Two of the biggest names in XR—headset maker Meta and chip maker Qualcomm—today announced a “multi-year broad strategic agreement” to collaborate on “customized virtual reality chipsets” for future devices.

Qualcomm, a leading provider of smartphone processors, was an early mover in the XR space by pushing variants of its Snapdragon mobile processors as ideal for use in both AR and VR headsets—a play which now sees the company’s product in the vast majority of standalone headsets available on the market today.

Meta has used Qualcomm processors in all of its standalone headsets to date—Go, Quest, and Quest 2—and is expected to do the same in its forthcoming Project Cambria headset.

Today Meta and Qualcomm jointly announced they have entered into a “multi-year broad strategic agreement” to work together on XR platform development. The agreement was a big enough deal that the CEOs of both companies made the announcement together during the IFA 2022 conference.

“We’re working with Qualcomm Technologies on customized virtual reality chipsets— powered by Snapdragon XR platforms and technology—for our future roadmap of Quest products,” said Meta CEO Mark Zuckerberg. “As we continue to build more advanced capabilities and experiences for virtual and augmented reality, it has become more important to build specialized technologies to power our future VR headsets and other devices.”

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With the companies having already worked together over the last several years, it’s a curious announcement—what gives?

On its face the announcement likely represents a commitment by Qualcomm to make Meta a top priority client over the next several years, devoting more time to the company and offering it more influence over future Snapdragon XR chips from Qualcomm. And with Meta believing that it’s going to take a complete rethinking of the typical computing architecture to make the sci-fi vision of XR a reality, the companies will probably be prototyping together on that front as well.

But there’s likely another major reason for this partnership—it brings two allies together against a common threat: Apple.

Though Apple hasn’t formally announced any XR products yet, all signs point to a long history of R&D and a desire for the company to dominate the space. For Meta, which itself wants to control the destiny of XR, that’s a problem. Mark Zuckerberg has been eyeing this potentiality since at least as far back as 2015, which drove him to buy Oculus in the first place—in an effort to get out ahead of companies like Apple and Google in the nascent XR space.

But Apple is a problem for Qualcomm too… Apple is sure to use its own custom processors (colloquially referred to as ‘Apple silicon’) in its XR products. By definition then, the greater marketshare that Apple has in the XR space, the fewer Snapdragon chips Qualcomm will sell.

Apple has long been building its own custom processors for its smartphones which has given the company and edge over competitors using commodity chips. In the last few years Apple has also begun phasing out third-party processors in favor of its own chips in its PC products, signaling a maturation of the company’s microprocessor design and fabrication capabilities.

For Meta, the partnership with Qualcomm buttresses a strategic vulnerability by giving the company a committed ally that can make chips that are highly specialized for XR devices.

For Qualcomm, the partnership with Meta is an effort to ensure that Apple doesn’t easily dominate the XR market and snuff out the company’s opportunity to sell chips to a wide variety of non-Apple XR device makers.

Ultimately the partnership is a maneuver in a fight for early ground in a market that the companies expect will one day be worth trillions of dollars.

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  • xyzs

    I can’t wait to see this threat, and finally start to see some kind of competition and innovation in the VR hardware world.

    • execpro 22

      Would you really rather have Apple who is known for tightly controlling there products and environments including what gets put on their products to have control of the VR market? Do you honestly think Apple would allow something like sidequest on their products?

      • xyzs

        I don’t care what Apple would do honestly :) What I know is that when Apple will release their own VR headset, it will be technologically superior (leaks suggest amazing specs like 4k per eye rgb oled + they have amazing socs and established software strength) forcing the competition to step up to not look like lame outsiders.
        The second thing I know even more, is that when Apple will show its device, 100x more people in the world are going to pay attention and pay money for VR, and that is what is needed to get the virtuous cycle or innovation and involvement to start.

        • Anonymous

          This attitude is correct than blindly hating on arbitrary things like FB did this, Apple did that.

          VR need all the companies who can:
          1. Bring competition to VR
          2. Bring attention to VR
          3. Make VR accessible and applicable in cases other than games. (Although the Apple VR is probably super expensive, I am sure Apple fanboys will still consider it cheap)
          4. Give devs a sizable market to release games

          As long as it is not a Chinese company (you are basically funding the PLA and spyware)

          • Christian Schildwaechter

            The problem here being that Apple isn’t interested in VR, but AR. As far as we can tell, the only reason why they would release an AR device that is actually a VR HMD with passthrough is that true AR display technology isn’t ready yet. And once these become available, Apple very likely will drop the whole VR part.

            According to rumors the Apple XR HMD will also not come with controllers, but rely on hand tracking only, meaning it will be incompatible with almost all existing VR gaming. Given the very high price targeting more a professional and content creator market, Apple entering the XR market will very likely boost AR development by a lot, but the benefits for VR will only be indirect in so far as both technologies share a lot of common basics, so improvements of one will often help the other too. But I don’t think Apple will really help with the points 1) – 4) you mentioned.

  • Fantastic, more power to the company holding the monopoly of XR

    • Sven Viking

      It’ll give them more power either way (e.g. over the direction of development) but they claim the chips themselves won’t be exclusive to Meta:

      According to Qualcomm, the chips could show up in other, non-Meta devices, too. “The VR chipsets that are being designed as part of this collaboration are not exclusive to Meta, but we’re excited to work together on a deeper engineering level that’s a first for both companies. It’s this type of collaboration that’s foundational for the metaverse and we can’t wait to show you what we’ll build together.”

      Wouldn’t be surprised if Meta’s chip orders were prioritised though.

    • Christian Schildwaechter

      I don’t thing the Meta dominance in any way qualifies as a monopoly. They have been the most successful player for about three years, largely because they were willing to significantly substitute their devices, causing most others to retract to the professional market with sustainable margins. But they still “only” got about 50% of the market, seemingly didn’t achieve their growth goals, now raised their prices and will soon release a very expensive HMD targeting the professional market too. They now also face more fierce competition from a Chinese social network with similar deep pockets, but much higher growth rates, and the (currently, depending on oil and gas prices) most valuable company in the world.

      We don’t like monopolies because they allow companies to enforce their rules with no way for customers to evade them, usually increasing costs. So far the opposite has happened, Meta pretty much payed billions to get people on board and it still wasn’t enough.

      If you were referring to Qualcomm: there are plenty of other mobile SoC manufacturers, Apple and Samsung being the most prominent, or AMD with x86 APUs, but also companies like MediaTek who for a long time only dominated the low and mid range smartphone market, but now with their 2022 Dimensity 9000 are beating the Snapdragon 8 Gen 1 in benchmarks by a lot, making MediaTek second only to Apple silicon in performance. And like the SD835 in the Quest 2 has shown, you don’t actually need a dedicated XR chip, any smartphone SoC can do.

      Qualcomm’s current dominance comes mostly from them being a traditional leader in high performance mobile chips (which is changing) and the XR market simply being too small for other manufacturers to release dedicated SoCs. The non-exclusive deal with Meta hints that the investment actually has to be spread, selling the SoCs to Meta only doesn’t generate sufficient unit numbers, which means the next Qualcomm XR SoCs will see the same widespread use as the XR2. Not because Qualcomm is the only option, but because it the option that requires the least extra development costs that would be hard to recoup in a niche market.

  • Till Eulenspiegel

    Meta’s end game strategy is the Metaverse. They don’t care if their headset loses to Apple or any other companies in the future. They don’t make money from the hardware, they bought Oculus to kick off their Metaverse business.

    I think they are actually happy that Apple is launching their own headset – it will bring VR/AR to the mainstream. Eventually Meta will let go of their hardware business and bring their Metaverse to other dominating headsets.

    • Sven Viking

      While in general I expect it’s very true that they’d be happy for Apple to make XR more mainstream, if it was before their Metaverse is so well-established that Apple has to support them, there’d be some risks involved. Even when there was considerable demand for Flash support (because many sites were unusable without it), Apple resisted it and that contributed to the demise of Flash for example. If Apple controlled a significant chunk of the hardware market they could make things more difficult for Meta’s initial Metaverse attempts if they wanted.

      • Till Eulenspiegel

        Apple rejected Flash was not a business decision. According to Steve Job’s biography, Steve held a grudge against Adobe because they initially refused to make softwares for OSX – it was a brand new Unix OS, Adobe had to code everything from scratch, it costed them a lot of money.

        Flash was created by Macomedia, after Adobe bought Macromedia they tried to bring it to iOS. Steve gave excuses for rejecting it – from draining battery to security issues, but accrdding to his biography – it was a personal decision. Adobe suite was the main reason people bought Macs back then, maybe even today. Steve hated Adobe for giving him anxiety when they refused to develop softwares for OSX – he was a spiteful person.

        • Sven Viking

          Very interesting. Kind of emphasises the risk if anything.

        • Christian Schildwaechter

          That is a nice anecdote, but the reality was that Flash on mobile completely sucked. They ported it for Android and it was basically unusably slow and never got better, only worse by more and more exploits being revealed. Steve Jobs was without doubt a spiteful person, but 100% of their reasons for refusing Flash to run on iOS were technically valid.

          And even though his history with Adobe (and many others) was difficult, they always worked together. Adobe’s Postscript enabled the Apple DTP revolution and LaserPrinter in the 80’s, they were one of the few companies supporting Jobs’ next venture NeXT with porting Illustrator and the whole UI being driven by DisplayPostscript, and of course much of the creative work on MacOS heavily relies on Adobe software. Basically, if Steve Jobs didn’t shout at you at one time, you didn’t do your job right.

          Flash was a very nice format when it released for 2D animations, covering a gap that existed in HTML, but by the time the iPhone arrived HTML had caught up while Adobe had tried to turn Flash into an universal media client from 3D to DRM video streaming, barely maintainable and sucking lots of resources with horrible security.

    • kontis

      You are completely ignoring the recent ecosystems drama and Meta’s frustration of not owning any of those.

      Apple took hundreds of billions of dollars from Meta by adding a single tap in iOS and effectively locking them out of ad tracking
      (but not themselves – at the same time when Meta lost that giant ad revenue Apple increased its own ad revenue by similar amount…).

      Whoever controls the ecosystem, controls the flow of money.

      This is the reason Meta started doing hardware.
      This is the reason Gaben and Sweeney furiously attacked Microsoft for pushing UWP and Store integration in Windows 8 (but it failed, thankfully).
      This is reason Valve is doing Steam Deck.
      This is why HTC gave up partnership with Steam as quickly as they could.
      This is why Epic is suing Apple and Google.
      Etc. etc…

      • XRC

        The most recent data shows a revenue loss of $10 billion the past year

        • kontis

          I meant Meta’s market cap that fell, but you are right that the actual revenue that “transitioned” is nowhere near as high. Stock market works by its own mysterious ways…

          • XRC

            Yes massive dent in their income. Rumours swirl Google eyeing similar privacy policies…

    • Marauder Shields

      FB’s achilles heel has always been they don’t control the entry platform(read, iPhone, android, windows). Assuming XR is the next gen computing, it’s imperative that FB controls it. or they will face same cockblock from apple.

  • kontis

    Apple Silicon’s disruption is only on the CPU side, which is maybe 5 years ahead of Qualcomm.

    But VR is GPU-starved.

    – If you quadruple CPU power on Quest 2 HL Alyx will still NOT work.
    – If you quadruple GPU power on Quest 2 HL Alyx could be ported.

    Apple doesn’t have any special GPU sauce in the mobile space (by special sauce I mean something that isn’t just throwing more transistors/money at TSMC to get more perf in a chip).

    They have one impressive trick in the desktop space, which is 2 GPUs connected and acting like one (all PC vendors work on it but have yet to release a product), but even that dual chip doesn’t allow them to rival single Nvidia’s chip in the raw performance…

    • Christian Schildwaechter

      If you add about 30% GPU power to the Steam Deck HL Alyx will work. If you have a strong stomach, tweak the configuration and can handle reprojection and occasional frame drops, it works right now, with YouTube videos demonstrating it. The AMD Van Gogh APU is a 15W SoC, based on Zen 2 and RDNA 2, with faster chips already out and the next generation promising enough GPU power to run pretty much all the existing PCVR titles that stuck to the GTX 1060 entry level requirements. So we aren’t far off from PCVR capable AIO VR HMDs, and Apple already plays in GPU leagues way above that.

      • Bob

        Some gains can be clawed back through foveated rendering (up to 50% in certain scenarios) so it’s not all doom and gloom in the mobile chipset space for high fidelity VR experiences. Mesh shaders and other trickey could even potentially allow for more gains on the GPU performance side of things.

        • And CloudVR, let us not ignore the magic that is CloudVR.

        • Mradr

          DFOV really shines in having more field of view as well

      • Guest

        That’s right, in other words GPU-starved is BS. If XR is going to be a platform it’s all about CPU!

        • Christian Schildwaechter

          Don’t know how you could have come to that conclusion from what I wrote. Me saying that we are almost at the point where the base level PCVR experience becomes possible in an AIO HMD doesn’t mean that VR is CPU instead of GPU-starved. Considering that people still play NES games any discussion on minimal requirements is only relative to a specific application, but with VR using much higher resolution and requiring two images to be rendered, most SoCs designed and balanced for phones or pancake PCs will be GPU starved for typical VR apps.

          This may change over time with either special SoCs truly designed for VR/XR, or with AR requiring more CPU processing power for processing sensor data from the environment to enable rich interactions. But we are still quite some time off these two scenarios.

          • Guest

            XR/VR

          • guest

            Yeah, divide by zero error hedge!

          • Guest

            Both XR/VR and VR/XR are recursive definitions because VR is a subset of XR you smartasses!

    • Nothing to see here

      Great analysis. The only lead Apple has in GPUs is in low power usage. Their desktop GPUs lag far behind NVIDIA and AMD. Even Intel is doing better at GPUs in cost to performance than Apple. However Apple knows this and is working on high performance GPUs. We may see something new from Apple this fall or next year when they announce their new Mac Pro based on Apple Silicon. However with their lead in low power GPUs, they could unseat Qualcomm for the best XR performance.

      • Guest

        Sure, great business analysis, not technical analysis. That guy does not sound like a developer that knows where code is spending time.

    • Dave

      The issue with this conclusion is you are giving near term analysis and that’s unlikely to be an issue for Meta and Qualcomm anyway given the cost of the Apple device and lack of a mature content store. Where there is a threat would be in 15+ years time and it’s impossible to know the state of mobile GPU market then, it might be by then Apple will have a competitive product.

    • Mradr

      Its not even on the CPU side – the only thing about their CPU is just more accelerators – something anyone could do in theory. The only we don’t see larger jumps today is because mobile doesnt really need it. Its more about power usage with small jumps vs large set GPUs. Which, is something they could improve on as well with enlarging the die area for more cores/sets much like any GPU today.

  • Adrian Meredith

    Really they should have announced this 5 years ago

  • Marauder Shields

    ew, I guess Meta nailed their coffin on dealing with Qualcomm.

    Qualcomm are not known for providing cutting edge products.