Meta is pushing back the release of its next-generation mixed reality glasses, code-named “Phoenix,” from the second half of 2026 to the first half of 2027, according to internal memos obtained by Business Insider. Maher Saba, VP of Reality Labs Foundation, informed employees of the delay in a Thursday memo, signaling a strategic shift in Meta’s hardware timeline.
The Phoenix glasses feature a goggle-like design similar to Apple’s Vision Pro and are connected to an external puck that helps power the device. According to two anonymous employees familiar with the product, Meta leadership debated the puck design but ultimately retained it to keep the glasses lighter, more comfortable, and prevent overheating issues.
In a separate memo, metaverse leaders Gabriel Aul and Ryan Cairns explained that the delay would “give us a lot more breathing room to get the details right.” They emphasized that the company faces “tight bring-up schedules and big changes to our core UX” and won’t compromise on delivering “a fully polished and reliable experience.”
The decision follows recent feedback from CEO Mark Zuckerberg, who met with Reality Labs leaders to discuss 2026 plans. Saba noted that Zuckerberg’s feedback “focused on making the business sustainable and taking extra time to deliver our experiences with higher quality.” He clarified that extending timelines is not an opportunity to add more features but rather to ensure quality execution.
Meta’s Reality Labs division faces significant restructuring, with the company considering budget cuts of up to 30% that could impact employees working on Horizon Worlds, its virtual spaces platform. This comes after Meta reorganized its metaverse unit in October, appointing Aul and Cairns to co-lead the efforts.
Despite the Phoenix delay, Meta plans to release a “limited edition” wearable device code-named “Malibu 2” in 2026. The company is also beginning work on its next-generation Quest device, which Aul and Cairns described as focused on immersive gaming with a “large upgrade” in capabilities and significantly improved unit economics.
In a parallel move expanding its AI hardware presence, Meta announced Friday that it has acquired Limitless, a startup specializing in AI-powered pendant devices. This acquisition signals Meta’s continued investment in AI-integrated wearable technology, even as it recalibrates its mixed reality timeline and considers substantial cost reductions in its Reality Labs division.
Key Quotes
There’s a lot coming in hot with tight bring-up schedules and big changes to our core UX, and we won’t compromise on landing a fully polished and reliable experience.
Metaverse leaders Gabriel Aul and Ryan Cairns explained the rationale for delaying Phoenix in an internal memo, emphasizing Meta’s commitment to quality over rushed timelines as the company faces complex technical challenges.
Based on that, many teams in RL will need to adjust their plans and timelines. Extending timelines is not an opportunity for us to add more features or take on additional work.
VP Maher Saba communicated CEO Mark Zuckerberg’s feedback to Reality Labs employees, making clear that the delay is about refinement and sustainability rather than scope expansion, reflecting a more disciplined approach to product development.
Focused on making the business sustainable and taking extra time to deliver our experiences with higher quality.
Saba characterized Zuckerberg’s guidance to Reality Labs leaders, signaling a strategic shift toward financial viability after years of massive losses in the division, which has burned through tens of billions of dollars.
Our Take
Meta’s Phoenix delay reveals the harsh realities of competing in the mixed reality space against well-funded rivals like Apple. The decision to prioritize quality and sustainability over aggressive timelines is prudent, especially given the lukewarm reception of many VR/AR products. The simultaneous acquisition of Limitless demonstrates that Meta recognizes AI integration is the future of wearable computing, not just standalone mixed reality experiences. The potential 30% budget cuts suggest Zuckerberg may finally be acknowledging that the metaverse vision needs recalibration. This could mark a pivotal moment where Meta shifts from metaverse-first to AI-first in its hardware strategy, potentially salvaging billions in investments by focusing on more immediately practical AI-powered devices rather than ambitious but commercially unproven mixed reality platforms.
Why This Matters
This delay represents a critical recalibration of Meta’s hardware strategy as the company balances ambitious mixed reality goals with financial sustainability. The decision to push Phoenix to 2027 reflects broader industry challenges in bringing advanced AR/VR products to market, particularly as companies compete with Apple’s Vision Pro.
The 30% budget cut consideration for Reality Labs signals that Meta is reassessing its massive investments in the metaverse, which have cost the company billions without generating substantial revenue. This shift toward “making the business sustainable” suggests Meta may be tempering its metaverse ambitions while doubling down on more immediately viable AI applications.
The acquisition of Limitless and focus on AI-powered wearables indicates Meta is hedging its bets, recognizing that AI integration may be the key differentiator for next-generation devices. As the mixed reality market remains nascent, Meta’s pivot toward AI hardware could represent a more pragmatic path to monetization and user adoption, potentially reshaping how the company approaches its Reality Labs investments going forward.
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Source: https://www.businessinsider.com/meta-delays-new-mixed-reality-glasses-code-named-phoenix-2025-12