War in Ukraine is fueling VR investments

Good morning!

War and ongoing geopolitical tensions are once again driving increased investment in tech-military hybrid companies, while, on the flip side, the unsurprising news emerges that Meta's Reality Labs department is continuing to incur losses this quarter.

Today’s Topics:

• 💼 War in Ukraine is fuelling VR investments

• 📉 Meta is losing even more money!

• 🔭 How Nokia Powers the Industrial Metaverse

Reading time: 5min

💼 War in Ukraine is fuelling VR investments

Drones have become a dominant force in modern warfare, particularly in the Ukraine conflict. As a result, the defense industry is booming, and unsurprisingly, startups like Quantum Systems are set to profit.

Details:

• German drone startup Quantum Systems has raised €63.6 million in Series B funding, bringing its total funding to over €100 million 💰.

• The company is known for its innovative dual-use drone-robotics technology, offering advanced multi-sensor solutions for both government and commercial clients 🔍.

• ​​The company specializes in small, versatile Unmanned Aerial Systems (sUAS), including eVTOL models, equipped with real-time AI data processing 🤖.

• The company recently secured a substantial contract with the German Armed Forces for Vector reconnaissance drones, strengthening European security 🛡️. This partnership involves AI and swarming technologies.

• Quantum Systems is committed to global leadership in AI-powered drone-robotics, focusing on deep system integration, unified software development, and Drone Ports 🛫.

Why it matters: Quantum Systems' successful funding round highlights the growing interest and investment in XR/AI-powered drone technology. The company's dual-use approach has applications in various sectors, from defense to commercial use cases, making it a player in strengthening European and Western tech resilience.

📉 Meta is losing even more money!

In Meta's Q3 earnings report, the Reality Labs XR division revealed a sharp drop in revenue just before the launch of Quest 3, raising questions about the impact of new hardware on the upcoming holiday season 📊.

Details:

• Despite a strong showing when Quest 2 was the flagship product, the Reality Labs division witnessed a consistent decline in revenue as the headset aged.

• Q3 2023 saw a significant drop to $210 million 💰, marking a 27% year-over-year loss and the lowest point since Meta began reporting Reality Labs revenue in Q4 2020.

• Due to substantial ongoing investments in Reality Labs, the division reported a substantial loss of $3.74 billion in Q3 2023, extending the trend of significant losses over the past 12 quarters 💼.

• Meta had cautioned investors that these investments might not yield substantial returns until the 2030s 📅.

• Quest 3 and Meta's Ray-Ban smartglasses launched just after the end of Q3, so their impact on revenue won't be evident until the Q4 earnings report.

Why it matters: The decline in Reality Labs revenue just before the Quest 3 launch raises questions about the division's profitability. All eyes are now on the upcoming holiday season to determine the impact of new hardware and whether it can reverse the trend of declining revenue.

🔭 How Nokia Powers the Industrial Metaverse

The industrial metaverse is set to reshape industries with the integration of technologies like XR, 5G, IoT, AI, and more. Nokia is positioning itself to facilitate this transformation through network infrastructure and partnerships 🏭.

Details:

• Defining the Industrial Metaverse: Nokia sees it as blending physical, digital, and human capabilities for industry. It demands high-performance, secure, low-latency networks 📡.

• Network Challenges: Infrastructure must handle high-capacity data, integrate tech, and merge IT and OT. New tech like 5G and quantum-safe encryption presents opportunities and challenges 💡.

• Deployment: Start small with pilot projects and engage stakeholders. Scalability, capacity, and organisational change are essential 🏗️.

• Digital Twins: These virtual replicas enhance real-time analysis, simulation, and reduce waste in various industries 👥.

Why it matters: The industrial metaverse represents the future of industry, and Nokia's expertise in network infrastructure and collaboration with the OpenRAN Alliance positions it to play a vital role in enabling this transformation.

If you are interested in learning more check XR Today’s interview with Thomas Hainzel, Head of Digital Industries Evolution & Partnerships, at Nokia: here