Meta’s effort to build the Metaverse is a way to regain control of consumer data from Apple, experts say.
The attempt to gain competitive advantage over Apple is reminiscent of Google’s efforts to build Android.
Google’s efforts paid off, but it’s likely that Mark Zuckerberg learned the wrong lessons from recent history.
Meta wants take control away from apple.
From the company multi-billion dollar effort to build the Metaverse and its decision last year to rebrand from Facebook to Meta is a way to regain control of consumer data from Apple’s clutches, experts say.
It’s similar to why Google developed Android, but Mark Zuckerberg’s project seems to be missing a key ingredient that made Android successful.
Apple’s change screwed up Facebook’s business model
“Apple essentially reverted Facebook’s returns to the mean because they removed a massive data source in terms of accessing app user data,” said Mark Zgutowicz, Meta analyst at Benchmark.
The change could come at a threatening cost to Meta.
More than 95% of the company’s revenue comes from mobile devices, according to Needham technology analyst Laura Martin. Meta’s COO told investors that Apple’s new policy will lead to a $10 billion drop in revenue in 2022.
“Meta’s goal is to replace the centrality of Apple’s smartphones in consumers’ lives,” Martin wrote in a note to investors recently.
Android vs Metaverse
Google would have created Android more than ten years ago for the same reason: to compete with Apple.
In 2007, Google scrapped its planned first iteration Android phone just before launch and redesigned it to look like the sleeker first-generation iPhone, according to the book aerial combatby journalist and author Fred Vogelstein.
Steve Jobs, co-founder of Apple, was would have been furious by Google’s introduction of Android, which it believed to be an illegal copy of the iPhone, calling it a “stolen product”, according to Walter Isaacson’s 2011 book, Steve Jobs.
However, there is one main difference between Google’s attempt to escape Apple’s supremacy and Meta’s gamble: there was already evidence of consumer demand for the product that Google allegedly duped. Apple had sold 1 million of its first-generation iPhones just 74 days after launch.
Google’s pivot paid off. Does Meta?
Google saw where Apple was going and continued to develop its Android platform to match Apple’s iOS. The company also continued to invest in the manufacture of its smartphonesa device he knows people want.
Google’s bet paid off. Android is now the dominant mobile operating system worldwide.
But Google was a fast follower; The pivot of Meta might be more dangerous because it invests in a largely untested product: the metaverse.
“It’s an extremely huge risk, and I think the main risk is that there are no tangible assets right now,” Zgutowicz said.
Some Wall Street analysts are skeptical of Meta’s success.
“Even if the Metaverse turns out to be the immersive hardware-based vision that Meta articulates, will Meta really be the winning hardware provider for consumers?” Martin asked in a recent note.
While sticking to the old business model under Apple’s new privacy regime would likely have cost Facebook billions in lost ad revenue, building an entire virtual world from scratch isn’t not exactly cheap.
Meta a reported more than $19 billion in losses of its metaverse business unit since early last year, putting off many investors, including one who wrote an open letter to Zuckerberg to urge him to stem the losses. Meta’s stock is down more than 70% so far this year.
Read the original article at Business Intern