Meta and Apple are in Intense, Philosophical Competition

Mark Zuckerberg acknowledges that Apple and his company are in an “intense, philosophical competition” to build the metaverse, suggesting that the two tech giants are ready to butt heads in selling augmented and virtual reality hardware.

The Meta CEO told employees before this month that they were contending with Apple to determine “what direction the internet should move in,” according to a recording of his remarks during an internal all-hands meeting.

He said that Meta would set itself as the more open, affordable alternative to Apple, which is expected to inform its first AR headset as soon as this year.

“This is a competition of philosophies and ideas, where they think that by doing everything themselves and tightly incorporating that, they build a better consumer experience,” Zuckerberg asked of the brooding rivalry. “We believe there is much to be done in specialization across diverse companies, and [that] will permit a much larger ecosystem to exist.”

Since rebranding Facebook’s company title to Meta, Zuckerberg has been driving the concept of interoperability for the metaverse, or what he witnesses as the next significant chapter of computing after mobile phones. As a result, meta recently supported the Metaverse Open Standards Group stand-up with Microsoft, Epic Games, and others. The idea is to stimulate the creation of open protocols to let people quickly move via future immersive, 3D worlds with their virtual goods.

Apple is missing the group, which Zuckerberg called out as not unpredictable in his comments to employees. He explained how Apple’s strategy of building hardware and software it tightly controls had worked well with the iPhone, but that for the metaverse, “it’s not clear up front whether an open or closed ecosystem is going to be better.”

While CEO Tim Cook has been upfront about the company’s stake in AR as a category, Apple has been characteristically quiet about its unannounced hardware plans. Even still, all signs point to the looming release of a high-end headset that blurs the complete immersion of VR with AR experiences that overlay the real world. In addition, meta is planning to release a similar kind of headset later this year, codenamed Cambria, and is also readying its first authentic pair of AR glasses.

If VR and AR take off like Zuckerberg hopes, it seems he wants to position Meta as the Android to Apple’s iOS. But, of course, there is a parallel to draw already: Meta’s Quest headset allows the side loading of apps not approved by Meta’s VR app store, similar to how Google’s Android provides for sideloading. And even though it just increased the price of the Quest by $100, Meta’s hardware is still mostly sold at a failure or breakeven.

Zuckerberg tells Meta employees to brace for an “intense period.”

Apple and Meta have never really seen eye to eye. The former is currently costing billions of dollars a year in lost ad revenue on iOS, thanks to its prompt that asks people if they want a third-party app to track them for showing ads. Zuckerberg’s remarks indicate that the two tech giants will be battling for years even as he tries to invent his way out of being under Apple’s thumb on mobile.

Below is a lightly edited transcript of Zuckerberg’s answer on June 30th to a Meta employee’s question about metaverse competition with Apple:

Employee question: Apple is absent from metaverse standards and is coming out with their AR glasses. How does that affect Oculus and our ecosystem? Thanks.

Mark Zuckerberg: I think it’s pretty clear that Apple will be a competitor for us, not just as a product but philosophically. We’re openly approaching this and trying to build a more open ecosystem. We’re trying to make more stuff interoperable with Android. We’re trying to develop the metaverse in a way where you can bring your virtual goods from one world to another. We created the Metaverse Open Standards Group with a bunch of other folks you just mentioned, and Apple didn’t join. But I don’t think that’s a surprise. Apple has been a close computing provider for a few generations of computing.

It is a competition of philosophies and ideas, where they believe that by doing everything themselves and tightly integrating that, they build a better consumer experience. And we think that there is a lot to be done in specialization across different companies, and [that] will allow a much larger ecosystem to exist.

One interesting thing is that it’s unclear upfront whether an open or closed ecosystem will be better. If you look back to PCs, Windows was the one that had a lot more scale and became the default and norm that people used. And Mac did OK, but I think PC and Windows were, I believe, the premier ecosystem in that environment.

On mobile, I would say it’s more the other way. There are more Android devices than there are iOS devices, but I think in developed countries and places like the US or Western Europe in kind of the high end, [and] a lot of the culture-setters and developers, I do think that skews quite a bit more towards iPhone and iOS. So I’d say on mobile, Apple has carved out quite a good position for themselves, and that’s why they’re the most profitable company in the world, or maybe one of the couple most valuable companies in the world.

But I don’t think the future is yet written here for the metaverse. And I believe our job is we’ll continue doing leading research and pushing on this at all levels of the stack. We’re doing VR. We’re doing AR. We deliver our devices at cost or a small subsidy, or slightly more than the cost in some cases. But the bottom line is our business is not primarily taking a premium on the devices. We want as many people to be interacting in there as possible. Part of that is having it be an open and interoperable ecosystem.

Our north star is can we get a billion people into the metaverse doing hundreds of dollars a piece in digital commerce by the end of the decade? If we do that, we’ll build a business as big as our current ad business within this decade. I think that’s a fascinating thing. I think a big part of how you do that is by pushing the open metaverse forward, which is what we’re going to do.

So yeah, Apple is going to be a competitor. I think that that’s pretty clear, but it’s an intense competitor. It’s not just [that] they have a device with more features than us. It’s a fierce, philosophical competition about the direction the internet should go. And I am proud of the investments we’re making to help push forward the open metaverse on this and, hopefully, make the next version of computing a bit more relaxed.