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Meta Strikes Deal With Tencent To Re-enter Chinese Market After 14-Year Ban

The metaverse company aims to dominate VR headset sales in the Chinese market 

Facebook parent company Meta has struck a deal with Chinese conglomerate Tencent to commence the sale of a new and less expensive version of its virtual reality headset next year. 

As reported by the Wall Street Journal, Meta intends to employ more affordable lenses compared to those in its Quest 3 VR headset, and it is expected to dominate the majority of sales. Tencent, on the other hand, is projected to claim the majority share of revenue from content and services. 

The agreement follows nearly a year of negotiations between the tech giants and comes 14 years after China expelled Facebook. It seems that forming partnerships with Chinese companies is the sole avenue for significant US tech firms to establish a presence in the market.

A restricted market 

For several years, China has effectively prohibited most US tech companies, with Apple being a notable exception, from conducting business within its borders. The communist-led nation has upheld a Great Firewall, imposing stringent restrictions on the platforms and websites permitted to operate within its jurisdiction.

Domestic players like Tencent, Baidu and Alibaba dominate the market, with the government historically limiting the operations of foreign firms, including Meta.

In 2009, ABC News reported that the Chinese government barred Facebook in the wake of protests in Urumqi, Xinjiang province. The protests began after the death of a Uyghur factory worker in China and perceived governmental inaction.

Apple, however, has a longstanding reliance on China for the production of iPhones, iPads, AirPods, and Macs, with a significant dependence on the Taiwanese electronics company, Foxconn. Notably, in the second quarter of 2023, Apple sold more iPhones in China than in the United States.

Meta continues to generate revenue from China by selling Facebook and Instagram ads to Chinese companies.

Written By

Isa Muhammad is a writer and video game journalist covering many aspects of entertainment media including the film industry. He's steadily writing his way to the sharp end of journalism and enjoys staying informed. If he's not reading, playing video games or catching up on his favourite TV series, then he's probably writing about them.

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