Ray-Ban Meta Glasses: A Hit in Europe, Driving Growth for Meta and EssilorLuxottica

Ray-Ban Meta Glasses: A Hit in Europe, Driving Growth for Meta and EssilorLuxottica

The collaboration between Ray-Ban and Meta Platforms Inc (META) has proven to be a winning formula, particularly in Europe. Ray-Ban Meta smart glasses have emerged as the top-selling product in 60% of Ray-Ban stores across the Europe, Middle East, and Africa (EMEA) region. This success highlights the growing appeal of smart glasses and signals a strong performance for both Meta and EssilorLuxottica, Ray-Ban’s parent company.

EssilorLuxottica CFO Stefano Grassi shared the positive news during the company’s third-quarter 2024 earnings call. He expressed satisfaction with the glasses’ performance not only in the EMEA region but also in the US. Notably, the glasses’ $300 price tag, significantly higher than traditional Ray-Ban models, demonstrates that consumers are willing to pay a premium for smart glasses that blend style and functionality.

While the Ray-Ban Meta glasses currently offer basic smart features like WhatsApp voice messaging and QR code scanning, Meta is continuously expanding their capabilities. Future updates are expected to include live translation and Spotify controls. However, despite the lack of advanced AI features in Europe due to regulatory delays, the glasses have outperformed traditional Ray-Ban models in the region, driving significant sales for the company.

The success of the Ray-Ban Meta glasses has likely contributed to Meta’s decision to extend its partnership with EssilorLuxottica into the 2030s. JMP Securities’ Andrew Boone has expressed growing confidence in Meta’s hardware and extended reality (XR) roadmap. He believes that Meta’s strides in augmented reality (AR) hardware over the past five years have laid the foundation for Orion to become the next major consumer computing platform.

Boone emphasizes that Meta’s platform could significantly boost its profitability if it controls its infrastructure, similar to the success of Microsoft Corp (MSFT) and Apple Inc (AAPL). He also highlights the potential of Meta’s Llama models to capture a portion of search queries. The analyst expects Meta’s continued focus on lowering hardware prices will further boost consumer adoption.

The positive performance of Ray-Ban Meta glasses has been reflected in Meta Platforms stock, which has increased over 83% in the past year. Investors can gain exposure to the stock through the iShares S&P 500 Growth ETF (IVW) and The Communication Services Select Sector SPDR Fund (XLC).

Price Action:

META stock closed at $578.03 on Tuesday, up 0.50% for the day.

The success of Ray-Ban Meta glasses underscores the growing demand for smart glasses and strengthens Meta’s position in the AR hardware market. With continued development and expansion of features, Meta’s smart glasses have the potential to become a significant force in the consumer technology landscape.