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- Meta is making a comeback to China 14 years after Facebook was blocked from being accessed there.
- The firm has struck a deal with Tencent to sell VR gear in 2024, The Wall Street Journal reported.
- Deals with Chinese firms are among the few ways big US tech companies can get a foothold there.
Meta has found a way to claw its way back into China.
The Facebook owner has cut a deal with Chinese conglomerate Tencent to start selling a new and cheaper version of its virtual reality headset in late 2024, The Wall Street Journal reported.
Meta plans to use cheaper lenses than the ones it uses in its VR headset Quest 3, and it will have the lion's share of sales. Tencent, one of the world's biggest video game vendors, will have the majority split from content and service revenue, the report said.
The agreement comes after almost a year of negotiations between the tech titans, and 14 years after China gave Facebook the boot.
Striking a deal with domestic Chinese firms appears to be the only way for major US tech companies to get a foothold in the market.
China has largely banned US tech firms, bar Apple, from doing business there for several years. The communist-run country has maintained a "Great Firewall" by enforcing tight restrictions on what platforms and websites are allowed to operate there.
Domestic players such as Tencent, Baidu, and Alibaba dominate China, and the government has long restricted foreign companies like Meta from operating there.
The Chinese government shut out Facebook in 2009, following protests that broke out in the Xinjiang province, Urumqi, ABC News reported at the time. The protests came after the death of a Uyghur factory worker in China and the perceived inaction from the government.
Apple has a long-standing dependence on China for manufacturing its iPhones, iPads, AirPods, and Macs, and it particularly relies on Taiwanese electronics firm Foxconn. In fact, more iPhones were sold in China than the US in the second quarter of this year.
Meta still extracts cash out of China through Facebook and Instagram ads it sells to Chinese companies.
CFO Susan Li told investors in Meta's third-quarter earnings call that its gaming and commerce segments "benefited from strong spend among advertisers in China" and that their spending "accelerated" for the company in the third quarter.
Meta didn't immediately respond to Insider's request for comment, made outside of normal working hours.