During the Meta (META) Connect event on Wednesday, midway through the keynote, Vice President of AR, Alex Himel, took the stage with a briefcase handcuffed to his wrist.
“This is Orion,” announced CEO Mark Zuckerberg, as Himel revealed Meta’s augmented reality (AR) glasses from the case.
“Our first fully functioning prototype—and, if I may say so, the most advanced glasses the world has ever seen.”
This reveal gave investors a look into a major initiative from Meta’s Reality Labs, a division that has been incurring heavy financial losses.
For nearly a decade, the project had been cloaked in secrecy as billions of dollars were poured into its research and development.
Its reveal comes amid growing scrutiny from Wall Street, with concerns over the division’s spending, which has exceeded $50 billion since 2020.
Zuckerberg’s ambition for Orion is to bridge the digital and real worlds, potentially replacing smartphones. However, the release of the product may be further off than Meta’s supporters anticipate.
Meta has previously indicated that the AR glasses could be available by 2027. Yet, several insiders who were involved in the project told that despite Orion being seen as “magical” and “precious,” there is a real possibility it may never reach consumers or yield a return on Meta’s significant investment.
Two former engineers familiar with the project disclosed that the original goal was to produce around 1,000 units, which was quickly scaled back to just a few hundred.
Of those, sources estimate that fewer than twenty units are actually operational, meaning the cost of the working prototypes alone is in the “hundreds of thousands” of dollars range.
Zuckerberg had hoped that the cost of materials used in Orion’s construction would have dropped over the past few years.
That hasn’t been the case, partly due to trade restrictions, which means some materials will need to be replaced for future versions to be financially viable.
“They don’t know if the technology will work, or if it’ll ever work at a price point anyone can afford,” said a former lead engineer, who requested anonymity. “Right now, they don’t have the materials to make this product at a reasonable cost.”
Orion comprises three main components: the glasses, a wristband, and a puck that powers its graphics and connectivity. The puck is referred to as the “central compute,” according to those familiar with the project.
The core materials include a silicon carbide waveguide sandwiched between two protective lenses, seven cameras, two micro-LED projectors, and custom silicon—one of the more costly elements.
To help reduce weight, the glasses also use magnesium frames. Insiders revealed that the waveguides alone cost around $10,000 each.
Zuckerberg acknowledged the challenges still ahead. He concluded his keynote by emphasizing the need for key adjustments to Orion before it can be offered as a consumer product.
“For now, I think the right way to look at Orion is as a time machine,” he said. “These glasses exist, they’re amazing, and they offer a glimpse of a future that’s going to be quite exciting.”
However, it remains uncertain how committed Zuckerberg and Meta are to the Orion project.
Former employees told that earlier this month, Meta shifted a significant portion of its AR development team from Orion to its Ray-Ban smart glasses division.
At the same time, investor concerns about Reality Labs’ outlook continue to grow. A number of high-level former employees previously told Yahoo Finance that the division has struggled with mismanagement.
Following the event, JPMorgan analyst Doug Anmuth issued a new report projecting that Reality Labs would incur losses of $19 billion in 2024 and $23 billion in 2025.
In 2023, Reality Labs lost $16.1 billion, according to company filings, while contributing less than $2 billion in revenue.
In contrast, Meta’s Family of Apps division—which includes Facebook, Instagram, and WhatsApp—generated $62.9 billion in profits.
“The potential for Meta to reduce Reality Labs spending and losses has been a frequent topic in recent discussions with investors,” Anmuth noted.
“While it’s hard to distinguish between shifts of a few billion dollars, we don’t get the impression from Connect that Meta plans to significantly scale back losses from Reality Labs.”
