Mashable: Apple is rumored to unveil its AR headset at its WWDC developer conference next month, which could seriously threaten Meta’s dominance in the VR and AR space.

Meta may soon join forces with Magic Leap, one of the pioneers of augmented reality (AR) technology, to fend off competition from Apple and other rivals in the emerging metaverse market. The Financial Times reports that the two companies are in advanced talks to sign a long-term deal that would involve licensing and manufacturing of AR components.

The sources familiar with the negotiations say that the deal is unlikely to result in a co-branded headset, but rather give Meta access to some of Magic Leap’s cutting-edge optical tech. Magic Leap, which has raised over $3 billion from investors including Google and Alibaba, has developed a proprietary light-field display that creates realistic holograms in the user’s field of view. The deal could also help Meta produce more VR and AR devices in the US, reducing its reliance on Chinese suppliers amid geopolitical tensions.

According to the Financial Times, Magic Leap has reported an increased interest in its intellectual property (IP) and manufacturing expertise from various sectors within the industry. In a previous blog post, Magic Leap's CEO, Peggy Johnson, stated that the company is redirecting its attention from the consumer market to enterprise markets. Furthermore, Johnson mentioned that there has been a remarkable level of interest from different industry players to license their IP and leverage their patented manufacturing process in order to develop optics for their own mixed-reality technology ventures.

The timing of the report is interesting for several reasons. Meta, which recently rebranded from Facebook, is under pressure from investors to show some returns on its massive investments in the metaverse, which CEO Mark Zuckerberg sees as the future of computing. The company spends about $10 billion a year on its Reality Labs division, which develops VR and AR products such as Oculus Quest and Project Aria. However, Meta does not expect to make a profit from its Metaverse ventures for several more years.

Meanwhile, Apple is rumored to unveil its AR headset at its WWDC developer conference next month, which could seriously threaten Meta’s dominance in the VR and AR space. Apple has a reputation for creating sleek and user-friendly devices that appeal to mass consumers, while Meta has been struggling with privacy and trust issues. Other tech giants such as Microsoft, Google, and Amazon are also working on their own AR products, making the market increasingly crowded and competitive.

Meta may hope that by partnering with Magic Leap, it can gain an edge over its rivals and secure its position as a leader in the metaverse. But whether that will be enough to win over consumers and developers remains to be seen.