Huaxi Securities: RAYBAN META ignites the market, smart glasses enter the accelerated iteration and integration stage

According to the Zhitong Finance and Economics APP, Huaxi Securities released a research report stating that after Google released Google Glass in 2012, smart glasses officially entered a development period. In the early stages, AR glasses were the main form, but due to technological and cost constraints, AR glasses have always been niche products with sales of less than a million. With the improvement of electronic device and chip integration, smart glasses have evolved into various forms such as viewing smart glasses, auxiliary information display smart glasses, photography smart glasses, smart audio glasses, etc. This has led to the emergence of popular products like RayBan Meta. With the continuous development of artificial intelligence technology, optical display technology, etc., various forms of smart glasses products will accelerate iteration and integration, and the ideal form of smart glasses is within reach.

Diverse forms of smart glasses products are accelerating integration and iteration

Meta, in collaboration with EssilorLuxottica, launched the second-generation smart glasses product RayBan Meta in September 2023, which can achieve basic functions such as video/photo shooting, voice/video calls, etc. In April 2024, it was equipped with the Meta Llama 3 multimodal large model, which can achieve functions such as system command interaction, object recognition, text translation, etc.

Huaxi Securities believes that the popularity of RayBan Meta benefits from the continuous iteration of product hardware, which ultimately triggers a qualitative change. The second-generation product has undergone comprehensive upgrades in imaging, audio, computing, storage, etc., while the empowerment of the large model makes the product interaction experience more perfect. The success of RayBan Meta validates the product logic of "first glasses, then embedded intelligent technology", and other manufacturers are expected to successively launch corresponding products to accelerate the penetration of smart glasses in the consumer market.

RayBan Meta's popularity benefits from hardware upgrades and AI empowerment, accelerating the penetration of smart glasses into the consumer market

Currently, stand-alone viewing AR glasses account for the main share. The development of Micro LED + waveguide is promising. Currently, the AR glasses market is mainly dominated by viewing glasses using the Birdbath + MicroOLED solution. Due to issues such as low external transmittance, large module volume, and high light loss in the Birdbath optical solution, and the low brightness and limited material lifespan of MicroOLED, this form of AR glasses is currently a transitional product. The waveguide solution has advantages in volume, clarity, FOV, etc., while Micro LED excels in brightness, response speed, and lifespan compared to MicroOLED. Micro LED + waveguide may be the optimal optical display solution for AR glasses, and is expected to occupy a major market share after the production process and technology mature.

Investment advice: With the accelerated integration and iteration of various smart glasses products and the development of technologies such as artificial intelligence, smart glasses are expected to enter a fast lane of high-speed development in the medium to short term. In the future, there is hope to see more explosive products similar to RayBan Meta, and companies related to the industry chain are expected to benefit significantly. Beneficiaries: GoerTek Inc. (002241.SZ), Longqi Technology (603341.SH), Crystal Optoelectronics (002273.SZ), Bewinner Storage (688525.SH), Hengxuan Technology (688608.SH), etc Risk Warning: Lower-than-expected downstream demand, and lower-than-expected technological research and development