By Katie Paul
MENLO PARK, Calif. (Reuters) – Facebook Inc’s Meta Platforms Inc showed off the first working prototype of its augmented reality headset, called Orion, at its annual Connect conference on Wednesday as the California-based company outlined its ambitions for products that will bring the virtual world into the real world.
“This is the physical world with holograms,” Chief Executive Mark Zuckerberg said after pulling out his oversized black glasses from a metal case brought to him on stage. The company’s shares rose 2.2% to a new record high.
The Orion glasses are made of magnesium alloy and powered by Meta’s custom-designed silicon. Users will be able to interact with the glasses through hand tracking, voice, and a wrist-based neural interface. Zuckerberg called Orion a “developer’s kit” and said Meta plans to work on making them smaller, sleeker, and less expensive for consumers later.
Big tech companies have been working on augmented reality devices for years, though some of the most notable have been flops, such as the infamous Google Glass.
The AR reveal has been a long time in the making for Zuckerberg, who framed AR technology as a kind of showpiece when he first pivoted the world’s largest social media company toward building immersive “metaverse” systems in 2021. High development costs and technological hurdles have hampered product delivery.
Paolo Pescatori, an analyst at BB Foresight, said there was no doubt about Meta’s ambition to make virtual and augmented reality products as accessible and affordable as possible, but added that users “are still wary of AI” and need some convincing.
Meta plans to ship its first commercial AR glasses to consumers in 2027, by which time technical breakthroughs should drive down the cost of production, a source said ahead of the event.
Zuckerberg showed that the AR glasses could display multiple small windows with WhatsApp and Messenger text, video calls and Instagram videos, though the presentation offered few details about the device’s capabilities. The videos showed positive feedback from testers, including Nvidia (NASDAQ:) CEO Jensen Huang.
Meta also announced a suite of software improvements to the smart assistant that drove interest in Ray-Ban Meta smart glasses, making it possible for users, for example, to scan QR codes and play music from Spotify (NYSE:) in response to voice prompts.
Later this year, the company plans to add video capabilities and the ability to do instant translation between English, French, Italian and Spanish.
Facebook, the social media company, kicked off its Connect event with an expanded bet on artificial intelligence, announcing a slew of new product offerings for its ChatGPT-like chatbot and planning to start automatically injecting bot-generated profile pictures into people’s Facebook and Instagram feeds.
Meta also announced an early version of its Quest line of mixed reality headsets, the Quest 3S.
Among the AI updates announced was a voice upgrade to the digital assistant, called Meta AI, which will now respond to voice commands and offer users the option to make the assistant sound like celebrities including Judi Dench and John Cena.
“I think voice will be a more natural way to interact with AI than text,” Zuckerberg said.
The company said that more than 400 million people use Meta AI monthly, including 185 million who return to it weekly.
In keeping with its strategy of sharing the AI models that power its digital agents for free use by others, Meta has released three new versions of its Llama 3 models. Two are multi-modal models, meaning they can understand both images and text, while the third is a basic text-only model capable of running entirely on a user’s device, a key privacy feature.
Meta has struggled to overcome technical challenges related to its AR project in recent years, prompting the head of the company’s metaverse-oriented Reality Labs division to admit last year that a viable product it could bring to market “is still a few years away — a few years, at the very least.”
The company has invested tens of billions of dollars in AI, AR, and other metaverse technologies, pushing its 2024 capital expenditure forecast to a record high of $37 billion to $40 billion.
According to the latest disclosures, its Metaverse unit Reality Labs lost $8.3 billion in the first half of this year. It lost $16 billion last year.
Amidst the excitement around emerging AI technology, the company announced at its Connect conference last year that it would be adding an AI-powered digital assistant to Ray-Ban glasses, turning a forgotten device into the most popular AI wearable on the market.
While Meta hasn’t disclosed sales figures for the smart glasses, the CEO of Essilor Luxottica, the maker of Ray-Ban glasses, said this summer that the new generation of glasses could outsell the old ones in two years in a few months. Market research firm IDC estimates that more than 700,000 pairs of the glasses have been shipped since the update last year.
The Quest 3S headset is scheduled to hit stores on October 15, and will be offered in two storage sizes, the smaller one priced at $299.99 and the other at $399.99.
With the launch, the company is discontinuing its older Quest 2 and high-end Quest Pro devices, while also cutting the price of the more powerful Quest 3 it introduced last year from $649.99 to $499.99.