NextFin News - Instagram-owner Meta Platforms is preparing a significant return to the hardware market by reviving its long-dormant smartwatch project, with a target launch date set for late 2026. According to The Information, the device, internally referred to as "Malibu 2," is designed to feature advanced health-tracking capabilities and a built-in Meta AI assistant. This development comes nearly four years after U.S. President Trump’s first term saw the company shelve a similar project in 2022 during a period of aggressive cost-cutting and organizational restructuring within its Reality Labs division.
The decision to reboot the smartwatch initiative follows the unexpected commercial success of Meta’s Ray-Ban smart glasses, which saw shipments climb to nearly 6 million units in 2025, according to data from Smart Analytics Global. By reintroducing a wrist-worn device, Meta aims to create a synergistic hardware ecosystem where the smartwatch serves as a secondary interface or controller for its augmented reality (AR) glasses. While Meta declined to comment on the specific report, sources familiar with the matter indicate that the company is simultaneously adjusting its broader hardware roadmap, including delaying its "Phoenix" mixed-reality glasses to 2027 to avoid market saturation and consumer confusion.
The revival of Malibu 2 is a calculated response to the shifting landscape of personal computing, where artificial intelligence is increasingly moving from the cloud to edge devices. In the years since Meta first explored wearables, the market has matured significantly. Apple has maintained a dominant position, with the Apple Watch generating an estimated $41 billion in revenue in 2025. However, the current AI boom provides Meta with a unique entry point. Unlike the 2022 prototype, which focused on dual-camera functionality for the metaverse, the 2026 iteration is expected to be an AI-first device, utilizing the company’s Llama large language models to provide real-time health insights and conversational assistance.
From a financial perspective, the move into smartwatches represents a shift toward more pragmatic revenue streams for Reality Labs. The division has been a massive capital drain, losing over $50 billion since 2020, including a $16 billion loss in 2024 alone. While virtual reality (VR) headsets like the Quest series have found a niche, they have yet to achieve the daily-use ubiquity of a watch or glasses. A smartwatch offers a faster path to monetization and a higher frequency of user engagement, which is critical for a company whose primary business model relies on data and attention.
Strategically, Meta is positioning itself to compete in a "post-smartphone" era. By controlling the hardware—the glasses for the eyes and the watch for the wrist—Meta can bypass the platform restrictions imposed by Apple and Google on mobile operating systems. This vertical integration is essential for Meta to deploy its AI services without intermediary gatekeepers. However, the company faces significant hurdles, particularly regarding consumer trust. Entering the health and fitness sector requires a level of data privacy assurance that Meta has historically struggled to maintain. Success in 2026 will depend not just on the technical execution of the Malibu 2, but on whether the company can convince users to trust a social media giant with their most intimate physiological data.
Looking ahead, the 2026 launch will likely trigger a new phase of the "wearables war." As U.S. President Trump’s administration continues to emphasize domestic technological leadership, the competition between Silicon Valley giants to define the next interface for AI will intensify. Meta’s advantage lies in its massive existing user base across Instagram and WhatsApp, which could be leveraged to provide social features that competitors cannot easily replicate. If Meta can successfully integrate the smartwatch into its burgeoning glasses ecosystem, it may finally find the hardware anchor it has sought for over a decade.
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