The AI Smart Glasses Boom and Must-Watch Stocks

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AI-Powered Smart Glasses Industry

AI-Powered Smart Glasses: The Next Computing Platform Revolution

Date: December 12, 2024

1. AI smart glasses combine artificial intelligence with wearable technology to provide augmented vision, real-time information processing, and hands-free computing in an eyewear form factor.

2. In September 2021, Meta and Ray-Ban launched their first-generation smart glasses 'Ray-Ban Stories'. Due to technological limitations, sales reached only 300,000 units by February 2023. The device's monthly active users stood at 27,000, less than 10% of total units sold.

3. In September 2023, the second-generation 'Ray-Ban Meta' smart glasses launched at $299, featuring significant upgrades in camera, speakers, microphones, battery life, processors, and AI model integration. Total sales reached 1 million units by mid-2024.

4. Starting 2025, the AI smart glasses market saw a surge in product launches: With Apple, Samsung, and Huawei expected to enter the market, the industry entered an era of intense competition. The battlefield includes smartphone manufacturers, consumer electronics brands, traditional eyewear companies, and AI model providers.

Source: Meta Official Website

Key Points

1. AI smart glasses are currently in a technological explosion phase, similar to the coexistence of smartphones and feature phones around 2010. With technological breakthroughs, AI integration, improved user experience, and declining costs, the future market potential for AI glasses is enormous.

2. Smart glasses may be the ideal terminal device for AI implementation. Unlike phones and earphones, glasses are typically worn throughout the day. Moreover, their proximity to the eyes, mouth, and ears enables higher AI precision.

3. The eyewear market is substantial, with global sales reaching approximately 1.5 billion units in 2023 and a market value exceeding $180 billion. As AI glasses gradually replace traditional prescription and sunglasses, coupled with higher unit prices, the market is expected to maintain strong growth over the next decade.

4. Key areas to monitor include major product launches, sales volumes, and the impact of AI glasses on participating companies' financial performance.

5. Key stocks to watch: Meta Platforms(META.US) (Leading AI glasses manufacturer)、 QUALCOMM Incorporated(QCOM.US) (Qualcomm - chip supplier for Meta)、 ESSILORLUXOTTICA(ESLOY.US) (EssilorLuxottica - eyewear industry leader)、 Apple Inc.(AAPL.US) 、 Vuzix Corporation(VUZI.US) (Vuzix - smart glasses specialist).

Market Size Analysis

According to Wellsenn XR data, global eyewear sales reached approximately 1.56 billion units in 2023, with a market value exceeding $180 billion. We expect AI glasses to begin replacing traditional eyewear starting with high-end, fashion-oriented sunglasses, gradually expanding into prescription eyewear as technology matures. The projected compound annual growth rate (CAGR) over the next five years is expected to exceed 100%.

Smart Glasses Product Analysis

1. Analyzing Ray-Ban Meta's features, current AI glasses offer live streaming, photography, audio recording, and AI interaction capabilities. We believe these features present strong consumer appeal, combining traditional eyewear functionality with headphone and partial smartphone capabilities, while offering enhanced convenience and a more comprehensive ecosystem.

2. With AI advancement, we anticipate AI glasses to evolve into more powerful personal AI assistants. Users will be able to use voice commands for tasks like navigation routing from current location, music playback, and restaurant reservations. The all-day wearability feature will significantly enhance user engagement and retention.

3. 2025 could be a pivotal year for AI glasses market explosion, with multiple manufacturers launching new products. We recommend closely monitoring new product releases and sales data. If performance exceeds expectations, this sector could become a primary investment theme in the capital markets.

Key Stocks to Monitor

Meta: Meta is the pioneer and market leader in AI eyewear, having successfully commercialized smart glasses through collaboration with Ray-Ban, backed by its strong AI capabilities and comprehensive ecosystem for continuous innovation. As an investment target, Meta holds first-mover advantage and technological barriers in the AI glasses market, complemented by substantial cash reserves and ongoing R&D investment, positioning it with significant competitive advantages in this rapidly growing market.

QCOM: According to Wellsenn XR data, Qualcomm provides SOC, WiFi, and other chips for Ray-Ban Meta, accounting for over 35% of total component costs, making it a key investment target in the AI eyewear supply chain. As a leading semiconductor company with dominant positions in mobile, AI, and XR chips, Qualcomm is well-positioned to benefit from the growing AI glasses market.

ESLOY: EssilorLuxottica is the world's largest eyewear manufacturing and retail company, owning renowned brands such as Ray-Ban, Oakley, and Persol, while also holding eyewear manufacturing licenses for luxury brands including Chanel and Prada. According to Wellsenn XR data, the company currently manufactures lenses and frames for Ray-Ban Meta, accounting for approximately 18% of the total cost, and Meta plans to acquire a 5% stake in the company, indicating strategic intent for deeper cooperation. In the emerging wave of AI eyewear, EssilorLuxottica is well-positioned to be a core beneficiary of this new market, leveraging its powerful manufacturing capabilities, strict quality control systems, and global sales network, while its established brand strength and distribution advantages in the traditional eyewear industry continue to play crucial roles.

VUZI: VUZIX is a specialized smart glasses manufacturer that has been focusing on enterprise and professional AR solutions since 2013, recently expanding into the consumer AI glasses market. The company stands out for its proprietary optical waveguide technology and comprehensive AR/AI solutions.

Research Report Appendix

Company Concept:

Meta is the pioneer and market leader in AI eyewear, having successfully commercialized smart glasses through collaboration with Ray-Ban, backed by its strong AI capabilities and comprehensive ecosystem for continuous innovation. As an investment target, Meta holds first-mover advantage and technological barriers in the AI glasses market, complemented by substantial cash reserves and ongoing R&D investment, positioning it with significant competitive advantages in this rapidly growing market.

Model Explanation:

The model primarily evaluates companies and industries across five dimensions: growth ability, valuation attractiveness, stability, risk resistance ability, and theme strength. Each dimension is scored from 1-5, with 1 being the lowest and 5 the highest. Overall, higher scores indicate stronger fundamentals. For each dimension, a multi-factor model will be constructed based on industry and historical data of selected stocks, and a quantitative model will be used to automatically score each dimension.

Here are the dimensions explained:

Growth Ability: Measures future performance potential; higher growth rates yield higher scores.
Valuation Attractiveness: Assesses stock valuation; lower valuations earn higher scores.
Stability: Evaluates the consistency of profit generation; greater stability means higher scores.
Risk Resistance: Gauges the capacity to endure macroeconomic changes; better risk resistance leads to higher scores.
Theme Strength: Rates market favor for the stock in the short term; increased favor results in higher scores....