Xreal, a long-time partner of Google in the smart glasses space, believes the notoriously difficult augmented reality and smart glasses industry may finally be approaching a turning point.

For years, the sector has struggled with high costs, limited consumer adoption, and underwhelming software experiences, leading many companies to burn significant capital without achieving profitability.

According to Xreal CEO Chi Xu, the challenges stem from the need to simultaneously perfect hardware, operating systems, and user interfaces, a combination that has historically been difficult to achieve.However, Xu now argues that recent advances suggest the industry is beginning to mature.

A key reference point for this optimism is Meta’s partnership with Ray-Ban, which has demonstrated that stylish, consumer-friendly smart glasses can achieve meaningful unit sales, even though Meta’s Reality Labs division continues to operate at a substantial loss.

Against this backdrop, Xreal is positioning its latest product, Project Aura, as a next-generation XR glasses system designed to make immersive computing more practical and appealing.

Aura features OLED displays embedded into the glasses and relies on a tethered pocket-sized computing device, or 'puck,' to power the experience.

Despite its slightly awkward form factor, the system enables a range of applications, including immersive Google Maps navigation, VR YouTube viewing, hand-tracking-based gaming, a holographic painting app, and basic web browsing.

Xreal envisions use cases ranging from entertainment, such as watching movies on a virtual large screen, to productivity scenarios like working in a coffee shop with a private virtual workspace.Currently, Aura is only available to developers, but a commercial launch is planned later this year.The company is also preparing for a potential IPO before the end of 2026.

Financially, Xreal says it is improving margins and reducing marketing costs, with CEO Chi Xu suggesting the company could reach break-even as early as next year if current trends continue.