Welcome to Lowpass! This week: A conversation with Meta CTO Andrew Bosworth, and a look back at consumer electronics trends in 2023.

A quick housekeeping note: Lowpass is taking a break over the holidays, and will be back in time for CES.

Meta CTO Andrew Bosworth: Mixed reality’s first killer app is the browser

Meta’s Quest 3 VR headset has only been available for two months, but the device’s mixed reality feature is already popular with its users, according to new data released by Meta CTO Andrew Bosworth this week. “There are already hundreds of mixed reality apps in our store where a majority of users have tried mixed reality features,” Bosworth wrote in a blog post Monday. Seven of the headset’s Top 20 apps offer mixed reality features, he added.

I wanted to know more about this trend, so I caught up with Bosworth for a chat earlier this week. Here’s what he told me about Quest sales, mixed reality, Meta’s efforts to bring its AI assistant to the Quest, and the things that still hold AI wearables back (hint: one of them rhymes with Snapple).

This interview has been edited and condensed for clarity.

The Quest 3 just came out ahead of the holidays, and you’re continuing to sell the Quest 2. Any signals on how these devices are performing in the market at this point?

Quest 2 is continuing to sell well, which we're not surprised by. We kept it in the market for a reason, and (at) the most aggressive price we can, to make sure it's successful. We've had a vision all along to make this technology as accessible as possible.

We're also super thrilled with where Quest 3 is. The critical response has been amazing. And to have Asgard's Wrath 2 landing now, with the reviews that it's gotten, is super promising for us. So we feel like we're having a pretty good season here.

You also published some first data on mixed reality this week. What trends are you seeing there?

We (pioneered) mixed reality with the Quest Pro, and as it often is the case with new functionality, it takes a little time for the software to catch up, for the developers to figure out how to use it. So with Quest 3, it was a bit of a gamble. (We took) this big investment on mixed reality, and (were wondering): Are people going to go for it? And yeah, we're thrilled to say that they have. 

Not only are mixed reality apps outperforming, which is exciting, but also, you've seen the videos. The use cases are great. People are using mixed reality just to have YouTube up while they are doing dishes. And the developer use of the API, you can see an inflection in that curve as well. This burst of enthusiasm that we're seeing from developers around mixed reality seems really promising to me. So yeah, the early signs for that modality are really positive.

What kind of use cases are you seeing gaining traction though? I can’t imagine a lot of people doing their dishes with the Quest on.

There is a lot of that kind of use. It's not dishes, necessarily. But people just using the browser while in mixed reality is hugely popular on the Quest 3. The browser is popular on Quest 2, don't get me wrong.  But it's a really big noticeable difference on Quest 3, when people are in color pass-through using the browser.

And this is something that John Carmack used to talk about all the time. A lot of people may be in a small apartment. They may not have a big screen TV. They may not have a big second monitor for their PC. That's one of the really key use cases, people being in color pass-through. I don't know if they're doing dishes or not, but they've got a browser window open, and they just engage in that way.

You talked a bit about AI and AR/VR coming together in your blog post this week. Meta just launched its AI assistant on the new Ray-Ban glasses, but what are you planning on that front for VR hardware? Are we going to see AI on the Quest as well in 2024?

We're looking at Meta AI everywhere. There's all these obvious ideas: In Horizon, being able to use the generative large language models to create objects, to embody NPCs, to create worlds. Things that were previously very inaccessible to a large majority of would-be content creators could be made accessible. But creating 3D objects actually is an entirely different modality that hasn't been cracked yet. It's a lot more work that has to be done there.

Of course, you also just want to have the Meta AI assistant everywhere. You want to have it with you on your glasses, you want to have it with you in your headset. But in the headset, we have to give it eyes and ears. What information does it have access to? How do you build that into the model, and how do you make sure that people are aware from a privacy standpoint that they're opting in the right things? It's not as trivial as it sounds.

Speaking of Meta’s Ray-Bans: Who is your main competition in this new AI wearables space? Is it something like the Humane AI Pin? Or is it AirPods or other earbuds?

It's an exciting question. There's the Humane Pin, there's us, there is AirPods, Pixel Buds. There's a pretty big OEM market in China doing glasses. No one really knows the format yet. It's a big, competitive space. (But) the real bottleneck right now is the phones. Not just the chokeholds phones have on software. There are also tremendous chokeholds on hardware integrations.  

AirPods, for example, use a special Bluetooth channel not available to any other audio device. You can easily build better-quality headphones than the AirPods are, (but) it doesn't matter. You won't be allowed by Apple to compete on the connectivity, on the quality of experience that they are providing their first-party hardware.

That’s all fine and good when we're talking about AirPods that are just playing music or even calls. That's a pretty commoditized space. But what about when that thing is now providing you sensors (and) an assistant? Anybody who has used Ray-Ban Meta glasses knows this. I have an Android and an Apple device, and the Android device is such a better experience for Ray-Ban Meta glasses. We have much stronger access to the compute in the background, we can download images in the background. There's a bunch of things that we can do that make it a much more streamlined experience. 

(That’s) just not possible on the iPhone. It's still a great product, it's still an experience that we are proud of. But it could be much better, and Apple could easily make it better. They just chose not to make those APIs available to us on the software and on the hardware side. 

That's a major challenge. When it comes to the earbuds, Apple doesn't have a good assistant. And they're not going to have a good assistant. They're not in a position from an AI standpoint to provide that experience. At the same time, their anchor device, their phone, the thing that's in your pocket, is not working for you, the consumer. It's literally handicapping you, the consumer, to benefit them, which I think is a real loss.

2023 was a surprisingly good year for innovative consumer electronics

Here’s something I didn’t expect from 2023: A bunch of new cutting-edge gadgets that redefine what’s possible in the living room, on the go, and in the worlds we might all inhabit in the future.

For the past four years, we’ve seen hardware makers struggle with chip shortages, supply chain slow-downs, and unpredictable consumer behavior. This has arguably led some of the world’s biggest companies to pare down their ambitions. 

We’ve seen the emergence of inflation gadgets — lower-powered versions of existing devices meant to be sold for cheap, while also providing cover to raise prices on some more-expensive-to-make gizmos. We’ve seen companies release fewer devices. Google, for instance, hasn’t sold new audio hardware since 2020, and Roku skipped its fall hardware update for the first time in at least eight years this year. And we’ve seen a wholesale embrace of services as a revenue source at a time when streaming dongles, and even TVs, are often sold below cost.

And yet, there’s also been a bunch of surprises. In 2023, we’ve also seen companies announce or launch bold new devices that both provide exciting features today and shine a light on where the world may be heading in the future. Here are a few that stood out to me:

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