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As we approach a new year, it’s time for our annual ritual of synthesizing the lessons from the past twelve months and formulating the outlook for the next twelve. 2023 was an incremental year for AR & VR, which both continue to gradually trudge uphill toward mainstream traction.
Highlights this year include the beginnings of XR’s convergence with AI, Apple Vision Pro’s unveiling, and some ups and downs for VR. 2023 was also defined by the rise of passthrough AR that’s incubated within VR a la Quest 3, as well as some smart glasses milestones.
These ends of the spectrum – passthrough AR and lightweight smart glasses – represent two paths towards AR’s holy grail. The former will get there through graphically rich UX in bulky form factors that slim down over time; while the latter gains UX richness to accompany its wearability.
Until then, what does spatial computing’s near-term look like? Aligned with the more extensive predictions of our research arm, ARtillery Intelligence, we’ve devised 5 AR Insider predictions. We’ll break them down weekly, continuing here with prediction 2: A Smart Glasses Turning Point.
Prediction 1: AR and AI Get Hitched
Prediction 2: A Smart Glasses Turning Point
Prediction 3: New APIs & SDKs Elevate XR
Prediction 4: Mixed Reality, The New VR Standard
Prediction 5: Apple Vision Pro is Propelled by Wearables
Experiential Spectrum
We’re nearing a turning point in smart glasses. By smart glasses, we mean stylistically-viable eyewear with smart functions. These can include visual display systems… but don’t always. For example, Ray Ban Meta Smartglasses’ value lies more in information than optics.
Speaking of Meta’s latest play, we’ll cite two examples that span the experiential spectrum: Ray Ban Meta Smartglasses and Xreal Air 2. Both were launched in Q4, representing considerable upgrades from their previous generations and signals for what could come next.
Taking these devices one at a time, Meta’s smart glasses’ improvements include sound quality in its speakers and mics. The latter includes a five-speaker array, enabling spatial audio for calls or live streaming. Speaking of livestreaming, that’s the device’s focused use case.
This was smart to accommodate such a prevalent and influential behavior. It will expand the addressable market by endowing these glasses with a meaningful raison d’être for a large segment of users. It’s also a use case that carries a high degree of exposure and virality.
Live streaming also brings up another factor: timing. Backing up, camera glasses often evoke Google Glass’ famous fails. But cultural resistance to recording has deteriorated in the age of everyone filming everything. Could the market finally be ready for mainstream camera glasses?
Boiling it down, Ray Ban Meta Smartglasses’ timing, product quality, and focused use case could spark a demand inflection that opens up a wider audience. Moreover, Meta will launch a software update in 2024 that expands the market further with AI-fueled object identification.
X Factor
Moving on to Xreal Air 2, it likewise represents a focused use case that has broad appeal: private media & gaming on large virtual displays. According to our AR and VR consumer surveys, this is a use case that most consumers are interested in, versus fully-immersive 6DoF.
That last part is always surprising and ironic, but sort of makes sense if you think about it. Consumers are most interested in what they’re familiar with. And most consumers (read: biggest possible market), just want better versions of their large-screen gaming and entertainment.
Meanwhile, another looming X factor could accelerate demand: Apple Vision Pro. Watching 2D entertainment in immersive 3D private environments is one of its central features… for all the above reasons. Could its classic halo approach stimulate mass interest in this use case?
If so, the outcome could be good for Xreal 2 and others in this device class. Indeed, Xreal 2 has nailed the design and UX, and has done so at a friendly price point. In other words, Apple could amplify demand for this use case, while Xreal absorbs some of it with a more affordable flavor.
Altogether, these moves, and others to come in 2024, will inflect smart glasses demand and bring them one step closer to mainstream penetration. To be clear, that mainstream endpoint won’t come in 2024 but the path towards it will be accelerated and meaningful steps will be taken.
We’ll pause there and circle back next week with another 2024 prediction. Meanwhile, see more color in our full report on 2023 lessons and 2024 outlook.
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