After Lower Sales Of Quest 2 Led To Loss At Reality Labs, Meta Reportedly Cuts Quest 3 Shipment Forecast By 5-10%

Following a $3.7 billion operating loss primarily linked to decreased Quest 2 sales, Meta Platforms Inc.’s META Reality Labs has reportedly cut its shipment forecast for Quest 3 by 5-10%. 

What Happened: On Friday, Ming-Chi Kuo, an analyst at TF International Securities, said that his latest survey indicates that the Mark Zuckerberg-led company has redacted its fourth quarter Quest 3 shipment forecast by 5–10%. 

"Due to lower-than-expected market demand, shipments for 1Q24 will decline significantly by about 70–80% QoQ,” Kuo said. 

See Also: Meta’s TikTok-Style Instagram Reels Has Finally ‘Graduated,’ Says Mark Zuckerberg

He didn’t stop there and made a significant comparison, highlighting the impending competition from Apple Inc.'s AAPL first-generation mixed-reality headset saying that Vision Pro is "technically at least 2-3 years ahead of Meta's Quest."

"When the Vision Pro launches early next year, even though it targets a different consumer base than the Quest due to its significantly higher price, its clear experiential advantage will influence consumers' purchase intentions for the Quest,” said Kuo. 

When a user on X (formerly Twitter) said that Meta's research lab has technologies "much further ahead" than Apple, but the tech giant decided not to use those because they are expensive and not completely ready for the market, Kuo said that his "technology comparison is based on commercialized products." 

Kuo concluded by saying that Reality Labs' "losses would continue to widen," something that Meta's chief financial officer, Susan Li also admitted to during the company's third-quarter earnings call. 

However, as per the analyst, with "Meta's recent update of its Quest 3 shipment forecast for 4Q23–1Q24, the situation is getting worse more than I had anticipated."

He said Meta's investment in AI will benefit the company's long-term growth, but as of now investors should be cautious about the potential risks of Reality Labs. 

Why It's Important: It was previously reported that in the last few months of 2022, Meta's tech unit dedicated to developing metaverse-related technologies generated $727 million, a decrease of 17% compared to its revenue in the same period of 2021. 

However, despite the current financial challenges, the Zuckerberg-led company remains committed to its metaverse vision.

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Posted In: NewsTechAppleConsumer TechMark ZuckerbergMetaMing-Chi Kuomixed realityQuest 2Quest 3Reality LabsSusan Livision pro
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