Xreal, Google’s smartglasses partner, thinks it’s finally got a handle on the notoriously bad industry

The smart glasses industry has long been a tortured dream of Silicon Valley. The premise is interesting enough: What if, to enjoy the benefits of mobile computing, people didn’t have to stare at their phones all day and, instead, could wear a lightweight computing device on their face? Fans of science fiction (a strong demographic in the tech industry) can see this idea well.

However, the industry – for the most part of the last decade – is like a financial black hole into which gargantuan investments have been sunk and from which little profit has emerged.

“Everyone is losing money,” said Chi Xu, founder and CEO of smart glasses company Xreal, a longtime Google partner. I met Xu at Google’s I/O conference in Mountain View last week, where he was promoting Xreal’s Project Aura. That’s its latest attempt at making a set of functional XR glasses that people want to use.

“That’s because it’s very difficult, what we’re doing,” he said.

For most of the industry’s existence, the problems with smart glasses have been somewhat obvious: size, discomfort, and a poor social aspect, paired with carelessly useful software. Now, however, industry insiders – including Xu – feel that their business has taken a turn and may have reached an inflection point.

That so-called inflection point has something to do with Meta, whose collaboration with Ray-Ban in 2023 launched one of the first lines of models that managed to sell many units. (It is worth noting, however, that the division responsible for the glasses, Reality Labs, is still operating at a significant loss.)

Now, as form factors shrink and software improves, Xu feels Xreal may be a leader in the space. “You need all the key pieces right — you need the hardware ready, the operating system needs to be fixed, and then you need a good user interface,” Xu said.

Xreal’s new model Aura is a pair of wired smart glasses with OLED displays embedded within them, meaning you can watch high-resolution videos within the frames themselves. In a way, the Aura comes bundled in a “puck” – essentially a small phone-shaped computer that powers the experience behind the glasses. If you use it, you can obviously just put it in your pocket.

But thanks to the puck’s complexity, the user gets a wide variety of fun experiences with the glasses, including a dedicated Google Maps app, VR YouTube videos, and a “painting app” that allows you – by using the power of manual tracking – to create holographic images that you can only see. There are also reportedly games, playable (again) with manual tracking, and basic web surfing functionality.

“Whether you’re following a floating recipe while cooking, setting up a private workspace at a coffee shop or on an airplane, or watching a movie on a large virtual screen at home, the experience is seamless,” the company promises.

Xu also says that he thinks the device can be used not only by the average consumer but also by professional workers. “It’s not just about watching an NBA game in the form of a hologram, you can also go to a coffee shop and do some work,” he said.

Currently, the glasses are only available to developers, but the plan is to launch them commercially later this year. Xreal is also working on an IPO that is expected to happen before the end of 2026, although Xu declined to say much about it.

At the moment, the company is working on that whole profit-changing thing. Xu notes that his company has been increasing its turnover while reducing marketing and sales costs. He says: “Next year is the year when we may break free.