The Metaverse – Meta’s Moves

Smart glasses are becoming real.

• Meta is investing in EssilorLuxottica in a move that confirms that Mr Zuckerberg is determined that Meta will control the platform of the Metaverse, but risks alienating the other 70% of the glasses market that EssilorLuxottica does not control.
• Meta will invest $3.5bn for around a 3% stake in the company, which could at some point in the future be rounded up to 5% and bring the two companies closer together.
• Meta has been experimenting with smart glasses for some time, but it is only recently that it has begun to see any traction.
• This is because prior to LLMs, there was very little that one could do with glasses such as these, making them a pricey oddity.
• However, RFM Research has long concluded that machine use of natural language is now at a level where it can be used as a high-quality man-machine interface.
• This does not mean that voice is going to take over the interface on every device, but there are some device categories where a mouse, keyboard, or touchscreen are either not a very good experience or are not present at all.
• The vehicle is one of these, but head-mounted displays that are the leading device category for the Metaverse are the most relevant.
• This is for three reasons:
  • First, input and output: where voice is really the only option for using a pair of smart glasses.
  • This is why the use of an LLM running on a smartphone and in the cloud has greatly improved the user experience.
  • Prior to LLMs, voice was a poor user experience, meaning that asking complex questions or asking the agent to carry out certain actions was a frustrating experience.
  • Now with the use of an LLM, the agent understands the request correctly almost every time and many users’ frustration has given way to delight.
  • This is the main reason why there are signs of life in the smart glasses market, which is a very early precursor for the Metaverse.  
  • Second, device position: which is ideal for using voice as well as some of the use cases that LLMs excel at.
  • With the microphone already close to the user’s mouth, no device manipulation is needed to activate and use the service.
  • Furthermore, with a camera in the glasses, the LLM is also in a position to be able to see what the user can see without having to take a phone or a device out of a pocket or handbag and point it in a certain direction.
  • Third, size, weight and cost: where the use of voice could greatly reduce the need for systems that track hands or eyes with input instead relying on voice.
  • This would mean fewer sensors, silicon chips and a lower power requirement, all of which will reduce the size, weight and costs of glasses, where size and weight make the difference between success and failure.
• The net result is that for the fairly limited use case of smart glasses tethered to a smartphone, natural language is a great user experience and contributes to making the devices more acceptable to the market.
• Furthermore, momentum is building in this market (although it is still tiny), which with time, could serve as the entry point to the Metaverse
• This is why Meta is so interested in EssilorLuxottica, and it looks like its smart glasses will expand across the range as popularity grows.
• However, by taking a stake in EssilorLuxottica, Meta has nailed its colours to EssilorLuxottica’s mast, meaning that the other 70% of the glasses market will be cautious about implementing Meta’s technology into their glasses.
• The bet here is that Meta’s platform is so successful that this will not matter, but I think that Google will also likely do deals with glasses makers.
• It is currently doing everything in-house as it is using small screens, unlike Meta, but if the market continues to grow, I expect that it will offer a screenless variant like Meta does.
• Smart glasses are currently little more than smartphone accessories but if consumers get used to and enjoy wearing technology rather than carrying it in the pocket, this could open the way to more sophisticated products.
• This is how the Metaverse could get started and eventually replace the smartphone, but it is going to take a long time.
• By comparison, from inception to global domination, the smartphone took 15 years to replace ordinary mobile phones, and I suspect that the Metaverse could be similar or even longer.
• The smartphone will remain the digital king for a while yet.