Yahoo Finance Live anchors discuss Meta's $1,500 Quest Two VR headset and why investors should be skeptical of them.

Video Transcript

JULIE HYMAN: Yesterday afternoon, Meta unveiled a pair of $1,500 AR headsets that go on sale on October 25. Sozz is, of course, fired up about these things, but not because he's excited about the technology. His frustration with these is where we find his take today. I don't even know what we're looking at video of there. What was that?

BRIAN SOZZI: Well, I imagine a lot of other consumers won't know either because they're not buying these things. My take is this. I'll do a review in real time. I hate them. And I think it's an awful time for Meta to be coming out with a $1,500 product. At the same time, they're laying people off. Their stock price is down 62%. But let me set this up here and look at some of the specs on this because--

JULIE HYMAN: We don't really need anything else.

BRIAN SOZZI: Yeah, well, I'm getting there. I just want to give you a little flavor, flavor of what's coming up. So here are the specs on this. Big winner for Qualcomm, friends of Yahoo Finance-- are always on talking about their various chips. Big win for them. That is good. You're seeing 12 gigabytes of RAM. You're seeing a good bit of storage and a 90 Hertz refresh rate-- don't know what that is. But it all sounds good.

Worth noting as well, without being plugged in, this device gets 60 to 90 minutes on a full charge. To me, that's not exactly great. You plug it in. Obviously, the charge lasts a lot longer. But the specs on this are pretty impressive. That is winning high remarks. But here's why if you are an investor in Meta, you should view something like this very, very skeptically. And there I am with those goggles on, essentially covering my eyes.

First up, you're releasing an AR glasses while workers at Meta are reportedly being purged. That is the only thing we have heard out of Meta, arguably, the past month on how they're culling their workforce, focusing more on expenses. And here, you have Zuckerberg on a presentation yesterday, just championing $1,500 AR glasses. It just seems totally disconnected relative to what's happening inside of Meta, regarding even a product that is not a big sales driver for this company.

Number two, how will these glasses help get your stock price up? That is to be determined. I would argue it is products like this that are so focused on a Metaverse that doesn't even exist and may not exist for 10 years that is hurting Meta stock price, continues to hurt that stock price because dumping so much money into products like this.

And then lastly, who is spending $1,500 on these glasses in front of a recession? This is almost $500 more than the top end of an iPhone. I think it's a very limited market, at least, right now. You can't wear these outside per se. You're not walking around your office in them, per se. So it's a very limited, high end focus, usually, I would say, dedicated to tech geeks.

Overall, now, there are some sales behind this as well. I pulled up IDC. Worldwide shipments of augmented reality headsets are forecast to decline, to decline 8.7% year over year to about 260,000 units by the end of this year. So here's a $1,500 product into a potential recession in a market that is not really growing, clearly. That is coming from IDC. And also as well, in the first half of this year, the top five AR headset makers weren't Meta. You could see Microsoft on there. Rokid--

JULIE HYMAN: Well, because they didn't--

BRIAN SOZZI: Shadow Creator.

JULIE HYMAN: They weren't really making-- or they've been making them yet?

BRIAN SOZZI: They've had these glasses. This is just the latest iteration.

JULIE HYMAN: Ah.

BRIAN SOZZI: So the market is telling you, the market is not growing. And this is a product that consumers are not necessarily out there buying. My take is on this-- maybe not a shocker. Come on, Mark Zuckerberg, Apple's going to crush you anyway.

At some point, Apple's going to come out with actual glasses, whether they look like Google Glass, whatever they are, that is going to pummel anything that Meta could possibly come up here. You're going to probably be able to wear these glasses out in public. They're going to look like glasses. They're going to do, like, big, cool things. And you're not going to need these things. I mean, total waste of time. Total waste of time.

BRAD SMITH: I think I'm in the same boat in not being sold. However, I would argue that if you saw more corporate purchases because the starting point--

JULIE HYMAN: I know. I'm like, what is wrong with this?

BRAD SMITH: I'm going to let that slide. If the starting point, at least, as an entryway for them, is not just going to the individual consumer, but going to the corporate consumer and saying, if you want more collaboration, you have to do it through the tools that you're giving your team.

The reason that you saw so many IBM ThinkPads being able to be sold, especially in the era when so many companies were navigating over to, whether it be a Lenovo or an Apple MacBook Pro for their employee base, it's because they were able to just say, all right, let's just buy these in wholesale. Let's buy these in bulk, and then we know we can run all of our applications on that. Now, we all know what the way of the IBM ThinkPad went. But if there's an entry point, it could be more on the corporate side than on the individual side.

JULIE HYMAN: But what in the world is the value proposition? And I know this is something Zuckerberg said. You can have meetings in the Metaverse.

BRAD SMITH: Sure.

JULIE HYMAN: Why?

BRIAN SOZZI: I'm so happy you agree with me on this one. This makes me so excited.

JULIE HYMAN: Why? Why would you have meetings in the Metaverse when you can have a Zoom--

BRIAN SOZZI: Or do it in real person.

JULIE HYMAN: Or do it in person? Right, it just-- that proposition doesn't make any sense to me. Now, to be clear, Zuckerberg has said this is a longer-term bet. It's something that is not going to create value necessarily for the company in the short-term. You know, and while that may be true, in the meantime, it's causing issues for the company.

Not just the points you were making, there is also reportedly employee dissatisfaction with this strategy that the company has taken. And as we know, even with the cutbacks that we've seen in Silicon Valley, there's still a war for talent that goes on. So if you're losing people because they don't think they're on the right track, that's a problem.

BRIAN SOZZI: Simple analysis here-- we had that Piper Sandler survey yesterday, and it showed that Instagram is in third place behind Snap and TikTok. How do these $1,500 glasses help get Instagram back into first place? How does it make Facebook more relevant again where it's number one? I don't see it. And that is a big problem. That is the biggest thing that is hanging over Meta stock price right now-- too high expenses and slowing growth in Facebook and Instagram.

JULIE HYMAN: Well, do you think all the grandparents who are on Instagram or on Facebook are going to buy these?

BRAD SMITH: No, I don't think they're going to buy them. Not at all.

JULIE HYMAN: No.

BRAD SMITH: Not unless they need them. Not unless they need them for work.

JULIE HYMAN: It was sort of a rhetorical question.

BRIAN SOZZI: A quick plug, too. If you want to follow more of my product reviews, just go to LinkedIn. I have more. I usually post them all there.

JULIE HYMAN: Really?

BRIAN SOZZI: No.