Xreal, Google’s partner in smart glasses, believes it has finally mastered this notoriously difficult industry

Making smart glasses has long been a pipe dream for Silicon Valley. The premise is attractive enough: What if, to enjoy the benefits of mobile computing, people didn’t have to stare at their phones all day and could, instead, simply wear a lightweight computing device on their face? Science fiction fans (a powerful demographic in the tech industry) can see this vision perfectly.

Yet for much of the past decade, the industry has been a financial black hole into which huge investments have sunk and little profits have ever emerged.

“Everyone is losing money,” said Qi Xu, founder and CEO of smart glasses company Xreal, a longtime Google partner. I met Xu at Google I/O in Mountain View last week, where he was promoting Xreal’s Project Aura. This is the latest effort to create a line of functional XR glasses that people will actually want to use.

“This is because what we are doing is very difficult,” he said.

For much of the industry’s existence, the problems with smart glasses have seemed fairly obvious: a bulky, uncomfortable, and socially awkward form factor, coupled with minimally useful software. However, industry insiders – including Xu – feel their business has turned a corner and may be reaching an inflection point.

This supposed inflection point has to do with the Meta, whose 2023 partnership with Ray-Ban launched one of the first lines of models that actually managed to sell a lot of units. (It’s worth noting that the division responsible for the glasses, Reality Labs, is still suffering huge losses.)

Now, with form factors shrinking and software improving, Xu feels that Xreal can finally become a leader in this space. “You need to have all the core pieces ready — you need the hardware ready, the operating system needs to be ready, and then you need a great user interface,” Shaw said.

The latest model from the Xreal Aura are wired smart glasses that have OLED displays built into them, meaning you can watch high-resolution videos within the frames themselves. Somewhat awkwardly, the Aura comes attached to a “tablet” — essentially a small phone-shaped computer that powers the experience behind the glasses. When you use it, you can virtually put it in your pocket.

But in exchange for the weirdness of the tweak, users get a wide range of fun experiences with the glasses, including an immersive Google Maps app, VR videos on YouTube, and a “drawing app” that — through the powers of hand tracking — lets you create 3D images that only you can see. There are also said to be games that can be played (again) via manual tracing and basic web browsing functions.

“Whether you’re following a floating recipe while cooking, setting up a private workspace in a café or on a flight, or watching a movie on a virtual big screen at home, the experience will be seamless,” the company promises.

Shaw also says he envisions the device being used not just by the average consumer, but by professionals as well. “It’s not just about watching an NBA game in 3D, you can also go to a café and do some work,” he said.

Currently, the glasses are only available to developers, but the plan is for them to be released commercially later this year. Xreal is also working on an initial public offering that is expected to happen before the end of 2026, though Xu declined to say much about it.

In the meantime, the company is working to fully achieve this goal. Shaw points out that his company has increased its gross profit margin while reducing marketing and sales costs. “Next year is the year we can actually break even,” he says.