2025 might witness a significant shift in the XR market. Earlier in the decade, the XR market saw the successful adoption of the affordable Meta Quest 2 VR headsets, which brought accessible VR into the homes and businesses of many for the first time. While this device was not the first mass-market or enterprise-facing VR headset, the waves it made are undeniable.
However, as the second half of the decade approaches, attention is turning to the next major trend in XR: AR smart glasses and MR headsets. Already, new devices are hitting the market today, and promises for the future are hefty.
With the introduction of devices like the Meta Ray-Ban Smart Glasses and the Apple Vision Pro spatial/MR computing headset, interest in VR hardware is increasingly shifting towards upcoming AR/MR technologies. Although widespread adoption has not yet occurred, various insights suggest that expectations of improved hardware and decreasing prices may drive more significant interest in AR/MR.
The International Data Corporation (IDC) reported a notable decline in global AR/VR headset shipments during the first quarter of 2024. The report indicated a staggering 67.4 per cent year-over-year drop in shipments for Q1, with the decline primarily affecting VR headsets as consumers shifted their focus to MR/AR devices.
In addition, ResearchAndMarkets recently published its “Smart Augmented Reality Glasses—Global Strategic Business Report,” which discusses the growth rates of smart glasses, potential opportunities for enterprises, and the prospect of smart glasses replacing VR headsets. The report revealed that the global market for smart glasses reached approximately 678,600 units in 2023. Moreover, ResearchAndMarkets forecasts significant growth, predicting an increase of 13 million units by 2030, resulting in a compound annual growth rate (CAGR) of 53.0 percent from 2023 to 2030.
To explore the emerging AR wearables market leading into 2025, Kevin O’Donovan, Co-Chair of the Industrial Metaverse & Digital Twin Committee at VRARA, and Jennifer Rogers, Executive Officer of the Learning Technology Standards Committee at the IEEE, spoke on the latest trends influencing the sector during the latest edition of the Big XR News Show.
The Syngery of AI and AR
While the AR market is seeing a general uptick at the moment – outside of pre-existing niche business use cases and smartphone integration – AR is still taking second place in AI – 2024’s hottest tech trend. O’Donovan noted that at industry events acccross the second-half of the year, “AI has sucked the air out of everything, if you don’t have AI written on the wall, everyone kind of goes, you’ve missed the bus.”
While this AI focus is taking a lot of interest away from XR, at the same time, and more clearly into the latter half of 2024, the synergy of AI and XR is becoming more apparent. GenAI can smoothen the XR content creation process, notably assisting with the production pipeline and reducing the required time and capital to deploy a solution for consumers or businesses.
O’Donovan also added:
Obviously, AI means many things to many people. Marketing has gone nuts; AI stickers are on everything. At ADIPEC, the biggest oil energy event on the planet, I probably came across 40/50 demos with VR. I probably came across 5 or 6 with AR glasses. I was at Web Summit, now granted, Web Summit is all about startups, but I came across a couple with smart glasses. AI was dominant.
More specifically, AI is becoming more commonplace as a feature within AR hardware products, with brands like Ray-Ban, Meta, Vuzix, and others integrating ML and AI features. These integrations enable AR devices to provide AI virtual assistance tools, information scanning, and live translation for example.
The crossover of AI and AR in smart glasses is still an emerging topic. In 2025, the technologies merge will only advance as smart glasses shipments are forecasted to increase. Moreover, O’Donovan explained that despite a large volume of interest shifting towards AI, there is still “a lot of research and development being done on the technology going into smart glasses, the lenses, the displays, sound, and voice commands.”
Optimising AR Wearables
Modern AR devices are incredibly powerful and provide a great technology solution today. The list of firms is countless, and each hardware provider has a different selling point. While there are still hurdles like the number of system-selling immersive services, device weight, and battery life, the efforts of innovative hardware providers should be highlighted.
O’Donovan added:
Hardware will become much less frictionless. But as I say, there are plenty of headsets out there today—AR, VR, and MR—that do a brilliant job for certain use cases.
However, the market still needs to evolve significantly before it can hit the smartphone moment for AR smart glasses, where AR wearables and, therefore, 3D data interaction have become a must-have technology for everyone. Meta recently showcased its Orion device at Connect 2024, which Zuckerberg highlighted as a time machine, a device that may be in users’ heads in the next decade.
The Orion device is incredibly expensive and complex to produce, but the hype is high. With Meta looking to continue its partnership with Ray Ban’s parent firm into 2030, it’s clear Meta sees a future where advanced AR smart glasses become ubiquitous.
O’Donovan added:
OpenAI and Meta bring this to the masses, and that’s going to continue at a pace. I think whoever cracks that will discover the next smartphone market, so no wonder they’re chasing after it.
O’Donovan added that new devices like the Apple Vision Pro have generated a lot of interest; however, the “experience is not perfect” due to the amount of hardware required; “the laws of physical can’t make that smaller yet.”
“There’s not going to be a breakthrough in the next 12 months,” regarding major form factor hurdles, however “for niche use cases, there are devices,” O’Donovan added.
Leveraging Smart Glasses in Businesses Environments
Rogers noted that many industry experts and leaders are experienced in leveraging smart glasses for industrial applications, not consumer applications. However, issues regarding the usability of AR wearables in high-pressure enterprise and industrial settings are apparent: ” Industrial applications for some time have all struggled with this.”
Rogers explained:
It started out with the battery power just being wholly inadequate to actually wear on the job, they were too heavy, you had to charge them all the time. We’ve gotten to the place in which some of those things have been solved.
To Kev’s point, Rogers noted that “because of the limitations” of what hardware vendors can currently put into a wearable XR device, there are still hurdles stopping the profound adoption of AR devices in enterprise sectors. Prevailing issues such as form factor, distracting workers from their—at times dangerous—environments, zone-rating requirements, and more are significant factors in adoption.
Despite the many hurdles, Rogers remarked on how some vendors are leading in providing applicable XR hardware: “Realwear is one of the only ones that’s been in the space for any considerable period of time that can handle those types of environments.”
Rogers added:
As people are starting to move beyond the pilot, it’s important to look at what devices work for different applications. I think people are still in the process of doing that. A lot of the senior leaders who may be able to make decisions in some of these organizations aren’t even aware of the different nuances in AR and the different types of devices that they might need in different types of environments and for different purposes. I think we’ve still got a fair amount of work to do there.
To learn more about the maturation of the eXR market, check out Rogers and O’Donovan’s thoughts on recent industry-facing events.
