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Both Apple and Xiaomi are stepping up their efforts—what exactly is this trillion-dollar business that once caused Google to stumble?

©️ DeepSound Original · Author: Chen Wenqi

This is the golden September and silver October for AR glasses.

No sooner had Facebook unveiled its smart glasses in collaboration with Ray-Ban, taking a major step toward Zuckerberg's AR future, than Xiaomi introduced a concept AR glasses product. In addition to the big players expanding their horizons, star venture firms specializing in AR/XR are also scrambling to hype their new products. Xu Chi, founder of Nreal, said in an interview with CNBC that the company is about to launch a brand-new AR glasses product, while Rokid unveiled its next-generation consumer-grade AR glasses, the Rokid Air. Under these circumstances, Google Glass can only sigh at being born at the wrong time.

After several years of decline, the XR industry has once again found itself at the forefront of innovation.

"We witnessed XR go from being initially noticed by the media and our investors—after we invested in a number of companies—to entering a winter period. Now, we're seeing a second spring," Shen Jing, Qualcomm's Global Vice President and Managing Director of Qualcomm Ventures, told DeepTech. As for the reasons, Shen Jing said: "Over the past seven to eight years, XR has made tremendous progress in user experience and cost-effectiveness."

According to the Gartner Hype Cycle, the maturation of a technology typically unfolds in several stages: the emergence of the technology or concept, which garners widespread attention and high expectations; a subsequent peak followed by a downturn as the hype bubble deflates; gradual maturation and steady progress; and finally, the point at which the technology's value and potential are fully recognized and realized on a broader scale. "The second phase is generally characterized by more realistic development—truly cultivating users and generating revenue," says Shen Jing, who believes that XR technology has now entered a phase of steady growth after weathering its trough.

Thanks to technological and product advancements, bolstered by the metaverse hype and the theatrical release of the film "Free Guy," multiple factors have converged to propel XR out of its long-standing obscurity.

Gartner's Hype Cycle

The concept of XR is highly multifaceted, encompassing VR (Virtual Reality), AR (Augmented Reality), and MR (Mixed Reality). While these three technologies share many commonalities, they exhibit a progressive relationship in terms of implementation complexity. Overall, XR technology aims to evolve the digital network from a two-dimensional plane into a three-dimensional space, enabling seamless integration and interaction between the digital (bit) world and the physical (atom) world. As a key end-device, AR glasses offer one viable solution to this vision.

Unlike the immersive experience delivered by VR headsets, which are already well known to most people, the ideal AR glasses aim to overlay virtual three-dimensional imagery onto the real world—much like the smart glasses in "Free Guy." This, however, poses far greater challenges for network infrastructure, display technology, and interaction design. Today, AR glasses have moved beyond the stage of basic education; both consumers and enterprise users now have a solid understanding of this category. Yet no truly "game-changing" product has emerged on the market, and AR hardware is still a long way from achieving mainstream adoption. So just how far off is that future, exactly?

In the film "Free Guy," the male lead, Guy, enters the world of an online game as soon as he puts on his sunglasses.

Big Companies Compete for Ship Tickets

Technological progress is a long, ongoing process of continually moving closer to what was once imagined.

As early as the 1860s, Ivan Sutherland, often referred to as the "father of computer graphics," proposed the vision that a computer display is "a window into a virtual world." In the ultimate form of such a display, the computer would be able to control every object in a room, making the chairs depicted within appear so real that one could actually sit on them. In 1968, Sutherland and his students built an actual device that allowed users to see a virtual cube superimposed onto the real world, with the virtual object dynamically tracking the user's movements. This pioneering apparatus was extremely heavy and had to be suspended overhead by mechanical means; it was dubbed the "Sword of Damocles" and represents the earliest conceptual prototype of today's VR headsets and AR glasses.

The "Sword of Damocles" hanging over the current wave of VR/AR headset prototypes

In 2012, the launch of Google Glass (Google Project Glass) brought AR smart glasses one step closer to practical implementation.

Back when concepts like VR and AR were not yet widely known, this device embodied Google's unwavering obsession with wearable technology. Its form factor combined eyeglasses or a frame, a front-facing camera, a processor on the right side, and a touchpad. The use cases showcased in the concept videos back then still feel thrilling today: the glasses could handle navigation, photography, messaging, phone calls, video calls, and more; voice control was smooth and seamless, and the display was clear and minimalist. A private video posted by Google on its YouTube channel—accessible via a link—has now amassed over 20 million views.

However, the more beautiful the concept video, the greater the disillusionment in reality.

In real-world use, Google Glass delivers less-than-ideal display performance: the field of view is narrow, battery life is short, overheating is severe, the app ecosystem is underdeveloped, and certain features still require integration with a smartphone. Moreover, its photo and video capture capabilities—often used to highlight key moments—have faced public resistance due to privacy concerns, plunging the product into a storm of negative publicity. On top of that, as a consumer-facing device, its $1,500 price tag has proven prohibitive, relegating it to a niche gadget for tech enthusiasts and geeks.

In 2015, Google announced the discontinuation of this type of smart glasses.

In a Google Glass promotional video, video calls via the glasses are made possible. Source: Official Google video.

In fact, Google Glass is not truly an AR headset; it is essentially a combination of a miniature projector, camera, sensors, and control hardware, with the concept more akin to shrinking a smartphone screen and placing it right in front of your eyes.

Tech giants are eager not to be left behind by anything that could represent the "future," and are scrambling to secure a seat on this bandwagon.

Microsoft's HoloLens is a pioneering AR headset and arguably represents the current industry's highest standard. The first-generation HoloLens was launched in the year Google Glass was discontinued. Weighing in at 600 grams, it feels more like a helmet than a pair of glasses.

Microsoft's approach diverges sharply from Google's. While Google aims to equip smart glasses with some of the core functions of a smartphone, HoloLens seeks to deliver far more. HoloLens runs Windows Holographic, a brand-new operating system built from the ground up on Windows 10, which can project images into mid-air and onto surrounding objects, all controllable via gestures and voice commands. In terms of its optical display technology, unlike Google Glass's prism-reflection approach, HoloLens employs holographic waveguide technology, enabling thinner, smaller optical lenses with more accurate color reproduction—though this also comes with greater manufacturing complexity and higher costs.

Moreover, the HoloLens is priced at $3,000 and was initially launched exclusively for developers before gradually expanding into the enterprise market; there are currently no plans to make it available to consumers in the near future. In 2019, the HoloLens 2 was introduced, featuring a lighter weight, a wider field of view, higher display resolution, support for two-handed gesture control, and the addition of eye-tracking technology compared with its predecessor.

HoloLens is aimed at developers and enterprise users; for example, in medical settings it can assist with surgery. Source: Official Microsoft video.

Social media giants are also engaged in an XR technology arms race, as new devices and interaction paradigms will transform how people socialize—and they must get ready well in advance. Facebook has already been beaten to the punch by Snap.

In May of this year, Snap unveiled the latest version of Spectacles—the company's first true AR glasses. Prior to this, since 2016, Snap had released three iterations of Spectacles. However, rather than being truly smart glasses, the earlier models were more akin to a first-person camera tightly integrated with Snapchat, essentially capturing whatever the user saw. Due to functional limitations and relatively simple hardware, Snap's glasses could be designed to look stylish and cool—much like ordinary sunglasses. These earlier "half-baked" products failed to generate strong market traction; according to Business Insider, the initial smart-glasses lineup cost Snap $40 million in losses, with most buyers abandoning them after less than a month of use.

However, continuous iteration has laid the foundation for these AR glasses. The new developer-oriented version of Spectacles enables users to design experiences on Snap's Lens Studio platform and project those virtual visuals into the physical world.

Display effects achievable with Snap Spectacles. Image source: Snap official.

In contrast, although Facebook has achieved great success with its VR headset Oculus Quest 2 and CEO Zuckerberg is a staunch supporter of XR, its progress in AR glasses has been slower. The new Stories product developed in collaboration with Ray-Ban is basically the same as the smart glasses previously launched by Huawei in collaboration with Gentle Monster, with little to do with AR; it is more of a trendy fashion item designed to boost one's social media presence.

Another wave of players entering the AR glasses market is represented by today's dominant smartphone manufacturers.

AR is saddled with the lofty expectation of "disrupting the smartphone industry," and no one wants to be left behind—lest they end up as the Motorola of the new era. Leading smartphone brands, boasting strong advantages in supply chains, hardware and software, and brand equity, have already secured their positions in this emerging space.

Both vivo and OPPO unveiled their first AR glasses concept devices in 2019. Xiaomi, which enjoys a large user base, also released a monochrome (green) information display device—resembling AR glasses—earlier this month, just before Apple's fall product launch event. This device can display simple information such as messages and maps. Its highlight is the use of advanced optical waveguide technology and a MicroLED screen, allowing the glasses to closely resemble ordinary eyeglasses in weight and form. However, none of these products have entered mass production.

Xiaomi Smart Glasses Concept Product Interface

Although Apple has not yet officially released any eyewear accessories, there have always been rumors about them in the industry.

Industry insiders and consumers have several reasons for placing their hopes on Apple:

On the one hand, Apple has made considerable efforts in accumulating XR technology. Since 2006, it has been applying for VR/AR patents, recruiting talents, and acquiring companies. Consumers have also seen several AR applications on the iPhone, such as a rangefinder.

On the other hand, foreign media and supply chain sources keep reporting that Apple is stepping up its efforts in VR and AR hardware.

People's expectations also stem from their belief in Apple's brand appeal, its ability to engage developers, and its strength in supply chain integration. Apple's past product release patterns further demonstrate that this company, the world's most valuable, tends to launch mature products in new categories rather than adopting a "small-step, fast-paced" approach.

Established tech firms, social-media giants, and smartphone manufacturers are all entering the AR-glasses market, each with its own agenda and varying paces and application strategies. In this journey toward realizing our visions of the future, truly groundbreaking products rarely emerge overnight; it remains to be seen which company will secure the ticket to this "future."

Sweet Trap

The army of entrepreneurs is also a formidable force.

New technologies, products, or business models often mark a window of opportunity for industry reshuffling. Both domestically and internationally, there are numerous prominent AR glasses brands, including the veteran publicly listed company Vuzix, which has been rooted in this field for decades, as well as Magic Leap, which once caused a sensation in the industry. Domestically, brands such as Nreal, Rokid, Liangfengtai, and 0 Glasses have all released multiple generations of AR glasses products. As the XR industry's popularity surges once again, capital is pouring in, accelerating industry development.

While giants with 'cash power' are seeking new growth areas, the common challenge for ventures is 'survival.'

It is easy to imagine the difficulty of integrating multiple cutting-edge technologies into a small AR glasses device. Apple's AR glasses have been repeatedly delayed (according to analysts' forecasts), with enormous R&D investment. Moreover, AR glasses are still far from popularization, making it difficult to scale up production. All these factors weaken the self-sustaining capability of start-up AR glasses companies, making them more vulnerable than industry giants under such pressure.

Capital once held high hopes for startups in the XR industry. Magic Leap was founded in 2011 and secured frequent rounds of funding during the early stages when VR/AR technology was attracting widespread attention. Google and Alibaba were both major investors, and before the company even launched a formal product, it had raised as much as US$2 billion, quickly becoming a unicorn. In 2016, Magic Leap released the highly controversial 'Whale Leaps' video to showcase its technology. However, at the end of the year, tech media outlet The Information exposed the truth: the video was created using special effects, and the actual product fell far short of that level.

As the industry entered a 'capital winter,' Magic Leap continued to face a series of setbacks in 2019: difficulties in raising capital, mounting inventory backlogs, patent licensing deals, executive departures, and large-scale layoffs. In response, the company embarked on a strategic transformation, shifting its focus to enterprise-grade products and temporarily abandoning the consumer market.

Magic Leap has run into trouble, casting doubt on the VR/AR industry—could this be another bubble?

Magic Leap's concept demo video was stunning, but it was later revealed to be the work of a visual-effects team.

It is now an industry consensus that AR will first be deployed in the B2B sector.

"Having a clear strategic direction for our business is something we in the industry simply must do," Hong Yanfei, Marketing Director at Liangfengtai, an enterprise-grade AR platform company, told DeepTech in an interview. "Whether it's us, our customers, or the investors behind us, we all need to pinpoint where the true value of AR technology lies. It's no longer the case that slapping a VR/AR label on a product will automatically attract a flood of hot money—as was the trend in the previous wave. Now everyone has cooled down and is able to approach this issue more rationally."

She said that in 2015, when Liangfengtai first unveiled its AR glasses, there was widespread excitement—but clarity on use cases and the roadmap for the next iteration was still lacking. "The conversation at the time was largely about popularizing the industry concept." By 2016, AR applications integrated with internet apps were all the rage, and Alipay's "Collect the Five Blessings" campaign made its debut. "Although we collaborated with many major tech companies and well-known brands on AR initiatives, we often felt a sense of urgency: this kind of application window wouldn't last long." Amid the industry's ebbs and flows, Liangfengtai gradually honed its own path—focusing on vertical industry scenarios such as manufacturing, healthcare, and security—and delivering tailored products and technical solutions.

Liangfengtai's newly launched HiAR H100 glasses for industrial applications, released in September.

In the B2B space, customers face pressing pain points that need to be addressed, and the successful deployment of our products helps establish standardized applications. Moreover, customer feedback provides valuable guidance for subsequent iterations. Although the customer-facing model means that no product can be a 100% one-size-fits-all solution, at this stage it nonetheless demonstrates the practical value of AR technology.

The Google Glass project was never officially discontinued; after its consumer-facing (ToC) efforts faltered, the company quickly pivoted to focus on enterprise partnerships. Microsoft HoloLens, meanwhile, has concentrated its efforts on the manufacturing, healthcare, and education sectors.

Want AR glasses just like in promotional videos and movies? Sorry—those are still firmly in the realm of imagination.

According to the Snap CEO, it will take another 10 years for consumer AR glasses to go mainstream. If you have high confidence in Apple, then according to current predictions, they will debut in 2023. "We tend to overestimate the changes brought by new technologies over the next two or three years, while overlooking the outcomes of changes over a decade. Perhaps if we take a longer-term view, we can see that every step in this process is meaningful. With a bit more patience, we may discover even more," said Hong Yanfei.

There are still numerous hurdles to overcome before a mature consumer-grade product can be brought to market—optical display solutions, battery technology, computing power, computer vision, interaction paradigms, hardware engineering, and the content ecosystem, to name just a few. This is not a challenge that any single company can tackle on its own; it requires progress across the entire industry.

Over the past decade or so, from Google's launch of the first-generation smart glasses and Microsoft's hardcore HoloLens to numerous venture companies rolling out new products; from mediocre, useless features to AR applications familiar to consumers and temperature-measuring glasses during the pandemic. XR technology has gradually integrated into our lives and work, albeit in a somewhat disillusioning process. Nevertheless, this does not necessarily diminish the excitement it brings.

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