Over the last fifty years, mobile phones have evolved from circuit-laden bricks to pocket-sized computers with sleek touchscreens readily navigated by kindergarteners. Yet the future—approaching at breakneck speed—may be far less about what you put to your ear, and far more about what you wear around your eyes.
Powered by artificial intelligence (AI), so-called “smart glasses” can now do all the things a smart phone can do, including play music, receive calls, take photos, record videos and interact with AI agents.
For a peek through this looking glass, see the landmark new collaboration between OpenAI’s Sam Altman and Sir Jonathan Ive, the visionary designer behind Apple’s iPhone and iPod. In May, OpenAI announced that it will acquire Ive’s device startup for nearly $6.5 billon in an all-stock deal.1 The duo says they plan to develop a revolutionary family of devices, powered by OpenAI’s advanced models, that will seamlessly integrate AI into everyday life. Eddy Cue, an Apple SVP, has even suggested that smart glasses, driven by advanced AI and augmented-reality (AR) technology, could replace smartphones entirely within 10 years.2
This potentially transformative technological shift is already taking shape, as technology heavyweights race to redefine the next frontier of personal devices. Sales of Meta’s Ray-Ban Meta AI Glasses—developed in collaboration with EssilorLuxottica and powered by Meta’s own state-of-the-art AI large language model—have topped 2 million units since their 2023 debut, and are projected to hit 10 million units (annually) by 2026.3
Smart glasses avoid the comparably clunky experience of typing into a search bar on a laptop or mobile phone. Imagine saying, “Hey Meta!” and then effortlessly capturing a photo (or recording a video) and sharing it on WhatsApp—all via voice command.
The early success of Meta’s Ray-Ban glasses has sparked a race among tech giants and startups alike to push the boundaries of what these devices can do. Companies like Huawei, Xiaomi, Apple and Google are all entering the arena: Huawei recently introduced an upgraded version of its AI glasses featuring a sleek titanium frame and enhanced capabilities;4 Xiaomi followed suit with its second-generation smart glasses, boasting long-lasting battery life for all-day use;5 and Apple is reportedly developing a specialized chip for its first smart glasses.6 Innovating yet a step further, Google unveiled its lightweight, Gemini AI-powered XR glasses in April,7 while Meta is also expected to release its own AI-plus-AR glasses later this year.8
Third-generation smart glasses are already on the horizon, featuring sharper displays, extended battery life and more powerful processing—critical enhancements that, in our view, will continue to push this technology closer to mainstream adoption, and a world closer to the one foreshadowed by the 2002 Tom Cruise blockbuster Minority Report. Imagine following a recipe projected onto your glasses; or navigating a new city with real-time directions overlaid onto the streets ahead; or discovering nearby restaurants or hotels through immersive AR visuals.
How large might the smart-glasses market get? By one estimate, shipments are expected to grow 96% per year, reaching 35 million in 2028.9 Meanwhile, roughly 93% of people in the U.S. wear some form of eyewear.10
As brick phones begat sleek touchscreens, we believe smart glasses may soon herald a more hands-free, heads-up way of life—and reveal a new world of potential opportunities for growth investors.
