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 pressure on the technology industry
FOMO Drives Tech Giants: The Smart Glasses Revolution Escalates in 2025
The year 2025 will be dominated by smart glasses, and there is palpable nervousness in the executive suites of major technology companies. The race for user favor has reached new heights as smart glasses appear to have the potential to fundamentally change the way we interact with technology. This development is fueling a real “Fear of Missing Out” (FOMO) among the tech giants, which is driving them to enter this emerging market with all their might.
FOMO stands for “Fear of Missing Out” and describes the fear of missing something that others experience, have or know. This phenomenon often occurs when people on social media see what others are doing or possessing and feel like they don't "fit in" or are missing out on important opportunities. In the technological context, FOMO means that companies or individuals feel pressure not to miss new trends or innovations in order not to lag behind the competition or the market.
The technology industry is in a state of constant innovation, and those who have the right instinct can secure a decisive competitive advantage. Smart glasses are seen as the next big wave that has the potential to replace or at least usefully complement smartphones in certain areas of application. The idea of a competitor dominating the market while you lag behind is simply unbearable for the established players. This pressure to be at the forefront is fueling the current development and the entry of numerous companies into the market for smart glasses.
The unprecedented success of Metas Ray-Ban Smart Glasses
A major trigger for the current frenzy is the impressive success of Ray-Ban Meta Smart Glasses. The cooperation between Meta and the eyewear giant EssilorLuxottica has proven to be a real stroke of luck. It can be observed that these smart glasses have become real bestsellers in many Ray-Ban stores in Europe, the Middle East and Africa. The considerable sales have already exceeded the one million unit mark, and even higher sales figures of over two million units are forecast for the current year 2024. This success impressively demonstrates consumers' growing interest in this new technology and confirms the market's potential. One could say that the Ray-Ban Meta Smart Glasses have proven that smart glasses are no longer a distant vision of the future, but are already a relevant product category today.
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It doesn't take long for the competitors to react
The unexpectedly huge success of Meta caused a stir throughout the technology industry and alarmed numerous competitors. The fear of losing touch and missing out on a lucrative market segment is now driving other tech companies to invest more in the development and marketing of their own smart glasses. For example, the Chinese technology group Baidu has already presented AI-supported glasses that are intended to score points especially in the area of intelligent assistance systems. Amazon, known for its omnipresence in retail and its logistics division, is also said to be working on smart glasses for its delivery drivers to make their work processes more efficient. There are also persistent rumors that heavyweights such as 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 way to market readiness
Despite the undeniable hype and increasing interest, there are still significant challenges standing in the way of widespread market penetration of smart glasses. A central problem is profitability. Meta's Reality Labs Division, in which the development of smart glasses is located, is expected to record operating losses of an astronomical amount of around 60 billion dollars in the coming years. This makes it clear that the development and production of this complex technology involves immense costs and that it will take some time for these investments to pay off.
The gross margin of Ray-Ban Meta Glasses is a respectable 45 percent and even exceeds the margins of Apple's smartwatch, but the continuous reduction in the costs of essential components such as processor chips and batteries without compromising the performance and functionality of the devices is an issue represents an immense challenge.
Producing advanced AR and VR smart glasses with superior performance remains a costly endeavor. The estimated production cost for high-end models like Meta's "Orion" glasses is reportedly around $10,000 per unit. These high costs are primarily due to the use of expensive materials and complex manufacturing processes. In addition, enormous investments in research and development are necessary to continually improve the technology and integrate new, innovative functions.
Another problem is the limited battery life of many current smart glasses models. They often only offer a usage time of around two hours, which is simply not enough for most consumers' everyday use. Developing more powerful batteries that are light and compact at the same time is a challenging technical task.
There are still hurdles to overcome in terms of technical possibilities. Finding the optimal relationship between field of view and resolution is a tricky matter. In addition, the integration of advanced technologies such as micro LED displays (LEDoS) requires extremely complex design and manufacturing processes.
A crucial factor for success in the market is a vibrant application ecosystem. However, many manufacturers have not yet developed 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 broad masses of consumers of the advantages of this technology.
The intense competition between large technology companies such as Meta, Apple, Google and other providers also creates significant price pressure. Companies face the challenge of developing innovative products while 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 put additional strain on supply chains.
Consumer concerns about data protection should not be underestimated. The idea of being constantly accompanied by a camera that may be recording or collecting data is a source of skepticism for many people and could affect the adoption of smart glasses.
The high operational losses that even established companies like Meta are recording in their AR/VR departments highlight the economic challenge the industry is facing. To be successful in the long term, manufacturers must find innovative solutions to reduce costs, continually improve technology while maximizing benefits for consumers. The trick will be to create a product that is not only technologically impressive, but also offers real 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. In the future, they could play a key role in various areas, 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 completely new perspectives. It is conceivable that smart glasses will become an indispensable part of our everyday lives in the future, similar to how smartphones already are today. However, it will take some time and significant effort before this vision becomes a reality. However, the current hype and FOMO from the tech giants are a clear sign that development is well underway and we can expect exciting innovations in the field of smart glasses in the coming years.
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