In October 2026, Titanium Media published an in-depth report noting that AI glasses are experiencing a “carnival with no winners”: global shipments have surged, new models are being launched at a rapid pace, and capital is pouring in—but the industry chain, from contract manufacturers and brands to distributors, is universally mired in a hemorrhaging situation where “each unit sold results in a loss.” According to Omdia data, global AI-glasses shipments reached 4.2 million units in the first half of 2026, up 127% year over year; China’s smart-glasses shipments totaled 520,000 units. During the same period, on average, a new model was unveiled every three days, and the number of domestic brands has approached 400.
Behind the hype lies a structural imbalance: JD.com’s 618 sales surged more than threefold year over year, yet in China’s AI glasses market, “others” (brands outside the top five) account for as much as 54% of the share—far higher than the roughly 17% seen in the smartphone and tablet sectors—highlighting an unhealthy ecosystem characterized by rampant white-label products and a lack of dominant players. Return rates remain stubbornly high, exceeding 50% online and averaging around 60–70% overall. Meanwhile, most display‑type AI glasses boast gross margins of just over 20%, with profits largely siphoned off by distributors, leaving end‑brand manufacturers generally operating at a loss.
The financing side is also showing signs of fatigue: In the first half of 2026, the global smart glasses industry chain disclosed a total of 64 financing, M&A, and strategic investment deals, amounting to roughly RMB 9 billion. However, 70% of these were concentrated in the upstream optics and micro-display segments. Venture capital activity has noticeably cooled, with investors shifting their focus to asking for clear timelines on profitability. Xiaomi’s AI glasses project has fallen short of internal expectations, posting losses of about RMB 200 million, while some customers who purchased the product at a 40% discount have resold it on Xianyu for just a few dozen yuan.
To ease financial pressures, XREAL filed its prospectus with the Hong Kong Stock Exchange in April 2026, while Rokid and Thunderbird have also reportedly been gearing up for IPOs. However, many companies still lack dedicated IR or PR teams, revealing hasty preparations for going public. Meanwhile, Hive Technology proactively discontinued its new AI glasses product line in early 2026, with the founder bluntly stating, “Cut your losses in time—don’t dwell on sunk costs.” The report underscores that all narratives of a “first year” or an “explosive breakout” ultimately must confront two fundamental realities: curbing losses across the supply chain and addressing declining return rates.