Breaking down "The First Stock of Smart Glasses": Meta has sold 7 million pairs, why are AR glasses still stuck in place?

Ask AI · How does XREAL’s new product strategy respond to market challenges?

Over the past year, smart glasses have been arguably the hottest track in AI hardware, bar none.

Meta sold over 7 million pairs of Ray-Ban Meta last year, three times the combined sales of 2023 and 2024.

But if we shift perspective to another route, the picture looks completely different.

The same “smart glasses,” but the growth of AR glasses appears unusually stagnant.

Yesterday, XREAL disclosed its Hong Kong IPO prospectus.

Familiar with smart glasses, friends will know that regardless of revenue or sales volume, it is the absolute leader in the global AR glasses industry. By 2025, its market share will reach 27.0%, even far higher than Meta.

Over the past three years, the company’s AR glasses sales were 137k, 125k, and 133k units respectively, basically maintaining around 130k units with almost no growth.

Revenue, however, has been increasing—from 390 million to 516 million yuan—but mostly driven by higher-priced new products rather than volume expansion.

This creates an interesting contrast: on one side, AI glasses are rapidly increasing in volume; on the other, the AR glasses leader remains stagnant.

This also raises a more critical question: why has the trend of smart glasses blown toward AI glasses but not toward AR glasses?

Today, we’ll use XREAL’s IPO prospectus to discuss this business.

/ 01 /

Driving growth with new products

Over the past three years, XREAL’s revenue was 390 million, 394 million, and 516 million yuan respectively.

In terms of growth rate, it’s not very fast.

Breaking down the revenue structure, most of the company’s income comes from AR glasses and accessories, with AR glasses sales at 303 million, 308 million, and 403 million yuan respectively, essentially the core of the entire business.

According to the prospectus, XREAL’s revenue growth largely depends on new product launches.

Currently, XREAL’s AR glasses product line mainly includes three categories: the One series, Air series, and Light-Ultra-Aura product lines.

The Air series is XREAL’s entry-level product, with an average price of 1,656 yuan in 2025;

The One series can be understood as an upgraded version of the Air series, enhancing display capabilities and interaction experience, suitable for users with higher demands for picture quality, immersion, and overall experience, with an average price of 3,196 yuan in 2025;

The Light / Ultra / Aura line is more special, resembling the company’s exploration products for next-generation spatial computing, equipped with environmental perception capabilities—that is, not only displaying content but also sensing and mapping the surrounding physical environment.

In August 2022 and September 2023, the company launched Air and Air 2 products respectively. As a result, in 2023 and 2024, the Air series became the main driver of sales, selling 134k and 104k units respectively.

By late 2024 and July 2025, the company launched One and One Pro. In 2025, the One series replaced the Air series as the company’s main revenue driver.

In 2025, the One series sold 111k units, a sevenfold increase from the previous year.

Although the three lines seem clearly divided, limited market demand means products with different positioning still compete with each other.

The most typical example is the Air and One lines.

In 2025, when the One series sold 111k units, the Air series’ sales were squeezed to 17.4k units, down over 80%.

Even more interesting is the price change.

In 2025, the average price of the Air series dropped from 2,325 yuan the previous year to 1,656 yuan, a decline of over 25%. The company explained that after new products launched, older models were discounted to clear inventory.

Overall, the volume of AR glasses has not changed significantly over the past three years. From 2023 to 2025, the company’s AR glasses sales were 137k, 125k, and 133,000 units respectively.

This actually reflects a critical problem for XREAL:

Growth is highly dependent on new product launches, but with total volume not expanding, this growth is more about structural shifts within existing demand rather than the release of new demand.

The problem then arises: since the market size isn’t growing, it’s hard to make money.

Over the past three years, the company’s net losses after adjustments were 437 million, 375 million, and 250 million yuan respectively. Although losses have narrowed, they are still substantial.

Despite the higher proportion of high-ticket One series boosting gross margin from 18.8% to 35.2%, without a significant increase in overall sales volume, R&D and marketing expenses remain difficult to amortize.

In other words, relying solely on product upgrades to improve gross margin is insufficient to support short-term profitability.

/ 02 /

Stuck with AR glasses, while AI glasses surge

XREAL’s predicament isn’t entirely a company-specific issue; more so, it’s a consequence of the AR glasses track itself.

A fact often overlooked:

If we only look at AR glasses, XREAL is already the absolute leader in the global AR glasses industry.

Whether measured by revenue or sales volume, it is the undisputed number one. By 2025, its market share will reach 27.0%.

This figure even exceeds Meta’s. Note that Meta’s AR glasses market share in 2025 is only 9.4%.

But even so, XREAL’s sales hover around 130k units.

In comparison, the leader in AI glasses, Meta, sold over 7 million Ray-Ban smart glasses in 2025, three times the combined sales of 2023 and 2024, nearly 60 times XREAL’s volume.

Expanding to the entire smart glasses market, Meta’s revenue share is nearly 57%, while XREAL’s is only 2.6%.

The key issue behind this is simple: are AR glasses and AI glasses in the same track?

Many people tend to think the difference is just “whether there’s a display,” but that’s superficial. The more fundamental difference is whether they are “content platforms” or “interaction gateways.”

AR glasses are essentially “extensions of screens.”

Over the past decades, consumer electronics have revolved around one thing: screens. Phones, computers, all fundamentally about information displayed on screens that users operate.

AR glasses push this further: removing the screen from the hand and placing it directly in front of the eyes.

So, what you see is no longer a device, but a virtual screen floating in the real world. Therefore, the core of AR glasses remains: making content better presented.

AI glasses, on the other hand, take a completely different path—making information faster to acquire and process.

Simply put, AI glasses emphasize environmental understanding and task execution. For example, you say a sentence, and it understands your meaning; you look at an object, and it can recognize and interpret it; you make a request, and it can help you complete some tasks directly.

In other words, it’s more like a portable AI assistant than a new screen.

The difference in these paths is also directly reflected in product form.

AR glasses require optical display, spatial positioning, environmental sensing—an entire complex system—making them inevitably heavier and more complex.

For example, last year’s XREAL One Pro weighs about 87 grams.

AI glasses do the opposite: removing complex displays, reducing weight to around 40–50 grams, close to regular glasses.

For instance, Ray-Ban Meta weighs about 49 grams; Xiaomi’s similar products are around 40 grams. Even products with displays like Rokid or Quark opt for “light display,” keeping weight around 50 grams.

Why can they be so light? The answer is simple: sacrificing display capabilities for wearing comfort.

These products generally use binocular diffraction waveguide schemes, guiding images into the lenses via gratings, maintaining about 80% transparency, and significantly reducing optical module size.

The trade-off is that display brightness and color performance are limited, mostly used for monochrome or low-color displays.

Nevertheless, AI glasses still haven’t fully broken through. Today’s AI glasses competition values first appearance and lightness. AI, in essence, remains a “bonus feature,” not a necessity.

This is clearly reflected in sales channels. Ray-Ban smart glasses are mostly sold in eyewear stores, not electronics channels. Buyers first see them as stylish glasses, then as smart devices.

This also explains why AI glasses can scale faster initially.

/ 03 /

XREAL is still exploring

Compared to other AR glasses manufacturers directly transitioning to AI glasses, XREAL seems more interested in finding a balance between the two:

This year will be a “product big year” for XREAL. Three product lines will see key new releases:

One series: the R1 developed with ASUS ROG, focusing on gaming scenarios;

Air series: Project Helen, emphasizing lower price and lighter weight, trying to expand user base;

High-end line: Project Aura, exploring next-generation AI glasses forms;

Among these, the most critical is Project Aura. This product adopts a split architecture—glasses + puck computing unit. The glasses connect via cable to a device about the size of a phone or directly to an Android phone.

This design looks like “taking a step back”: sacrificing integration and freedom, but gaining lighter headwear and more controllable battery life.

At the same time, Aura introduces Gemini multimodal AI and runs a full Android XR system, meaning users can run Android apps directly on the glasses.

From a strategic perspective, this choice isn’t hard to understand. On one hand, it’s difficult for AI glasses to create true differentiation. Hardware barriers are low, supply chains are mature, and product forms are rapidly converging. On the other hand, if AI glasses really become the next mainstream gateway, big tech companies will likely have the advantage.

In this context, XREAL’s approach is more like a differentiated choice: not directly competing in the “entry point” race, but continuing to strengthen its capabilities in display and spatial computing.

Longer-term, the boundary between AI glasses and AR glasses is also gradually blurring. The future mainstream form may need both spatial display capabilities and environmental understanding and task execution.

In this process, XREAL’s current exploration is more about preparing for this integrated form. Whether this path can bring clearer commercial results remains to be validated by future products and market feedback.

Text / Lin Bai