Meta Claims AR Breakthroughs

Meta unveiled prototype augmented reality (AR) glasses that it described as "truly representative of something that could ship to consumers." The Orion glasses support holographic displays, which enable the wearer to place 2D and 3D digital content within their field of view.

Although the prototype glasses look comically large (see picture) and could attract ridicule, Meta enthused: "Nailing the form factor, delivering holographic displays, developing compelling AR experiences, creating new human-computer interaction paradigms – and doing it all in one cohesive product – is one of the most difficult challenges our industry has ever faced. It was so challenging that we thought we had less than a 10% chance of pulling it off successfully. Until now." 

While many people will be too self-conscious to wear the Orion glasses out and about, the form factor could be light enough and sleek enough to be used for enterprise applications or in the privacy of the home.

Orion will only be available to Meta employees and some external actors, but the company said it is building towards a consumer AR glasses product line, which it plans to begin shipping in the near future.

Meta said it is focused on "tuning the AR display quality to make the visuals even sharper,  optimising wherever we can to make the form factor even smaller and building at scale to make them more affordable."

Meta also unveiled Meta Quest 3S, a headset that promises the same mixed reality capabilities and performance as the Meta Quest 3, but at a lower price point - starting at 299.99 US dollars for the 128 GB model. The 128 GB Meta Quest 3 had cost about 500 dollars, but its display resolution and field of view is better than that of the Meta Quest 3S.

The company also announced new capabilities for its Ray-Ban Meta glasses, such as being able to translate speech in real time. "When you’re talking to someone speaking Spanish, French or Italian, you’ll hear what they say in English through the glasses’ open-ear speakers," Meta said, noting the glasses will support more languages in future.

Source: Meta newsroom

T-Mobile Forecasts Strong Service Growth

T-Mobile US forecast a compound annual growth rate of approximately 5% in service revenue in the next three years, as the mobile operator expects to generate 75-76 billion US dollars in revenue in 2027. "This is driven by continued wireless and broadband customer growth, continued growth in average revenue per account from deepening customer relationships and growth in new businesses," it said. It plans to invest 9-10 billion dollars in annual capital expenditures between now and 2027.

Providing examples of opporunities, T-Mobile US said it has grown "solutions that it built to improve advertising in its own business to other advertisers into an over 1 billion dollar in annual revenue business." The operator also pointed to its T-Priority service, "which gives first responder agencies of all sizes priority on the T-Mobile network to help ensure best-in-class connectivity during times of congestion, especially massive emergencies, and offers support for a wide range of data-intensive applications." Source: T-Mobile US

Big Tech Steps Up Investment

The AI arms race is driving up capital spending by the tech giants. In the first half of 2024, the aggregate capital spending of the Magnificent Seven was more than 107 billion US dollars, compared with 77 billion dollars in the same period of 2023. In 2024, Alphabet and Microsoft have both already invested about 25 billion dollars each in capex, compared with 8.6 billion dollars (including spectrum) for Deutsche Telekom - one of the biggest investors in the telecoms sector.

On its second quarter earnings call, Alphabet said its increase in capital spending was "driven overwhelmingly by investment in our technical infrastructure, with the largest component for servers, followed by data centres." It expects total capital spending to be about 48 billion dollars in 2024.

On that call, Sundar Pichai, CEO Alphabet and Google, added: "Aggressively investing upfront in a defining category (AI), particularly in an area, which in a leveraged way, cuts across all our core areas, our products, including search, YouTube and other services as well as fuels growth in cloud and supports the innovative long-term bets and Other Bets. It is definitely something that for us makes sense to lean in."

"The risk of underinvesting is dramatically greater than the risk of over-investing for us here. Even in scenarios where if it turns out we are over-investing, these are infrastructure which are widely useful for us, they have long useful lives, and we can apply it across and we can work through that."

Despite Alphabet's ramp up, Amazon still has by far the biggest capex budget in the Magnificent Seven, reflecting the fact that it runs a massive logistics business, in addition to its cloud services and apps. After cutting investment sharply in 2023 (through lower spending on fulfilment and transportation), Amazon has said it will increase capex in 2024 to support growth in its cloud computing business (AWS), which is investing in generative AI and large language models.

Source: The Magnificent Seven - Follow the Money