Big Tech’s Next AI Battleground Is Your Face, Loop Capital Says

Smartglasses are set to be the “next major computing platform,” according to Loop Capital analysts, as Meta currently leads the space, with Google, Samsung, Apple, and SNAP preparing their own AI-powered eyewear.

Loop Capital analyst Rob Sanderson wrote in a note on Sunday that an “inflection point” has arrived for smart glasses, which are “transitioning from wearable camera accessories to what is becoming a primary hardware interface for conversational AI.”

Sanderson and analyst Anthony Chukumba spoke with wearable-tech executive Jon Li about the smart glasses industry and where it’s headed into the new year.

Li shared our view that Meta dominates the smart glasses industry with its Ray-Ban Meta smart glasses, while Google is building an ecosystem around Android XR and Snap holds an advantage in more advanced augmented reality. He said Apple could remain on the sidelines until 2028 or 2029 before introducing its own smart glasses.

Here are the key points from the conversation between Loop Capital analysts and Li:

Jon Li is a seasoned technology executive with extensive product management, user experience design, and business development experience. Mr. Li is currently Managing Partner of strategic consultancy Asentio where he advises companies on product strategy, commercialization, and human-AI collaboration. He previously served as US General Manager for XREAL, where he was instrumental in driving the company’s expansion into the US market through the development of strategic and retail distribution partnerships. Earlier in his career he held senior product and program management positions with Indigo Technologies, SERES EV, and YouSpace and senior design positions with Motorola, Philips, and FLIR Systems.

Bullish on Android XR broadly… Mr. Li is bullish on the Android XR smartglasses operating system (OS), which Google has developed in partnership with Samsung and Qualcomm. He noted Android XR leverages Google’s existing Android OS, large developer base, and mature developer framework and tools. In addition, Mr. Li views Android XR as a “true digital assistant” with the ability to utilize users’ calendars, tasks, documents, location, etc. to provide contextual assistance in real time. He noted one significant difference between Android OS and Android XR is Google plans to more tightly control distribution of the latter by working with a limited number of partners (e.g., Samsung, XREAL). Mr. Li expects Android XR and Gemini AI features to be updated every few months, while hardware changes would occur at most once a year.

…and Warby Parker’s Intelligent Eyewear more specifically. Mr. Li is also fairly upbeat about Warby Parker’s forthcoming Intelligent Eyewear launch, which he views as a key component of mass market smartglasses adoption. Mr. Li believes Warby Parker is a compelling Android XR partner given the optical retailers’ history of transforming the eyeglass purchase process (i.e., online and in store) as well as ability to educate first-time buyers and provide initial fittings and post-purchase support. All that said, Mr. Li questioned the strength of Warby Parker’s post-purchase customer relationships given the fact Google, not Warby Parker, controls the digital assistant consumers will be interfacing with.

Views Snap as having a multi-year lead on full AR. While previous versions were not released for commercial distribution, Snap’s recently introduced SPECS are the company’s 5th generation hardware design. Mr. Li believes Snap’s long-term focus and extensive experience with augmented reality on smartphones gives it a multi-year lead over competitors and expects the cadence of multiple iterations will shrink and cost-reduce its offering. Mr. Li sees enterprise suitability and highlights the base of customers in industrial production, manufacturing, healthcare and other verticals left stranded by Microsoft’s discontinued HoloLens platform as an area of obvious interest. Mr. Li believes it will ultimately be the developer community and partner ecosystem that drives category adoption and sees Snap’s ~450K developers using Lens Studio as a meaningful advantage.

Apple launch probably later than sooner, will lift overall market. Mr. Li believes Apple is unlikely to enter the smartglasses market until 2028/2029 given the company’s long history of learning from competitors’ earlier products to introduce a superior version later (e.g., iPod, iPhone, AirPods). Mr. Li believes Apple will initially introduce a premium, higher priced product (i.e., ~$800 as compared to $499 for the top-of-the-line Ray-Ban Meta Wayfarer Optics) and focus on user experience as opposed to hardware specifications; ultimately, he thinks Apple’s success will hinge on the strength of the AI assistant and level of integration with the broader iOS ecosystem, stating Siri AI is not yet where it needs to be. Mr. Li thinks an Apple entry will be a net positive for existing industry players by drawing more attention to and legitimizing smartglasses, pointing to the impact the company’s recent introduction of the iPhone Duo is having on foldable smartphones. 

Beyond Loop Capital and their insights into the smart glasses industry via an insider, Luca Solca, Bernstein’s senior equity analyst and global luxury-goods sector head, covering companies including EssilorLuxottica, LVMH, Hermès and Richemont, and recently pointed out emerging backlash in the public domain of these glasses, with some trends on social media going viral, such as “pervert glasses,” and such. 

We suspect Meta, Snap, Google, and other players will eventually need to confront the “pervert glasses” narrative with a counter narrative of their own. Good luck solving that with a marketing campaign.