Xreal, Partner of Google in Smart Glasses, Claims to Have Overcome Industry Challenges

The smart glasses market has been a long-standing goal in Silicon Valley. The concept is captivating: What if individuals could wear a lightweight computing device on their face instead of constantly checking their phones to enjoy the benefits of mobile technology? Science fiction fans (a prominent segment of the tech world) can vividly imagine this scenario.

However, despite the appeal, the sector has largely operated as a financial black hole over the last ten years, consuming enormous investments with little to no returns.

“Everyone is losing money,” asserted Chi Xu, founder and CEO of the smart glasses company Xreal, which has long partnered with Google. I interviewed Xu at Google’s I/O conference in Mountain View last week, where he spoke about Xreal’s Project Aura, their new initiative aimed at developing a practical set of XR glasses that consumers truly desire.

“Our undertaking is quite demanding,” he added.

Throughout much of the industry’s timeline, the obstacles of smart glasses have been evident: cumbersome, uncomfortable, and socially awkward designs paired with software that offers limited value. Nevertheless, many within the industry, including Xu, feel that they may be nearing a crucial turning point.

This potential turning point is associated with Meta, whose collaboration with Ray-Ban in 2023 launched one of the few lines of smart glasses to achieve notable sales. (It’s important to note that the division overseeing the glasses, Reality Labs, continues to operate at a considerable loss.)

With progress in design and software, Xu is optimistic that Xreal could finally lead the market. “You must have all the key components — the hardware, the operating system, and an outstanding user interface,” Xu detailed.

Xreal’s newest model, Aura, showcases wired smart glasses featuring OLED displays, enabling users to view high-resolution videos directly within the frames. However, Aura requires a “puck” — essentially a mini computer that powers the glasses’ functionality, which users can conveniently carry in their pocket.

In exchange for the puck’s inconvenience, users gain access to a wider array of engaging experiences, such as an immersive Google Maps application, VR YouTube videos, and a “painting app” that allows the creation of holographic images through hand tracking. Games and basic web browsing functionalities are also reportedly available using hand tracking.

“Whether you’re following a floating recipe while cooking, setting up a personal workspace at a café, or enjoying a movie on a virtual big screen at home, the experience is seamless,” the company claims.

Xu further envisions the device appealing to both casual users and professionals. “It’s not just about experiencing an NBA game in holograms; you could also work efficiently in a coffee shop,” he noted.

At present, the glasses are available only to developers, but plans for a commercial release are underway later this year. Xreal is also gearing up for an IPO anticipated before the end of 2026, though Xu remained tight-lipped on the details.

For the time being, the company is focused on becoming profitable. Xu points out that Xreal has been enhancing its gross margin while cutting marketing and sales costs. “Next year could be the year we finally break even,” he remarked.