Earlier quoted context omitted.
> So there’s no kind of existential danger to Quest here, but it remains to be seen if the hardware licensees can bring anything relevant to the table either. Why would I, as a potential hardware maker, wish to compete in a market where the existing main producer is a mega wealthy entity that is already dumping product below cost and is capable of doing so indefinitely?
The low end of the market is taken - but (from an outsider perspective) the high end appears free. The people who want to buy a Honda aren't the same people who want to buy an Acura, even though it's (essentially) the same parts. Let's say that, tomorrow, Gucci or Dolce and Gabanna (or however you spell that) want to make a VR headset (why? who knows?). They don't have the tech acumen to compete with Facebook on expe…
For example, if you're selling VR headsets for the purposes of industrial training, you may not want the consumer-grade hardware Meta is selling. You may need weather-sealing to allow outdoor operation. You may need vastly higher-resolution screens for industrial applications. The list of specializations goes on.
The specialized businesses tend to have wider moats and bigger margins. The TAM is smaller - too small for a mega-cap company like Meta to care about, but nonetheless can contribute to the health of the ecosystem.
This play gives influence over these niche, specialized uses of AR/VR without having to commit the entire company to it.
For example think of a medical instruments company that trains on VR headsets. Their choices right now are to use consumer-grade hardware which may not hit all of their needs, or become a full-on AR/VR company with all the requisite R&D that involves.
This allows these companies to exist in the middle ground - having the core R&D being done by another party, but having sufficient control to ship specialized hardware.