches the definition of a consumer launch. Both devices employ Passthrough AR, using high-fidelity cameras to pass through a representation of the real world, augmented with virtual objects and overlays. This differs from 'true' AR devices like HoloLens, which project virtual elements directly onto see-through lenses. The distinction may or may not be significant, depending on how camera technology evolves. The imminent release of these devices marks the beginning of the AR space's expansion, with two tech giants, Meta and Apple, set to launch products in this area. Their strategies differ; Meta is adding AR to its existing VR lineup with a more affordable price point around $500, while Apple is making a larger bet on AR as a new category with a premium-priced device. Both face the challenge of a skeptical public, whose enthusiasm for VR was lukewarm, with many viewing it as a novelty rather than a necessity. The reaction to AR remains to be seen, but the backlash against Google Glass serves as a cautionary tale about the limits of social acceptance for certain technologies in public spaces. AR has significant expectations to meet, positioned as a technology that leverages VR's advancements to offer broader applicability and appeal. The interest in AR among investors and analysts is partly driven by the search for the next technological leap forward, akin to the impact of smartphones. However, for AR to deliver such a boom, it must become a general-purpose computing device that is integral to daily life, not just a display or a tool with niche applications. This is a challenging criterion, and it's unclear if AR can fulfill it. While AR has potential applications in gaming, productivity, creativity, and more, these remain hypothetical. Demos have shown the capabilities of the technology, but actual use cases are less clear. The success of AR will depend on whether it can offer something that resonates with a wide audience, beyond the initial excitement of new technology. The contention that building a decent AR platform will attract developers who can change the world is based on the smartphone model, where apps transformed society, commerce, and culture. However, the appeal of smartphones was evident from the start, even before apps were developed. Smartphones solved real problems and opened new possibilities, making them instantly appealing. It's less clear if AR has the same inherent appeal, which could pose a significant barrier to its adoption. Furthermore, the large gap in price and functionality between Meta and Apple's devices could lead to initial demand falling between two stools, with Apple's overpriced device setting expectations that Meta's more reasonably priced option cannot meet. Ultimately, the real test for Meta's Quest 3 and Apple's Vision Pro will be to demonstrate to consumers why they should invest in these devices from day one, regardless of potential future applications. Growing the installed base from the outset is the challenge, and winning over a skeptical world will require more than vague promises of a hypothetical future.