Huawei, Xiaomi, and Alibaba are all entering the fray, and the battle for the "next-generation entry point" is in full swing

At a time when the AI glasses industry is buzzing with the "Battle of the Hundreds of Glasses," the sales and return rate of Xiaomi's AI glasses have poured cold water on the industry.

In June of this year, Xiaomi launched AI glasses with a starting price of 1999 yuan, focusing on features such as AI object recognition and voice interaction, positioning them as a "next-generation smart terminal." This pricing is highly symbolic—just as the 799 yuan Redmi phone sparked the wave of smartphone popularity, the industry hopes that the 2000 yuan price point can become the tipping point for the widespread adoption of AI glasses.

"This year, AI glasses are particularly popular, but the current experience and maturity of the supply chain for AI glasses are still insufficient. The shipment volume of Xiaomi's AI glasses has already proven that the experience of AI glasses built at the current level of the supply chain may not support a market of millions," said Xu Chi, founder and CEO of XREAL.

However, reality has dealt a harsh blow to the AI glasses industry. According to industry media XR Vision, the return rate for Xiaomi's AI glasses may be as high as 40%. "Currently, the average return rate for AI glasses is generally between 40%-50%, with some brands even reaching 60%," revealed an industry insider.

Even so, as one of the important application carriers of AI large models, AI glasses have become a key battleground for global tech giants such as Meta, Apple, Google, Xiaomi, ByteDance, and Alibaba, with the core focus on competing for the next generation of human-computer interaction.

Demystifying AI Glasses

Some users who purchased Xiaomi's AI glasses reported that they have become disillusioned with the product after a few days of use.

The overall evaluation of Xiaomi's AI glasses shows a polarized response: the advantage lies in its affordable pricing (starting at 1999 yuan), which has been widely recognized for its cost-effectiveness.

However, the criticisms focus on three aspects: First, certain models are in short supply, such as the monochrome and color electrochromic versions of Xiaomi's AI glasses, which sold out in June, while some colors of the standard version, like tortoiseshell brown, are also out of stock in some stores; second, the hardware quality is lacking, with users noting, "Compared to Meta glasses, Xiaomi's AI glasses feel more plastic, the temples are relatively heavy, and they tend to heat up after wearing for more than half an hour."

Third: the maturity of the functions is insufficient, with AI features not being fully developed. For instance, in terms of AI functionality, some users reported that while the accuracy of simultaneous interpretation is acceptable, the translation speed is slow, and there are occasional lags. Regarding photography, "the first-person perspective shooting function of Xiaomi's AI glasses is better than expected, but due to the camera being located at the junction of the left frame and the temple, the shooting angle deviates from expectations, and there is no way to preview the shooting image, resulting in a high rate of unusable shots," reported a user.

Currently, Xiaomi's AI glasses support a 7-day no-reason return policy (not applicable after fitting), and some users have reported that "they chose to return the product after trying it for a few days." According to industry media XR Vision, the return rate for Xiaomi's AI glasses may be as high as 40%. "Currently, the average return rate for AI glasses is generally between 40%-50%, with some brands even reaching 60%," revealed an industry insider The high return rate of AI glasses essentially stems from the fact that these products have not yet penetrated the user's "practical necessity" threshold. For example, in terms of photography capabilities, current AI glasses find it difficult to outperform smartphones.

Xu Chi's judgment is that the intelligence level of existing AI glasses is roughly equivalent to the IQ of a 5-year-old child. He emphasizes, "AI glasses must support multimodal interaction; relying solely on large language models is meaningless. It's like a car that can only drive in a straight line and cannot turn; such a car is unusable."

In Xu Chi's view, domestic AI glasses companies mainly rely on supply chain optimization. "Under the current supply chain solutions, Xiaomi's AI glasses have matured significantly in Bluetooth connectivity, battery life, photography, and other aspects. If users are still dissatisfied, it indicates that we need to innovate further in supply chain integration, such as breakthroughs in AI modules, system modules, chip modules, optical modules, and so on."

Looking at the global market, currently, only the Ray-Ban Meta, jointly launched by Meta and Ray-Ban, has surpassed one million units in sales. However, some AI glasses entrepreneurs believe that the success of Ray-Ban Meta is primarily attributed to its positioning as a fashion item, with AI functionality being secondary.

"The AI functionality contributes at most T1 or T2 level selling points to the sales of Ray-Ban Meta. The primary factor determining the sales of AI glasses is that they must first be a fashionable pair of sunglasses that users love. Only with this hardware foundation can we further discuss the value of AI functionality," analyzed Xia Yongfeng, founder of Beijing Hive Century Technology Co., Ltd.

Sun Yanbiao, chairman of ChaoDian Think Tank, summarized, "Whether it's Meta or Xiaomi, their AI glasses are basically still in the 'half toy, half tool' development stage, with the tool attribute accounting for only about 30%-40%."

Seizing the Next Generation Interaction Entry Point

Even though AI glasses are still in the "semi-finished product" stage, overseas markets, apart from Meta, are seeing increased investments from companies like Apple and Google in AI glasses.

"Apple is simultaneously developing seven XR devices, covering multiple categories including MR headsets, AI glasses, AR glasses, and Birdbath optical glasses. Among them, Apple's first AI glasses are expected to be released in the second quarter of 2027," revealed Apple analyst Ming-Chi Kuo.

Google is collaborating with XREAL to create the world's first smart glasses compatible with the Android XR ecosystem, Project Aura, which is expected to be released in 2026. Previously, Google launched the first consumer-grade smart glasses, Google Glass, and the enterprise version, Google Glass Enterprise Edition 2 (which has been discontinued).

In the domestic market, the enthusiasm for AI glasses remains high. In addition to ByteDance, there are reports that Alibaba is also developing its own Quark AI glasses, supporting features such as Amap navigation, Taobao price comparison, and Alipay payments, which are expected to be officially released as early as this year In addition, mobile phone manufacturers, except for Xiaomi, have all jumped into the research and development of AI glasses, including major brands like Huawei, OPPO, and vivo, attempting to seize the initiative in technological iteration. "Huawei's previous audio glasses were mainly manufactured by Goertek, and currently, Huawei has a dedicated team internally developing Huawei AI glasses. OPPO and vivo's research institutes are also working on AI glasses," revealed an insider.

The entry of domestic and foreign giants into the AI glasses sector is fundamentally about competing for the core entry point of the next generation of human-computer interaction.

"Traditional wearable devices face challenges due to the lack of interaction methods such as keyboards, touch screens, or mice. The development of AI large models has significantly enhanced capabilities in voice recognition and natural language processing, making XR devices (including AI glasses) likely to become a multimodal interaction entry point that integrates vision, hearing, and language. If issues related to weight, battery life, display, and engineering technology can be completely resolved, AI glasses are expected to become one of the next-generation personal computing platforms," said Wang Guangxi, managing partner of Lenovo Capital.

Xu Chi explained the starting point of this trend: "Four years ago, when Zuckerberg renamed Facebook to Meta, the competition among tech giants for AI entry points had already begun. Zuckerberg's strategy is clear—investing heavily in VR glasses, focusing on the metaverse, and now making substantial investments in generative AI, with the goal of creating an entry point. In the long run, AI glasses and AR glasses have the potential to replace smartphones as the next generation of computing terminals."

In addition to tech giants, many startups are also entering the AI glasses sector.

Xia Yongfeng, founder of Beijing Hive Century, revealed: "In the second half of last year, I knew of more than 20 new AI glasses companies, and later feedback from the upstream supply chain indicated that the number had increased to over 50. There are even companies specifically providing AI glasses solutions, offering ready-made solutions for other companies looking to produce AI glasses and supporting white-label production." An XR device entrepreneur predicted: "This year, the industry may see thousands of manufacturers."

The surge in startups is strongly propelled by the capital market. As AR, VR, and MR technologies mature, the capital market's attention to the XR field continues to rise. The influx of substantial funds not only accelerates technological innovation and product iteration but also drives the rapid expansion of the industrial ecosystem.

According to the "2025-2030 Global and China AI Glasses Industry Market Status Research and Development Prospects Analysis Report," in the third quarter of 2024, there were 137 investment and financing events related to AI glasses, with total financing exceeding $8.5 billion, of which smart optical modules and edge computing modules accounted for 45%.

Additionally, according to incomplete statistics, in the first seven months of this year, the AR glasses sector has completed 13 financing rounds, with investment subjects including AR glasses terminal brands and core supply chain Micro LED (micro-light-emitting diode display) technology companies.

Big Companies vs. Startups: Who Has More Opportunities?

In the XR sector, both domestic and foreign tech giants have entered the fray; where are the opportunities for startups? "This is not a zero-sum game; now is the time for everyone to grow the pie together," Xu Chi said. "The advantage of tech giants lies in ecosystem building, with companies like Google having ecological appeal and AI capabilities. A major issue in the XR (extended reality) field currently is the high price of hardware devices (such as headsets), which makes it difficult to form a scaled ecosystem in the short term. Without a sufficiently scaled ecosystem, developers are reluctant to invest in development immediately."

In Wang Guangxi's view, the success of consumer-grade hardware heavily relies on brand momentum, traffic, and supply chain resources. In terms of brand and traffic, tech giants have an advantage, while domestic startups excel in supply chain integration and optimization.

"In the field of AI glasses, where many large companies are entering strongly, startups can avoid direct brand competition and focus on specific core technologies and supply chain solutions, playing a key supporting role for large companies and the entire ecosystem, rather than independently challenging the mainstream consumer market brand landscape dominated by large companies," Wang Guangxi stated.

In contrast, Xu Chi holds a different opinion. "The XR industry is currently in an era where there is a high consensus on the endgame, but a low consensus on the path to that endgame. At this stage, startups actually have opportunities; when the 'Battle of the Hundred Glasses' truly arrives, it will be a competition of who is faster," Xu Chi said.

When will the real "Battle of the Hundred Glasses" arrive? Xu Chi drew an analogy with Xiaomi's AI glasses. "When Lei Jun personally steps in and says he will invest 70% to 80% of his time in AI glasses, that will be the true moment of the 'Battle of the Hundred Glasses' in this industry."

Author of this article: Ya Xuan, Source: Tencent Deep Web, Original title: "Huawei, Xiaomi, and Alibaba are all entering the fray; the battle for the 'next-generation entry point' is in full swing."

Risk Warning and Disclaimer

The market has risks; investment requires caution. This article does not constitute personal investment advice and does not take into account the specific investment goals, financial conditions, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances. Investment based on this is at one's own risk