Three Trends That Shape XR Today: Apple & Meta Scenarios

7 min read May 14, 2024

State-of-the-art competition strategies are essential in the most innovative markets, and the extended reality XR market is at the forefront of these trends. The XR market reached 29.26 billion U.S. dollars in 2022 and 41.22 billion U.S. dollars in 2023, demonstrating progressive growth, according to Statista, and is projected to surge to $100.77 in 2026. Notably, leading players like Meta and Apple are not just adapting to global technology trends such as AI capabilities and unique forms of collaboration, but are also focusing on establishing unique ecosystems. These strategies are not only empowering their solutions with AI but also using integrated product development to compete with other significant rivals, thereby shaping the market landscape. Let’s delve into the trends they are leveraging to gain an edge in this dynamic market.

As we observe the recent news from Meta and Apple, both companies follow the three most prominent trends that promise long-term advantages. The first is the AI race that empowers companies to introduce (or prepare for the launch of) AI-driven solutions, elevating their XR capabilities with the power of their AI models. The second one is ecosystems, with Apple expanding its own and Meta starting to build its unique one, using alliances and partnerships as its cornerstone. Thirdly, by utilizing integrated product development (IPD) which implies bringing together all crucial participants, such as engineering, design, manufacturing, and marketing, to collaborate as one cohesive team, both obtain the possibility to compete, for example, with Google, which had no hardware in its product portfolio at the time.

Now, let’s see how they do it in practice!

Apple: ecosystem framework, device-based AI, IPD effectiveness model

The recent Apple event reaffirmed the company’s commitment to the most influential XR market trends. Apple highlighted its notable emphasis on using Apple Vision Pro which became a vital part of its spatial ecosystem, adding to it new iPad and M4 chips that, as many experts presume, will pave the way for the following launches of AI-centered devices. Apple’s recent emphasis on enterprise, healthcare, and content creation, particularly through the Apple Vision Pro, demonstrates the remarkable capabilities of the headset, for example, Automotive, where it showcased tracking experiences and training services for enterprise technicians. Also, Apple showed how Apple Vision Pro and XR technology can improve Medtec through simulation, analysis, and optimization. Yet another substantial domain is content, where spatial technology is seen as a game changer, allowing the overseeing of editing and visual effects and offering new, more cost-effective, innovative tools.

Apple Inc. is finalizing an agreement with OpenAI to integrate ChatGPT into the iPhone. Additionally, negotiations are underway with Google regarding the use of Gemini, while Apple plans to make a broader effort to incorporate AI features into its devices. Apple’s approach could be a game changer, as per Bloomberg. The company is developing a large language model for generative AI features, a unique feature that is likely to be entirely on-device. This means the AI will be powered by the iPhone’s processor, not the cloud, resulting in faster response times and easier privacy maintenance. More details about this intriguing development are anticipated at Apple’s Worldwide Developers Conference in June.

We see Apple remaining ecosystem-centric while the company uses integrated product development as its benefit, bringing together various teams and functions to collaborate closely throughout the product development lifecycle. This integrated approach ensures that all aspects of the product, from its design and functionality to its manufacturing and marketing, are considered holistically and work seamlessly together. Following the process, we can outline Apple’s effectiveness model, which can be observed throughout the use cases they exemplify as their vision of XR development, implying efficient logic: simulation – analysis – optimization.

Understanding the risks with B2C sales, as many call Apple Vision Pro “too pricy” at the moment, the company’s antidote to this risk is a dual strategy that holds great promise. This strategy involves developing another more cost-affordable device to expand the market, which is expected in 2026, and, in the meantime, gaining a notable presence in the B2B market. In this respect, at Lucid Reality Labs, we see the latest M4 chips as a promising update for next-generation Apple Vision Pro devices, given their substantial efficiency gains as they consume considerably less power than their predecessors.

While many of Apple’s apps still need to be optimized for the platform, the trend of use cases demonstrates that a new breakthrough application can be created in the enterprise segment as we anticipate the wider adoption of Apple Vision Pro in the consumer market.

Meta: ecosystem and integrated product development through alliances, open-source AI features

Meta will now have its own ecosystem created through collaboration with partnering hardware developers such as LG. The recent launch of Meta Horizon OS, Meta’s OS with its enterprise focus, is set to gather global XR hardware leaders, provide Meta with a competitive edge in the fast-paced XR market, and create opportunities for integrated product development under Meta’s leadership. While Bloomberg calls this approach reminiscent of Android, Meta may gain a unique competitive advantage, foreseeing its part as the most used software developer.

Meta launched Llama 3, an AI model representing a significant leap in code generation and AI safety, designed to support a wide array of applications, including Meta’s own social media platforms. This model is available on various cloud platforms and is poised to drive innovation and competitiveness in the XR industry as it is already available on AWS, Databricks, Google Cloud, Microsoft Azure, NVIDIA NIM, Snowflake, and more. It enables coding and quicker development while focusing on safe AI and continuing Meta’s commitment to the open-source community, differentiating it from Apple’s approach. Meta’s strategy seems to benefit from the cumulative effect of the partners engaged in every aspect of collaboration. This move offers ecosystem advantages such as improved infrastructure, streamlined processes, and access to larger user bases through enhanced content distribution. These benefits are likely to attract both content developers and hardware creators. We expect to see a wave of global brands joining the platform to leverage these ecosystem advantages, highlighting the importance of strategic partnerships in driving the XR industry forward.

The era of Intelligent XR

Both Apple and Meta are strategically leveraging AI, ecosystem development, and integrated product development to propel advancements in the XR market and contribute to the evolution of intelligent XR experiences. Apple’s recent event exemplified its dedication to these trends by emphasizing enterprise solutions, integrating AI into its devices, and planning new hardware and content creation.

On the other hand, Meta is focusing on building its ecosystem through strategic partnerships and the launch of Meta Horizon OS. By emphasizing open-source AI features and integrated product development, Meta is creating an environment conducive to collaboration and innovation within the XR space. These efforts are aimed at fostering a community-driven approach to XR development, which can create more diverse, immersive, and accessible XR experiences for users.

Overall, both companies’ strategies highlight the importance of AI, ecosystem development, and integrated product development in shaping the future of XR. By embracing these trends, Apple and Meta are laying the groundwork for a more intelligent era of XR.

About Lucid Reality Labs

Lucid Reality Labs is a visionary XR development company that crafts complex solutions through spatial technology. Immersive solutions with impact – from concept & design to development & support. With a strategic focus on Healthcare, Life Science, Aerospace & Defense, and many more. We equip industries with the boundless potential of immersive technology.