The smart glasses hype with AR and AI: Why tech giants are now afraid of missing out – Image: Xpert.Digital
Race for users: How smart glasses are increasing the pressure on the technology industry
FOMO drives tech giants: The smart glasses revolution will escalate in 2025
The year 2025 will be all about smart glasses, and there's a palpable sense of nervousness in the executive suites of major technology companies. The race for users' attention has reached a new peak, as smart glasses appear to have the potential to fundamentally change the way we interact with technology. This development is fueling a veritable "Fear of Missing Out" (FOMO) among the tech giants, driving them to enter this burgeoning market with all their might.
FOMO stands for "Fear of Missing Out" and describes the anxiety of missing out on something that others experience, have, or know. This phenomenon often occurs when people see what others are doing or own on social media and feel like they don't "belong" or are missing out on important opportunities. In a technological context, FOMO means that companies or individuals feel pressured not to miss out on new trends or innovations in order to stay ahead of the competition or the market.
The technology sector is in a state of constant innovation, and those with a keen sense for emerging trends can secure a decisive competitive advantage. Smart glasses are considered the next big thing, with the potential to replace smartphones in certain applications or at least complement them effectively. The idea of a competitor dominating the market while they lag behind is simply unbearable for established players. This pressure to be at the forefront is fueling the current development and the entry of numerous companies into the smart glasses market.
The unprecedented success of Meta's Ray-Ban Smart Glasses
A key driver of the current flurry of activity is the impressive success of the Ray-Ban Meta smart glasses. The collaboration between Meta and the eyewear giant EssilorLuxottica has proven to be a real stroke of luck. These smart glasses have become veritable bestsellers in many Ray-Ban stores across Europe, the Middle East, and Africa. Sales have already surpassed one million units, and even higher figures of over two million units are projected for 2024. This success vividly demonstrates the growing consumer interest in this new technology and confirms the market's potential. One could argue that the Ray-Ban Meta smart glasses have proven that smart glasses are no longer a distant vision of the future, but rather a relevant product category today.
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The reactions from the competition were not long in coming
Meta's unexpectedly huge success has caused a stir throughout the technology industry and alarmed numerous competitors. The fear of falling behind and missing out on a lucrative market segment is now driving other tech companies to invest more heavily in the development and marketing of their own smart glasses. For example, the Chinese technology company Baidu has already unveiled AI-powered glasses designed to excel, particularly in the area of intelligent assistance systems. Amazon, known for its omnipresence in retail and its logistics division, is also reportedly working on smart glasses for its delivery drivers to make their workflows more efficient. Furthermore, persistent rumors suggest that tech giants like Apple, Samsung, Xiaomi, and Google are also intensively researching and developing their own smart glasses products. It seems only a matter of time before these companies present their own visions of smart glasses to the public.
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Challenges on the road to market maturity
Despite the undeniable hype and growing interest, significant challenges remain that hinder the widespread market penetration of smart glasses. A key issue is profitability. Meta's Reality Labs division, where smart glasses development is based, is projected to incur astronomical operating losses of around $60 billion in the coming years. This illustrates that the development and production of this complex technology involves immense costs, and it will take some time before these investments pay off.
Although the gross margin of Ray-Ban Meta Glasses is a respectable 45 percent, even exceeding the margins of Apple's smartwatch, continuously reducing the costs of essential components such as processor chips and batteries without compromising the performance and functionality of the devices presents an immense challenge.
Manufacturing advanced AR and VR headsets with superior performance remains a costly endeavor. The estimated production costs for high-end models like Meta's "Orion" headset are reportedly around $10,000 per unit. These high costs are primarily due to the use of expensive materials and complex manufacturing processes. Furthermore, enormous investments in research and development are necessary to continuously improve the technology and integrate new, innovative features.
Another problem is the limited battery life of many current smart glasses models. Often, they only offer a usage time of around two hours, which is simply insufficient for the everyday use of most consumers. Developing more powerful batteries that are also lightweight and compact is a challenging technical task.
There are still hurdles to overcome regarding technical possibilities. Finding the optimal balance between field of view and resolution is a tricky business. Furthermore, integrating advanced technologies like micro-LED displays (LEDoS) requires extremely complex design and manufacturing processes.
A crucial factor for market success is a vibrant application ecosystem. However, many manufacturers have yet to develop a comprehensive set of applications and services for their smart glasses. Without clear added value through useful applications, it will be difficult to convince the general public of the benefits of this technology.
The intense competition between large technology companies like Meta, Apple, Google, and other providers is also creating significant price pressure. These companies face the challenge of developing innovative products while simultaneously offering competitive prices.
Regulatory hurdles can also influence market development. For example, export restrictions on certain materials such as silicon carbide can further increase production costs and place additional strain on supply chains.
Consumer concerns regarding data privacy should not be underestimated. The idea of constantly being accompanied by a camera that might be recording or collecting data raises skepticism among many people and could negatively impact the acceptance of smart glasses.
The high operating losses that even established companies like Meta are experiencing in their AR/VR divisions highlight the economic challenge facing the industry. To be successful in the long term, manufacturers must find innovative solutions to reduce costs, continuously improve technology, and simultaneously maximize consumer benefits. The challenge will be to create a product that is not only technologically impressive but also offers genuine added value in people's everyday lives.
The potential and future of smart glasses
Despite the existing challenges, the potential of smart glasses is immense. They could play a key role in various areas in the future, from navigation and information retrieval to augmented reality applications in industry and education. The ability to display information directly in the field of vision or to interact with virtual objects in the real world opens up entirely new perspectives. It's conceivable that smart glasses will become an indispensable part of our everyday lives, much like smartphones are today. However, it will take some time and considerable effort before this vision becomes reality. The current hype and the FOMO of the tech giants are a clear indication that development is well underway and that we can expect exciting innovations in the field of smart glasses in the coming years.
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