Samsung Electronics plans to launch its extended reality headset next year, developed in collaboration with US tech giants Google and Qualcomm Technologies. The launch is expected to intensify competition with Apple's Vision Pro and Meta's Quest.

At the "XR Unlocked" developer event on Thursday at Google's New York campus, Google introduced Android XR, a new operating system designed for extended reality devices. Samsung also unveiled its first device powered by Android XR -- headset codenamed "Project Moohan," meaning "infinity" in Korean. Detailed specifications and pricing have not yet been disclosed.

The XR technology offers immersive experiences by enabling users to move between the real and virtual worlds, leveraging senses such as sight, sound and motion. It is anticipated to revolutionize areas like work, education, healthcare and entertainment, breaking the constraints of physical environments.

“XR has quickly shifted from a distant promise to a tangible reality. We believe it has the potential to unlock new and meaningful ways to interact with the world by truly resonating with your everyday lives, transcending physical boundaries,” said Choi Won-joon, head of the Mobile eXperience Division’s research and development at Samsung Electronics. “We are excited to collaborate with Google to reshape the future of XR, taking our first step towards it with Project Moohan.”

Choi also stressed the scalability of the Android XR platform, which can be adapted to various form factors, supported by an expansive ecosystem and diverse content offerings aimed at enriching user experiences.

While this is not Samsung's first foray into the XR market -- the company previously collaborated with Oculus in 2014 to release the Gear VR headset and partnered with Microsoft in 2017 to launch the Odyssey Windows PC VR headset -- both failed to gain enough market attention.

For the upcoming product, Samsung has leveraged its hardware expertise, Google’s Android operating system, and Qualcomm’s Snapdragon XR2 Plus Gen 2 chipset. It also acquired US-based OLED microdisplay manufacturer eMagin last year to strengthen its XR capabilities.

The Android XR platform, co-developed by Samsung, Google and Qualcomm, incorporates multimodal AI, which allows users to interact seamlessly with external and virtual environments. Powered by Google’s Gemini AI, it supports natural conversational interactions and personalized responses by understanding context and user intent.

Currently, the global XR market is dominated by Meta and Apple, though the sector has not yet achieved widespread consumer adoption. According to Counterpoint Research, global XR headset shipments declined by 19 percent on-year, mainly due to a lack of use cases beyond gaming.

Apple’s Vision Pro, launched in February, faced a lackluster reception, selling fewer than 100,000 units per quarter, according to IDC. The device's high price tag of $3,499 targeted early adopters, though Apple is reportedly working on a more affordable model to be released next year.

Meta, holding about half of the XR market, has found greater success with its Quest 3 headset, priced competitively at $499. In the fourth quarter of 2023 alone, over 2 million units were shipped, highlighting a significant price advantage over Apple’s Vision Pro.

Samsung’s latest XR venture aligns with its long-term vision for growth. According to Growth Research, global shipments of VR and augmented reality devices exceeded 10 million units last year and are projected to surpass 30 million by 2027.

Market research firm Mordor Intelligence estimates the XR market will grow at a compound annual growth rate of 34.9 percent, reaching $472.4 billion by 2029, up from $105.6 billion this year.

“Despite the challenging market conditions following the lukewarm reception of Apple’s Vision Pro, both Apple and Samsung appear committed to exploring ways to expand AR experiences for consumers,” said Nam Sang-wook, a researcher at the Korea Institute for Industrial Economics and Trade.

“With the market still in an early stage, it remains to be seen how Samsung plans to differentiate itself through innovation,” said an industry source, who asked for anonymity.