On November 18, renowned AR manufacturer Rokid, in collaboration with the fashion eyewear brand BOLON (Baolong) under Essilor, released an AR+AI glasses model.

Earlier, Meta extended its partnership with Essilor Luxottica until 2030, and Rokid followed suit. Regardless of Meta and Rokid, the trend of smart glasses has indeed propelled Essilor into the limelight.

Although Rokid cleverly circumvents the current awkwardness of AR glasses with its "all-day wear" claim, we can see from its split design that it may still not be suitable for prolonged use. If Rokid's AR glasses aim for a novel experience, other manufacturers seek functional breakthroughs.

A week ago, at Baidu World, Baidu's AI assistant brand Duer released its first AI glasses, expected to hit the market in the first half of next year. While many manufacturers are betting on cool AR glasses, Duer focuses on AI functionality and wearing comfort. Considering Xiaomi's entry into this field, the era of AI glasses is imminent.

Part of the reason may be due to the unsuccessful attempts at AR/VR, as novel experiences and flashy appearances fail to convince users to pay, and there are still many gaps to bridge before reaching the mass market.

Giants Hunt for AI Glasses

According to the Bezier Smart Glasses Market Research Report, the smart glasses market is expected to reach 106.778 billion yuan by 2029, with a compound annual growth rate of 18.56% during this period. Such a high-growth market space and potential market size are sufficient to support several companies.

Ray-Ban Meta's performance has injected another boost into the market. By May, shipments had exceeded one million, with an expected shipment of over two million by the end of the year. Interestingly, at Meta Connect 2024 in late September, Zuckerberg seemed to prioritize AR/VR glasses, specifically Quest 3S and the AR prototype Orion, over the popular AI glasses.

During the two-hour event, Ray-Ban Meta was mentioned for less than 10 minutes, with the major highlight being its accessibility for the blind.

Whether it's AR/VR or AI glasses, companies like Meta, Rokid, and Duer have entered the smart glasses market driven by two core factors: optimistic market expectations and the low level of intelligence in glasses among wearable devices, which means it's easier to deliver a game-changing experience. Additionally, glasses provide a more immersive experience compared to other products, offering vast opportunities for innovation in applications, interactions, and even AI implementation.

Besides the above factors, the maturity of the hardware and software industries also acts as a catalyst for the surge in AR/VR and AI glasses.

One notable trend is the diversification of AR glasses chips after miniaturization. Options range from cost-effective MTK solutions based on MediaTek to high-performance Qualcomm solutions. Amid the backdrop of self-sufficiency and domestic substitution, there's also Unisoc's W517.

SoC chips and optical display modules account for a significant portion of the cost, with SoCs comprising about 35% and optical modules, affected by yield rates, accounting for up to 43% of the cost. This means that AR glasses do not have an advantage in cost-effectiveness in the short term, whereas AI glasses offer a more affordable price and are easier to popularize.

On the software front, rapid advancements in AI model technology, including multimodal, reinforcement learning, speech recognition & semantic understanding, provide broader imaginative space for AI to reshape smart glasses. In fact, the rapid iteration of large AI models has overtaken the bumpy AR route.

Currently, the smart glasses market presents two distinct paths. One is the lightwave guide solution for enhanced display and optical display solutions represented by Birdbath, with products like Meizu StarV View, XREAL Air 2, and Huawei VR Glass. This path focuses on a novel visual experience, with its advantages concentrated in immersive entertainment and gaming.

The second path, which has gained momentum in the past two years, is AI glasses that do not enhance display but rely on AI voice for human-computer interaction. Although lacking the immersive experience of AR glasses, they offer a unique intelligent experience.

Meta is a representative company that simultaneously deploys both AI and AR/VR glasses. "Ray-Ban Meta is first and foremost a comfortable pair of glasses," said a domestic AI glasses manufacturer. Building on solid hardware, this AI glasses model achieves impressive sales through low-latency response and essential functions like listening to music and making phone calls.

Finding a mature eyewear brand for hardware is relatively easy, but soft power is more challenging.

The closest to Meta might be players like Duer, which have accumulated underlying AI technology. According to PhotonPlanet, the Duer AI glasses to be released next year will not simply embed AI into hardware but systematize it.

Relying on Baidu's powerful ERNIE Bot large model, Duer has developed the DuerOS AI native operating system, which excels in natural language interaction, multimodal perception, and anthropomorphic presentation. Its leading model routing architecture (MoE) can flexibly schedule different models to solve problems of varying difficulty more efficiently, accurately, and economically.

The other camp includes manufacturers like Meizu, Huawei, and Rokid, characterized by emphasizing the "hard attributes" of intelligent hardware and integrating them into their own devices.

Can AI solve the lack of 'killer' applications for AR?

AR/VR glasses have always been a promising direction for companies to invest in, but they are constrained by factors such as product form, weight, technology, and usage scenarios. The recent situations of Apple Vision Pro and PICO reflect the challenges faced by AR/VR glasses.

According to US analytics firm Appfigures, Apple Vision Pro added only 10 new apps in September, indicating a significant slowdown in growth. Developers' enthusiasm for this new device requiring killer applications is waning. Referencing the history of iPhone and iWatch, it's easy to see that both products surpassed 10,000 apps within a year of launch. To date, however, there are fewer than 2,000 apps compatible with Apple Vision Pro.

The situation for PICO is also not optimistic.

IDC data shows that in the first half of 2023, China shipped 328,000 AR/VR headsets, with PICO accounting for nearly 60% of the Chinese VR market share. Even so, PICO is contracting its operations, restructuring, and optimizing its workforce.

High prices deter users, and regardless of Apple Vision Pro, PICO 4 Ultra's price exceeding 4,000 yuan is still not affordable. Price hinders popularization, while weight limits user experience. Due to its split design, the front-end weight of PICO, excluding straps and batteries, is 341 grams, far exceeding the weight of AI glasses, which do not exceed 100 grams. The AI glasses to be released by Duer in the first half of next year will weigh only 45 grams.

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