The tech industry has its sights set on extended reality. Though consumers aren’t necessarily begging for head-worn computers yet, tech firms big and small see the technology as the next frontier of computing – so long as they can surpass significant engineering barriers.
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Tech companies are increasingly determined to put a computer on your face.
Alongside AI, chips, quantum computing or whatever else, Big Tech and startups alike are racing to create smart glasses people want to wear. While Meta currently holds the leading spot, Google, Samsung, Snap, Apple, and more have all placed bets in this market.
The competition is about more than Big Tech egos and fashion. Experts told The Daily Upside that extended reality may represent the future of computing itself – if these firms can nail the engineering, cost, and adoption hurdles the tech currently faces.
“The stakeholders in these companies that are making these decisions have come to believe that XR is effectively the next step in computing,” said Ben Lang, founder of extended reality trade publication Road to VR. “For any big company like this, if they don’t look ahead at what’s next, they won’t remain leaders.”
Everyday Reality
Extended reality tech encompasses a few different niches, the biggest of which at this point is gaming, said DJ Smith, co-founder and chief creative officer at The Glimpse Group. And as it stands, Meta and Sony largely have that locked up with their VR offerings. Snap, meanwhile, has targeted the social media and creator vertical, and Apple the productivity space.
But while these companies have “created a community” within their respective niches, Smith said, many are looking to create a device that’s used more than just a few hours a day. Unlocking real, long-lasting augmented reality could be the key to seeing an actual return on investment, said Lang.
“They’ve seen an evolution of computing where computers were once on our desks, and then they were in our pockets and in our hands,” said Lang. “And going forward, they think it’ll be largely something that’s worn, something that’s with us more intimately than ever.”
It’s a goal that Meta has clearly set its sights on: While its smart glasses partnership with Ray-Ban maker Elissor-Luxottica is gaining traction (and getting users used to wearing Meta devices all day), its most recent milestone was the debut of Project Orion, which the company called its “first true augmented reality glasses.” These glasses feature a 70-degree field of view and a wristband to track movement.
CEO Mark Zuckerberg told the Financial Times this month that 2025 would be a “defining year” for the company’s smart glasses.
And its place in the market has certainly come at a cost: As of its latest earnings report, the company’s Reality Labs unit logged yet another operating loss – this time of $5 billion, countered with $1.1 billion in sales – bringing the unit’s total losses up to more than $60 billion since 2020. The FT reported that the company’s investment in Reality Labs is set to surpass $100 billion this year.
“Meta was such a big company and had so much money to throw around … that they kind of bought their way to being the leader,” said Lang.
Though Meta hasn’t been quiet (or stingy) in its pursuit to achieve its goal, it’s not the only one with eyes on this market. “The phone makers realize that two-dimensional content on a three-and-a-half-inch screen is going to eventually be superseded by mixed-reality glasses,” said Smith.
Apple entered the game in mid-2023 with its launch of the Vision Pro, popularizing the term “spatial computing” alongside it, though the $3,500 device struggled to hit its stride and was eventually scaled back. The company has also reportedly scrapped its plans for AR glasses that connect to Macs, according to Bloomberg’s Mark Gurman.
Google and Samsung, meanwhile, are partnering up to build AR glasses – though little is known about specifics of the device or its timeline. Google, of course, has faced its own struggles in this market (*cough cough* Google Glass *cough cough*)
A few startups have also made a name for themselves, including some that made a splash at CES last month, like XReal, Even Realities and Halliday. But without the sheer capital that tech giants have, scaling isn’t going to be easy, Smith said.
“I’m not very optimistic that those small, niche startups are really going to be able to beat the bigger guys in terms of the R&D required, and all of the challenges with being a hardware company,” said Smith.
Useful or ‘Novelty’
A lot stands in the way of making augmented reality glasses that actually work. From an engineering perspective, the size of the components need to get smaller for the glasses to actually be wearable, said Smith. But the smaller these devices get, the trickier it is to make them function properly.
With a smaller, sleeker set of glasses, a long-lasting battery and solid processing power can be difficult to achieve, Smith said, making it difficult to perform things like gaze- or hand-tracking without sucking up excess power.
Heat dissipation, or the device’s ability to remove excess heat, is another “huge engineering challenge” as the headsets get smaller, he said. “The real limitation is the size of the components that need to go into it,” said Smith.
Form factor also has an impact on usefulness, said Lang. There’s currently a “huge tension between the size of the device and the field of view,” meaning as the glasses get smaller, what you can see out of them shrinks.
Plenty of devices have “a tiny little display in front of you that just stops being useful when you look a couple degrees to the left,” said Lang. “That’s why people are not seeing the rate of acceleration for these devices becoming compact faster.”
Beyond the engineering challenges, another barrier is the cost itself. For example, Meta’s Project Orion glasses reportedly cost $10,000 per unit to build. Getting that down to a price that consumers are willing to pay is vital in scaling such devices.
Then there’s the issue of attracting customers. As it stands, the AR market is still nascent, said Brian Jackson, principal research director at Info-Tech Research Group. As opposed to augmented reality, virtual reality tech has been around for years. And while these devices have gotten significantly cheaper, it’s still difficult to make it “sticky,” said Jackson. “Everything that you try sort of feels like a novelty.”
Smartphone Advantage
Despite the challenges that lie in their way, tech firms are still intent on making it work.
While Meta currently holds the lead, a few of its competitors have one significant advantage, said Smith: They’re already in everyone’s pockets.
Google and Apple, while currently struggling to make the engineering headway that Meta has, both have their own smartphone ecosystems that are already familiar to billions of people combined. “You will still be required to have a phone with you, and you’ll only use the glasses at certain moments in time,” said Smith.
While some firms may be interested in making AR glasses that can stand on their own, the first step will likely be making them part of a larger device ecosystem – an area in which iPhone and Android makers already have a head start.
Apple’s track record with selling consumers on its closed ecosystem of devices would give it an extra edge – that is, if its focus is still on the AR market.
Given that both tech giants have faced major flops in the market previously, the race is far from over, said Lang. “Everyone is kind of inching forward right now.”
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