As we move into 2024, the launch of Apple's Vision Pro, priced at $25,000, was anticipated to mark a significant milestone for the augmented reality (AR) industry, reminiscent of the transformative impact of the iPhone on the smartphone marketHowever, the response from consumers has been surprisingly tepidRecent figures released by the International Data Corporation (IDC) predict that the AR/VR market in China will see a reduction in shipments, projecting only 535,000 units for the entire year, which represents a decline of 26.3% compared to the previous year.

This downturn can largely be attributed to customers' evolving expectations for immersive AR experiencesThere is a palpable shift in interest towards the practicality of AI glasses, a new frontier that seems to captivate both consumers and tech companies alikeAs AI technologies mature, AI glasses demonstrate significant potential in executing everyday tasks, delivering real-time information, and enhancing decision-making processes

By the latter half of 2024, AI glasses emerged as a favored alternative, prompting major tech corporations to rethink their strategies and focus on the development of these next-generation wearable devices.

Emerging market dynamics reveal a noticeable headwind effect within the AR sectorA few key players, namely Rokid, Xreal, INMO (Shadow Vision Technology), and Thunderbird Innovation, collectively known as the "AR Four Dragons," are capturing a dominant share of the Chinese AR marketThis concentration of power suggests a shift towards the establishment of a few leading companies shaping the industry's future.

The funding landscape in 2024 has also concentrated around these same companiesFrom January to November of this year, the Chinese VR/AR sector witnessed 30 investment events, pulling in approximately 2.948 billion yuan—marking a solid increase from 2023. For instance, in January, XREAL announced a significant strategic financing deal worth $60 million, while Rokid secured nearly 500 million yuan in January and an additional 100 million in September

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Furthermore, Thunderbird Innovation successfully completed three rounds of financing totaling hundreds of millions within six months.

The general manager of Huatai Zijin, Fan Xin, commented on the advancements, spotlighting how the consumer-level AR sector has matured significantly over recent yearsWith upstream developments and AI breakthroughs, the industry now possesses a foundational capability to innovate the interactive modes of smart terminals, positioning itself to become a new driver in consumer electronicsHe noted that we are on the brink of an explosive growth phase, with vast potential for ROI.

Funding amplifies the message from the capital markets regarding the growing recognition of the AR glasses industryZhu Keli, a director at the China Information Association and founder of the National Research Institute for New Economy, emphasized that financial backing serves as a critical engine for industry growth

Increased investment enthusiasm signifies a bullish outlook on AR technology’s future applications across sectors like education, healthcare, and entertainmentHe argues that the sustained flow of investments signals confidence among stakeholders in the potential and strategic significance of AR glasses as next-gen human-computer interaction mediums.

Another fascinating trend is the sudden popularity of AI glasses, which were initially unforeseenThe year 2024 has catalyzed a shift as domestic AR manufacturers begin to differentiate into two primary trajectories—previously focusing on entertainment applications such as games and movies, companies like Thunderbird and XREAL have shifted towards integrating AI capabilitiesIn this transformative year, AI has permeated various industries, breathing new life into basic smart glasses and extending their functionalities beyond traditional uses like making calls or playing music

AI glasses are now entering a new epoch as global demand rises.

The rise of AI glasses is underscored by a plethora of new entrants to the marketIn the second half of 2024 alone, statistics show that more than ten innovative AI glasses models will hit the shelves—almost half of the new glasses launched throughout the yearAdditionally, several tech giants have announced plans to unveil new AI+AR models at the upcoming CES in early 2025, hinting at an escalating competition in the sector.

Industry observers have noted that Meta, with its progressive initiatives, is largely credited with igniting interest in AI glassesIn September 2023, Meta unveiled its second-generation collaborative product with Ray-Ban—Ray-Ban MetaIt rapidly garnered consumer acceptance, with IDC reporting impressive shipment numbers of 360,000 units in Q4 of 2023 and 100,000 units in Q1 of 2024. By April 2024, the addition of AI functionalities propelled further interest, resulting in cumulative sales surpassing 1 million units by May 2024. Market analysts view this figure as a pivotal benchmark, indicating that brands must reach this sales volume to stimulate significant advancements and superior hardware and software experiences in the broader market.

Beijing Social Sciences Academy researcher Wang Peng remarked on the burgeoning dynamics of the AI glasses market, identifying it as a rapidly ascending sector showing tremendous promise

Meta's announcements signify an accelerated commercialization process for AI glasses, which, combined with interest from other tech titans, is fanning the flames of a vibrant market.

Forecasts by Runto Technologies predict that AI functionalities within the smart glasses market will penetrate over 60% by 2025. Further, research firm Wellsenn XR projects that AI smart glasses will see rapid adoption against a backdrop of consistent growth in traditional eyewear sales, potentially reaching annual sales of 55 million units by 2029 and jumping to a whopping 1.4 billion units by 2035.

Despite the rapid expansion of the AI glasses market and the influx of manufacturers, there remains a lack of differentiated products, as many designs merely combine traditional eyewear with AI, audio headset modules, and camera functionalitiesRunto's analysis indicates that the deep integration of generative AI is pivotal to advancing the intelligent eyewear agenda; currently, fewer than 20% of products in the Chinese smart glasses market feature AI capabilities

Limitations in smart interaction still pose challenges, but future models may prioritize integrating edge AI units, allowing for proactive assistance anytime, anywhere.

The development journey of AI glasses faces obstacles, including technological hurdles, intense competition in the marketplace, and the steep educational costs for users, as noted by Zhang Bo, CEO of Shanjiji Technology.

At the recent World Internet Conference, Qihoo 360 founder Zhou Hongyi suggested that beyond smartphones, glasses could be an emerging hardware platform for deploying AI large modelsZhang argues that the data associated with traditional hardware is becoming exhausted, shackling the iterative progress of large modelsHowever, the visual and auditory perspectives afforded by intelligent glasses could regenerate new streams of data to facilitate evolving AI systems.

Li Hongwei, the founder and CEO of Thunderbird Innovation, conceived AI glasses as a potentially optimal new platform for deploying AI technology

He underscored this viewpoint from various angles—corporate, industrial, and user—bringing forth a rational basis for predicting its explosive growth.

Indeed, among the AI glasses released in 2024, numerous models have already incorporated large modelsFlash Technology has opened up integrations with numerous renowned large model providers, including companies like Wenxin Yiyan, iFlytek, ByteDance, and TencentIn November, Baidu’s Xiaodu Technology introduced the world’s first AI glasses powered by a Chinese large model, paving the way for future innovationsRokid’s AI+AR glasses have also adopted the Tongyi Qianwen large model, setting a robust precedent in the market.

However, industry analyst Gai Hong remains skeptical, arguing that both AR and AI glasses are currently testing their limits amid a deficit of impactful advancementsHe posits that the technology capabilities of most major companies are now comparable, leading to a stagnation where products fail to significantly distinguish themselves