ByteDance, the China-based owner of TikTok, is starting to snare market share in the virtual-reality headset space that Meta Platforms has identified as critical to its future, The Wall Street Journal has reported.
Two years ago, ByteDance bought Pico, a Chinese startup that makes VR headsets. This acquisition, according to WSJ, launched a new front in the Chinese company’s competition with Meta, whose Instagram and Facebook services have been battling for users and advertising dollars against TikTok as the short-video app soared in popularity. Pico’s headset shipments have since jumped, turning it into a small but fast-rising No. 2 to Meta in the global market, according to industry data accessed by WSJ, even though Pico doesn’t sell its consumer headsets in the US.
Mark Zuckerberg in 2021 renamed Facebook to Meta in part to reflect his bet on the metaverse, a more immersive version of the internet to be experienced largely through virtual-reality headsets.
The company has been spending heavily on that concept, according to WSJ. In its latest quarterly results, Meta said there were more than 200 apps on its VR devices that have generated over USD 1 million each in sales, although total revenue in Meta’s Reality Labs segment was down 17 per cent in the quarter due to lower Quest 2 headset sales.
Meta held 90 per cent of the market share about a year ago, according to research firm International Data Corp. By the third quarter of 2022–the latest period for which data is available–its market share had dropped to about 75 per cent. Market share for Pico more than tripled over the same period to about 15 per cent. No other VR headset maker held more than 3 per cent of the market.
Meta’s headset shipments in the third quarter declined 48 per cent from a year earlier, IDC’s data shows. ByteDance’s Pico was the only headset maker to increase shipments, in a market that was estimated to be worth USD 4 billion as of 2022, WSJ said.
“We’re glad consumers have more ways to experience VR, because when they do, it helps fuel the ecosystem, which in turn encourages developers to create more great content,” a spokeswoman for Meta said. ByteDance declined to comment for this article.
ByteDance’s inroads in the virtual-reality headset market come at a tricky political time for the company. The Beijing-based business is in the crosshairs of officials and politicians who have voiced concerns the Chinese government could use TikTok data to spy on Americans, WSJ said, adding that TikTok’s app has been banned on federal-government devices, while some Biden administration officials want to try to force TikTok to be sold to a US company.
Pico offers headsets for personal use in Europe and Asia, markets that have been more open to devices from Chinese companies than the US Consumers in those markets have gravitated to Pico partly in response to a USD 100 price increase Meta introduced to Quest last year, said Jitesh Ubrani, research manager at IDC. After the increase, Meta’s Quest 2 costs USD 399. Pico’s main consumer headset retails for roughly the equivalent of USD 450. Pico also has been available in some markets abroad where Meta’s device hasn’t in the past, he told WSJ.
(This news report is published from a syndicated feed. Except for the headline, the content has not been written or edited by OpIndia staff)
