LG ends XR partnership with Meta; Amazon emerges as new partner

South Korean tech giant LG Electronics Inc. has ended its extended reality (XR) partnership with Meta Platforms Inc. three months after they agreed to jointly develop XR devices, including virtual headsets.

LG is now seeking a new partner to provide an operating system and software for XR devices LG plans to unveil next year. Amazon, another US Big Tech firm, is emerging as a candidate, people familiar with the matter said on Monday.

In late February, Mark Zuckerberg visited Seoul and met with LG Chief Executive Cho Joo-wan, also known as William Cho, and LG Corp. Chief Operating Officer Kwon Bong-seok to discuss a stronger partnership in XR devices.

LG Electronics said at the time that the leaders agreed to jointly develop next-generation XR devices, including an XR headset, and cooperate in artificial intelligence devices.

LG and Meta said they will leverage their hardware technology and AI expertise, respectively, to release an XR headset in the first half of 2025 and outdo Apple Inc.’s latest mixed reality (MR) headset Vision Pro in terms of performance.

LG SEES LITTLE SYNERGY

XR is a catch-all term that covers technologies like virtual reality (VR) and augmented reality (AR).

Industry sources said LG recently discontinued collaboration with Meta regarding the development of XR devices.

“There were some differences between LG and Meta while discussing XR devices. I understand LG requested an end to collaboration because it believed there was not much synergy from their XR partnership,” said an industry source.

Industry officials said a successful LG-Meta partnership would have seen LG using Meta’s OS Horizon embedded in the Meta Quest Pro XR device in the Korean firm’s new XR devices.

Meta, in return, could use LG’s extensive global electronics goods sales network and advanced OLED panel technology for XR devices.

LG Group affiliates such as LG Display Co. and LG Innotek Co. are leaders in the XR headset component business.

LG Display is developing micro-organic light-emitting diode (OLEDoS) technology, while LG Innotek, a camera module maker, is a global leader in premium lens manufacturing.

AMAZON

Sources said LG Electronics is already seeking a new business partner for its XR headset business.

Industry officials said Amazon could be one of the most likely candidates given its over-the-top (OTT) service Amazon Prime with over 200 million subscribers worldwide. A strong OTT subscriber base is key to the successful launch of an XR device, industry watchers said.

Since Amazon does not have an XR operating system, there is a possibility that Google’s Android will be used as the OS for LG’s next XR headset, sources said.

LG Electronics may pursue independent development instead of collaboration as LG has its own WebOS used in its TVs.

Many tech firms, including Google, Amazon, Apple and Microsoft, are developing VR and AR devices to build their own metaverses.

Sony Corp. of Japan, in partnership with Germany’s Siemens, plans to launch an XR head mount later this year.

Meta may be seeking a partnership with China’s Tencent for an XR partnership, industry watchers said.

Samsung Electronics Co. has joined forces with Google and Qualcomm Technologies to unveil an XR device next year.

In October 2022, Samsung Chairman Jay Y. Lee met with Meta’s Zuckerberg in Silicon Valley to discuss a possible business tie-up, including joint work on Meta Quest Pro.

Samsung Display Co., Korea’s largest display maker, said in 2022 that it is building a production facility for Micro OLEDs, a next-generation display technology, suitable for VR and AR wearable devices.

According to market research firm IDC, the global XR device market is forecast to grow to $35.7 billion by 2026 from an estimated $18.2 billion this year.

Write to Chae-Yeon Kim at why29@hankyung.com
In-Soo Nam edited this article.