The Spotlight’s on AI Smart Glasses – Where Does That Leave VR?

As technology vendors pivot towards AI-enhanced smart glasses, the momentum previously seen with virtual reality (VR) headsets appears to be waning once more.

This isn’t the first instance where the technology’s potential has exceeded actual market demand. An initial wave of excitement in the early 1990s sparked predictions of widespread adoption, only to diminish as the decade progressed. 

The most recent surge in enthusiasm—dating back to approximately 2014 with Facebook’s acquisition of Oculus—intensified dramatically during the COVID-19 pandemic. With social distancing becoming commonplace, the “metaverse” concept gained traction, and both VR and augmented reality (AR) were widely proclaimed to have finally arrived.

Now, as of early 2026, this bubble of excitement has deflated again. Major vendors are scaling back their ambitious plans amidst lukewarm interest from both consumers and businesses. 

“It wouldn’t be an exaggeration to declare another VR winter,” stated J.P. Gownder, vice president and principal analyst at Forrester. “I believe we could even say that only a handful of truly successful scenarios exist where people actively utilize VR.”

After investing billions into developing AR/VR hardware and software, Meta reportedly downsized its Reality Labs division by 10% last month. Despite this, several thousand Meta employees continue to work on immersive technologies, and the company has hinted at ongoing development for its Quest headsets. Recent updates to its Horizon OS suggest a stronger focus on entertainment rather than social media applications for these devices. 

However, with the discontinuation of services like Horizon Workrooms—once promoted as the metaverse for the workplace—and the closure of three of its acquired game development studios, Meta’s shifting priorities are evident.

Meta isn’t the only tech giant scaling back its VR aspirations. Apple, too, has struggled to ignite demand for its advanced (and costly) Vision Pro headset. Two years and one minor hardware update later, the device’s core appeal remains ambiguous, and Apple has yet to reveal plans for a more affordable successor. (The Vision Pro’s $3,499 price tag has significantly hindered widespread adoption.)

“The market has made its position clear: not everyone will be able to afford an Apple Vision Pro, nor a [Samsung’s] Galaxy XR,” stated Ramon Llamas, research director at IDC. “We’re discussing devices priced in the four figures, exceeding the cost of many high-end smartphones—a substantial sum for people to spend.”

Annual VR Device Sales Figures

Projections for virtual and mixed-reality headsets indicate only moderate growth for the foreseeable future.

Approximately 200,000 VR-only headsets were shipped in 2025, according to IDC, illustrating a broader transition towards mixed-reality devices. Fewer than 50,000 are anticipated to ship this year. For mixed-reality hardware, the outlook is more positive; just under 4 million headsets were shipped in 2025, IDC reports. This marks a significant drop from 2024, which was a comparatively strong year for the market due to the introductions of Meta Quest 3 and the Apple Vision Pro.  

This year, IDC forecasts a sales recovery, with an estimated 6 million units shipped. This anticipated increase is partly attributed to the launch of Samsung’s Galaxy XR and Vision Pro updates late last year. “Our expectation is that the market will see a bit more of a rebound in 2026,” Llamas noted, “but I don’t believe we’ll witness a ‘hockey stick’ effect in 2026.”

Nevertheless, virtual and mixed reality headsets have successfully found traction in specific niche applications. 

For instance, in employee training, staff can practice high-risk or high-pressure scenarios, including dangerous industrial tasks, managing customer disputes, or even the widely-dreaded task of public speaking. Remote customer support has also seen some adoption, as has employee collaboration involving 3D imagery.

Moreover, while hardware manufacturers now seem to prioritize the development of AI glasses, the recent launches of Samsung’s Galaxy XR headset and Google’s Android XR operating system indicate that major vendors have not entirely abandoned the technology, even if their focus is expanding to other device categories like smart glasses.

“I don’t believe the market is disappearing; rather, it’s navigating through its developmental challenges,” Llamas commented. “No one achieves seamless success from day one. Companies will retreat, refine, and iterate again. We know these companies are quite adept at iteration.” 

Looking further ahead, IDC anticipates mixed reality devices will reach 12 million unit shipments by 2029—a threefold increase from 2025, yet still a minor figure compared to other hardware categories. “For that specific market, that’s substantial,” Llamas observed. “However, in the broader context, it still significantly trails smartphones, PCs, tablets, and other wearables like smartwatches. 

“I still believe we’re primarily appealing to early adopters and technophiles; I struggle to envision it making a substantial impact on the mass market.”

Augmented and Extended Reality

Other segments of the XR market—an overarching term encompassing virtual, augmented, and mixed reality technologies—are progressing at varying speeds.

Gownder highlighted some enterprise interest in augmented reality, although few solutions depend on headsets. “There’s simply not much happening here that isn’t already being accomplished with phones and tablets,” he explained.

One potential growth area, Llamas suggested, is “extended reality.” This refers to glasses that connect to a smartphone or PC, projecting a large screen into the user’s field of vision. This category includes devices from manufacturers such as Xreal and Meta Display glasses, which align with IDC’s classification. 

These extended reality glasses offer a more distinct use case than mixed reality headsets, and they are considerably more affordable and lighter, Llamas observed. “You’re looking at a few hundred dollars instead of several thousand. And these truly function as an accessory to your smartphone, rather than a direct replacement,” he elaborated. 

IDC estimates that 1.3 million extended reality units were shipped in 2025—more than doubling the 600,000 units sold in 2024.  

To provide context, the entire XR market—encompassing both headsets and glasses—is estimated at just under 15 million units shipped in 2025, with forecasts projecting a rise to just over 40 million units by 2029.

AI Smart Glasses 

A related technology gaining traction in the consumer market involves AI-powered smart glasses, such as Meta’s Ray-Ban models. These glasses function more like wearables than XR devices, lacking a display or graphics. They utilize microphones, speakers, and cameras for voice-based interaction with an AI assistant, alongside hands-free image and video capture, calls, and audio playback.

Without the requirement for complex graphics, these devices can be lighter and less noticeable for users. “AI glasses are something that a broader consumer base—beyond just gamers and multimedia enthusiasts—can comprehend and find appealing,” Llamas noted. 

Mobility stands out as a key advantage. “I can wear these publicly, stroll down the street, drive a car, and so forth,” he explained. “Furthermore, people are becoming more receptive to the concept of having a smart assistant integrated into their eyewear—be it Siri, Gemini, or another platform.” 

Following the initial success of Meta’s Ray-Ban smart glasses—with 7 million units sold in 2025, according to manufacturer EssilorLuxottica—numerous tech vendors are reportedly developing their own versions. This list includes prominent names like Apple, Google, and OpenAI, among others.

Simultaneously, it remains uncertain whether these devices will achieve widespread adoption among the general public. IDC forecasts shipments to increase to 18.7 million units by 2029—a figure far removed from the smartphone market, where over a billion phones are sold annually.

Gownder currently identifies limited applications in enterprise settings, particularly given the scarcity of ruggedized device options.

Beyond that, broader societal challenges are also at play. While privacy concerns have somewhat subsided since the debut of Google Glass over a decade ago, a recent New York Times report indicating Meta’s plans to incorporate facial recognition into its Ray-Ban glasses underscores ongoing anxieties surrounding wearable surveillance technology.

The Future of XR

It’s conceivable that some of these device categories may converge over time as technology advances. Some experts envision true AR glasses as the ultimate objective, allowing for graphic overlays within lightweight, less obtrusive frames. However, achieving this is likely still far off.

“Some convergence is indeed underway, but we haven’t reached that final stage yet,” Llamas remarked. “The positive aspect is that most technologies—including smart glasses and XR glasses—typically serve as stepping stones to subsequent innovations.” 

For now, there is no realistic prospect of the technology fulfilling the lofty expectations set in recent years for XR devices—be they virtual, mixed, or augmented reality, or any other iteration.

So, will XR technologies truly achieve mass adoption in the not-too-distant future? On this point, analysts present divided opinions. 

“It certainly appears that VR has not found its definitive audience, or perhaps it never will—it’s difficult to say,” Gownder commented. While not prepared to make a final judgment, he highlighted a potential trajectory where virtual reality devices “will simply remain a highly specialized niche technology.”

Llamas, conversely, views the market as still being in its nascent stages. 

“These are the crucial growing pains—or, as some might call them, the birthing pains—of an emerging market establishing itself,” he asserted. Despite reports that Meta and others are scaling back certain ambitions in this sector, he emphasized that they are not abandoning it entirely. 

“They are adapting, they are evolving, as they should be…,” Llamas concluded. “I think ‘VR winter’ is a fitting metaphor for the current situation. But following every winter, there is always a spring.”