The smart glasses industry has long been a tortured dream of Silicon Valley. The premise is pretty compelling: What if, to enjoy the benefits of portable computing, people didn’t have to stare at their phones all day and could instead simply wear a lightweight computing device on their face? Sci-fi fans (a demographic that is strong in the tech industry) can see this vision perfectly.
However, the industry – for much of the last decade – looked like an economic black hole in which huge investments have been sunk and from which little or no profit has ever arisen.
“Everyone is losing money,” said Chi Xu, founder and CEO of smart glasses company Xreal, which is a longtime Google partner. I caught up with Xu at Google’s I/O conference in Mountain View last week, where he was promoting Xreal’s Project Aura. This is her latest effort to create a set of functional XR glasses that people actually want to use.
“That’s because what we do is very difficult,” he said.
For much of the industry’s existence, the problems with smart glasses seemed somewhat obvious: bulky, awkward, and socially awkward form factor, combined with negligible beneficial software. Now, however, industry insiders – including Xu – feel their business has turned a corner and may be reaching a tipping point.
This supposed turning point has to do with Meta, whose partnership with Ray-Ban began in 2023 one of the first series of models which actually managed to sell a lot of units. (It is worth noting, however, that the division Reality Labs, responsible for the glasses, is still operating at a huge loss.)
Now, as form factors shrink and software improves, Xu believes Xreal can finally become a leader in the space. “You need all the key pieces ready — you need the hardware ready, the operating system needs to be ready, and then you need a great user interface,” Xu said.
Xreal’s newest Aura model are wired smart glasses that have built-in OLED displays, meaning you can watch high-resolution video within the frames themselves. Somewhat clumsily, the Aura comes bundled into a “package” — essentially a phone-shaped mini-computer that powers the experience behind the glasses. When you use it, you can seemingly put it in your pocket.
But in exchange for the clumsiness of the elf, the user gets a wider variety fun experiences with glasses, including an immersion Google Maps appYouTube VR videos, and a “painting app” that lets you — through the power of hand tracking — create holographic images that only you can see. There are also according to information games, playable (again) via hand tracking and basic web browsing functionality.
“Whether you’re following a floating recipe while cooking, creating a private workspace in a coffee shop or on a flight, or watching a movie on a virtual big screen at home, the experience is seamless. the company promises.
Xu also says he envisions the device being used not only by the average consumer but also by professionals. “It’s not just watching the NBA game in hologram form, you can also go to a coffee shop and do some work,” he said.
For now, the glasses are only available to developers, but the plan is to have them commercially released later this year. Xreal is also working on an IPO that is expected to take place before the end of 2026, although Xu declined to say much about that.
Meanwhile, the company is working on all this profitable. Xu notes that his company is increasing its gross margin while reducing its marketing and sales costs. “Next year is the year we could really break even,” he says.
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