Sources have reported that Meta is:
- Halting the development of its dual camera smartwatch project
- Ceasing production of its Portal smart display device as a consumer product (Portal will still be developed as a business connection tool)
- Delaying the launch of its coming AR glasses product, which had been initially scheduled for release in 2024
The changes significantly alter Meta's ongoing plans, which also include the development of retail stores as part of an expanded push into consumer tech products, branching beyond its social platform roots.
Meta also recently scaled back its audio social developments, while several other projects are under review.
The company has been looking to reduce costs as it focuses on developing its metaverse-aligned initiatives, while also dealing with the compounding impacts of Apple's new data privacy changes. Last year, Meta noted that Apple's new ATT updates, which prompt users to opt in or out of data tracking, will likely cost it around $10 billion in lost ad dollars in 2022 alone. Meta also reported a $10 billion operating loss in its Reality Labs division for FY 2021.
The announcements, logically, spooked the market, and sent Meta shares tumbling, which they haven't recovered from as yet. These latest product roadmap update are part of Meta's broader plans to keep an even keel through expected economic uncertainty, while it's also flagged coming job losses and delays in several divisions.
And it's not the only social platform in this boat. Last month, Snapchat issued a profit warning, with its Q2 revenue unlikely to meet the targets that it had communicated just a month earlier, due to 'a macroeconomic environment that has deteriorated further and faster than anticipated'. Twitter is rescinding job offers and clearing out its executive ranks, while ByteDance, the owner of TikTok, has lost $100 billion in market value over the past year.
Increased regulation, a spending slowdown and broader economic pressures are making it much harder for tech platforms to take big bets, which is seeing all of them wind back their efforts to expand and evolve into new areas.
Meta, of course, has already made this a key focus, and it's keen to continue on its path towards the metaverse, through the increased take-up of VR headsets and other aligned tools.
As such, it's not cutting off its hardware development entirely
According to Meta CTO Andrew Bosworth:
So while we might not be getting a Meta Watch any time soon, Meta is still working on a wrist control device for VR, which will expand on its metaverse focus, while it's also still investing in new metaverse-related tech.
What will that mean for ongoing development, and coming changes in the space? It's impossible to say, but with increased shareholder pressure tends to come accelerated revenue measures, which could be good, in terms of providing new ad options and reach, while they could also be bad, in squeezing more ads into feeds and impacting the user experience.
Meta is well aware of these impacts, and as such, it may be less likely to pump in a whole new flood of ads (though Instagram users have anecdotally noted more ads in their feeds of late). But clearly, the squeeze is definitely on, and that could lead to a range of changes as the platforms strap in for a bumpy road throughout the second half of the year.