Meta is about to sign a licensing deal with Magic Leap

Meta and Magic Leap are in talks to close an IP licensing and manufacturing deal. The deal will allow both companies to form a coalition against Apple’s growing interest in AR.

Despite its promising future, the AR space has not yet been able to turn into a profitable area of business for companies like Meta and Apple. According to the latest reports, Meta is losing over $13 billion annually on Reality Labs, and the downfall is expected to continue. However, Meta has no plan to give up on AR and wants to revive its business by signing a licensing deal with the rival company Magic Leap.

The agreement details are yet to be discovered, but it’s unlikely that companies would agree to launch a joint product. Instead, Meta could access Magic Leap optical tech and hand over producing its VR headsets to the fellow startup. Additionally, this partnership will let Meta produce its VR products domestically and reduce reliance on China. Reports already suggested that Meta could launch its AR glasses in 2027.

Meta and Magic Leap will sign an IP licensing deal

Neither Meta nor Magic Leap has yet responded to the news. But Magic Leap called these partnerships a “significant line of business” that offers a “growing opportunity” to the company, according to Financial Times.

Magic Leap is one of the most creative startups in the AR space. Its optics are incredibly popular among manufacturers. Last year, the CEO Peggy Johnson said in a blog post that a growing number of businesses are interested in licensing their IP and using their patented manufacturing process.

Meta CEO Mark Zuckerberg had laid out his visions for the company’s future, with AR being an essential part of it. However, investors are unhappy with this decision. As the company reported $13.7 billion in operating losses for AR and VR in 2022. The tech giant also lost another $10 billion in Reality Labs in 2021.

Meta could also face growing competition in the AR space in the coming years. Apple is reportedly planning to enter the AR market. And Samsung is pegging itself into the market by adding more AR-driven features to Galaxy devices.