EssilorLuxottica’s Smart Glasses Hit Early Success Amid Privacy Fears and Fierce Rivalry
EssilorLuxottica is making a substantial investment in smart eyewear, a gamble that is facing its first major test. The company's Ray-Ban Meta glasses, powered by artificial intelligence, have delivered their initial meaningful revenue boost this year. However, analysts warn that this growth could be constrained by significant privacy concerns and a wave of emerging rivals.
The frames, initially launched in 2021, aim to disrupt the traditional smartphone era by enabling wearers to take photos and videos using tiny cameras embedded in the lenses, stream content to Meta apps, and communicate with an AI assistant. While these features promise to make the AI-powered frames—a collaboration between Meta and French-Italian eyewear giant EssilorLuxottica—into a must-have device, they are simultaneously sparking concerns. Bystanders have little control over being recorded or how their personal data is handled.
Kleanthi Sardeli, a lawyer at the European digital rights advocacy group NOYB, stated that "AI smart glasses raise significant privacy concerns." Sardeli identified the primary issues as being linked to "the use of people's personal data to train AI models and transparency for bystanders."
Meta Platforms, which generates the majority of its revenue from advertising across Facebook, Instagram, and WhatsApp, leverages user data to power its artificial intelligence tools. This practice has subjected the company to scrutiny over its data handling policies. European regulators flagged risks as early as 2021, when both Italy and Ireland requested clarification from Meta regarding compliance with local privacy laws. Ireland's Data Protection Commission questioned whether a tiny LED indicator was sufficient to alert people that they were being filmed, prompting Meta and EssilorLuxottica to enlarge the light and add a blinking pattern.
Privacy concerns are particularly strong in the European Union, where stricter regulations have slowed the adoption of some AI features. AI-enabled wearables are governed by the EU's AI Act and the General Data Protection Regulation (GDPR). A European Commission spokesperson indicated that "Any recording of individuals must be clearly communicated and must have a legal basis to record individuals," unless the data is processed solely for personal or household reasons. However, NOYB argues that enforcing these rights is difficult when the device owner is unknown.
A 2024 survey conducted by Monash University involving over 1,000 Australians found differing perspectives on smart glasses. Owners viewed them as boosting self-image and social ties, while non-users expressed fears regarding privacy breaches and social disruption. EssilorLuxottica stated that it partners "with competent authorities to drive innovation, safeguard privacy and set new industry standards." A Meta spokesperson declined to comment beyond referring to EssilorLuxottica's statement.
Analysts and experts attribute Ray-Ban Meta glasses' current leadership in the AI eyewear market to a partnership that effectively merges technology and fashion. This collaboration avoided the pitfall that led to the failure of Google Glass a decade ago. According to Barclays, EssilorLuxottica currently holds a 60% share of the smart glasses market. Ross Gerber, CEO of California-based wealth management firm Gerber Kawasaki, commented, "Instead of trying to make something cool, Meta partnered with people who know what’s cool."
Despite this first-mover advantage, Bernstein analyst Luca Solca suggests that it may fade as rivals introduce more advanced products. Smart glasses also carry the risk of potentially cannibalizing traditional eyewear sales, which account for roughly one quarter of EssilorLuxottica's revenue.
Several tech giants are aiming to catch up. In November, Alibaba released its new Quark AI-powered glasses in China, a market where Ray-Ban Meta glasses are not sold. Apple is expected to unveil its own model next year, with a larger release planned for 2027. Google has partnered with Warby Parker and luxury fashion house Kering to develop its own version, announcing on Monday that it expects to launch a first product in 2026, causing EssilorLuxottica shares to fall. Amazon is also reportedly exploring the market, and Xiaomi launched a similar product in June.
As the world's largest eyewear maker, EssilorLuxottica possesses significant competitive advantages, including its 18,000-store network and a portfolio of powerful brands such as Prada, Armani, and Chanel. Bassel Choughari, a portfolio manager at Comgest, emphasized, "One of the key differentiating elements for them is not just their ability to produce, but also their ability to distribute, and their ability to leverage a portfolio of brands. That is an element that shouldn’t be underestimated."
EssilorLuxottica CEO Francesco Milleri, who took charge in 2020, is steering the group toward medical technology. Smart glasses are central to this strategy. According to investor CCLA estimates, smart glasses contributed more than four percentage points to EssilorLuxottica's nine-month sales growth, sparking a 14% market rally for the 140 billion euro company, even though they account for just 2% of global sales.
EssilorLuxottica seeks to build on this momentum. It has expanded its portfolio to include sports brand Oakley and held exploratory discussions with Lorenzo Bertelli, heir to the Prada luxury brand. In September, the company introduced a new model featuring an in-lens display, operated through a bracelet that converts hand gestures into commands. The company states that competition is welcome, asserting that "A vibrant ecosystem will help us drive market growth, fuel innovation and expand consumer choice."
