In the first quarter of 2022, the metaverse business of Meta (FB) – known as Reality Labs – was operating at a loss of nearly $3 billion, sparking market skepticism about whether the metaverse really has a place in the digital future. Meta CEO Mark Zuckerberg noted that current costs “lay the groundwork” for this technology to hit the mainstream.
Despite skepticism, Qualcomm (QCOM) CEO Cristiano Amon agrees that the best is yet to come for adoption and investment in the metaverse.
“It’s real, it’s going to be a really big opportunity,” Amon told Yahoo Finance Live. “We began investing in the foundational technologies that enable the fusion of physical and digital spaces over a decade ago. It’s no secret that because of these early investments, for the more than 40 virtual reality and augmented reality devices that exist around the world, [they are] all powered by Qualcomm.
Amon joined Yahoo Finance Live on Milken Institute Global Conference 2022 in Los Angeles in an exclusive interview with Alexandra Garfinkle of Yahoo Finance. Amon discussed the company’s presence in the automotive industry, partnerships, competition and the metaverse.
And while Meta’s $3 billion bill for Reality Labs in the first quarter of 2022 might seem hefty, the company lost more than $10 billion throughout 2021. Horizon Worlds, Meta’s flagship social VR app, piloted creator monetization features late in the quarter and is set to launch a web version to expand access to those who don’t own an Oculus Quest 2 or similar headset. The platform has reached an important milestone of 300,000 users earlier this year.
According to Amon, Qualcomm continues to maintain new, existing and secure partnerships with industry giants such as Meta and Microsoft (MSFT) to supply hardware and software to their extended reality (XR) businesses.
“One of our biggest partnerships is with Meta,” he said. “We had a very successful partnership with them for virtual reality with the Quest and the Quest 2. We announced at CES that we were now doing a custom chip for augmented reality with Microsoft as Microsoft Holo Lens is preparing to evolve, and we have announced a partnership, for example, [a partnership] with ByteDance for VR for Tiktok.
The Federal Reserve raised interest rates by 0.50% on Wednesday in a bid to curb soaring inflation. In light of the Fed’s interest rate hike campaign, uncertainty remains regarding investing in the metaverse as investors begin to favor value over growth stocks.
The issuance of exchange-traded funds like the ProShares Metaverse ETF (VERS) demonstrates that some investors, both institutional and retail, recognize the opportunity of the metaverse. However, the fund and similar ETFs were hammered by macro conditions.
Either way, Amon remains optimistic about the future of the Metaverse and XR technology.
“We have a number of different developments to eventually create a companion for your smartphone with fully immersive augmented reality glasses that will actually look like [normal glasses],” he said. “And I think that’s a great opportunity. It could be as big as phones.
Thomas Hum is a staff writer at Yahoo Finance. Follow him on Twitter @thomashumTV
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