Meta Seeks Partnership with Magic Leap to Reduce Reliance on China for AR Hardware

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Meta is in talks with Magic Leap, an augmented reality start-up. So we guess they will reach a multi-year agreement soon. The partnership will investigate IP licensing and manufacturing chances in North America to aid Meta’s metaverse project and AR product creation.

Magic Leap designs unique parts, such as advanced optics and software. They are essential to building the metaverse. Plus, this brand stands out with its advanced “waveguide” tech. The latter allows hin glass to create lifelike images before the user’s eyes.

Meta’s fascination with augmented and virtual reality echoes Apple’s planned “mixed reality” product. Both see headgear as a profitable computing platform that can rival mobile devices.

Meta and Magic Leap Join Forces

Despite Meta’s $612 billion market valuation, some investors are unhappy with CEO Mark Zuckerberg’s $10 billion annual investment in the metaverse project. They think it could take years to generate returns. Though the economics doesn’t promise a bright future and Meta has huge ad losses, it still believes metaverse is what will change the world again.

Meta’s desire to work with Magic Leap stems from a growing desire to reduce its reliance on China for hardware manufacturing. They should solve the problem at this stage. Otherwise, Meta will rely on China even more.

Founded in 2010 and based in Florida, Magic Leap is a well-funded AR start-up. Following slow sales of its Magic Leap 1 headset in 2018, they have shifted to the B2B model. Saudi Arabia’s Public Investment Fund bought a majority stake in the company in 2021.

This will be a win-win deal for both. We mean Meta will get a chance to use Magic Leap’s patents. When saying this, we mean those referring to the mixed reality optics first. Magic Leap has manufacturing relationships, including one with Jabil in Mexico, that allow it to assemble tens of thousands of headsets each year.

Although Meta leads the VR/AR headset market at the moment, capturing 80% of the latter with its VR Quest models, the overall segment remains modest. Anyway, we should point out that another big player is about to enter the niche. Once Apple launches its own product, all rivals will cry. And this is going to happen quite soon, at the next big event.