X
<

Facebook in 1Q17: Live Sports, Ad Strategies, and Competition

PART:
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Part 2
Facebook in 1Q17: Live Sports, Ad Strategies, and Competition PART 2 OF 15

How Apple’s Entry into the AR Business Could Impact Facebook

Apple working on AR eyewear

According to a report in the Financial Times, Apple (AAPL) and Facebook (FB) are working to take on Microsoft (MSFT) with augmented reality (or AR) devices in the form of a pair of glasses. Such a move would also rattle Magic Leap, an AR startup that counts Google (GOOGL) and Alibaba (BABA) among its investors.

Microsoft, with its HoloLens headset, is believed to have the most advanced AR device on the market today. However, HoloLens’s adoption has been limited to developers, and Microsoft isn’t saying when it would launch a consumer version of its AR device.

How Apple’s Entry into the AR Business Could Impact Facebook

Interested in FB? Don't miss the next report.

Receive e-mail alerts for new research on FB

Success! You are now receiving e-mail alerts for new research. A temporary password for your new Market Realist account has been sent to your e-mail address.

Success! has been added to your Ticker Alerts.

Success! has been added to your Ticker Alerts. Subscriptions can be managed in your user profile.

Facebook already has a virtual reality (or VR) headset, Oculus Rift, on the market. Its CEO, Mark Zuckerberg, and other company executives have hinted that the company has an AR work in progress.

Riding the Apple effect

It’s unclear how far apart Facebook and Apple are with their AR projects. However, Apple’s entry into the AR business could be more of a blessing for Facebook than a competitive threat. Given Apple’s strong brand position in the consumer electronics market and its track record for innovation, its presence could help accelerate the growth of the AR industry. This shift could benefit Facebook and other AR device makers.

While Apple’s entry into the smartwatch business may have disrupted incumbents like Garmin (GRMN), it also helped increase consumer awareness of smartwatches, thus expanding the addressable market.

BCC Research estimates that the global market for VR and AR could expand at an average annual rate of 67% between 2015–2020 to reach $105.2 billion at the end of the forecast period. The chart above shows this market projection.

De-risking the topline

Facebook is venturing into hardware products like VR and AR, which it expects could help it diffuse its risks by anchoring its business on more than online advertising budgets.

X

Please select a profession that best describes you: