Although the eXtended Reality (XR) market is currently relatively small, it has become a key investment focus for technology giants like Meta, Apple, Qualcomm and Google. These companies view XR glasses not only as a showcase of their R&D capabilities but also as a potential next-generation computing platform that, once fully developed, could replace some of the widely used smart devices of today. Qualcomm, a pioneer in the XR industry, has been investing in this technology for over 20 years. At the Counterpoint & DSCC AR/VR Display Summit, Flora Tang, Senior Analyst at Counterpoint Research, had an insightful conversation with Said Bakadir, Senior Director of Product Management at Qualcomm, to explore Qualcomm's view on the future of the XR industry.

The Interview

Key Takeaways from the Discussion

The Integration of AI and XR

• General AI technology has transformed user interactions with XR devices, making them more intuitive through advancements like hand tracking, eye tracking, body tracking, and various other recognition and tracking technologies now implemented in AR/VR devices.

• The next phase will focus on combining Generative AI (GenAI) with XR to enable smarter AI assistants on XR glasses. This integration is poised to unlock new functionalities and applications, significantly enhancing the value of the glasses form factor. While we are still at the early stages of the GenAI era, the potential for innovation through merging GenAI with XR glasses is immense as the technology continues to advance and mature.

• A key consideration is the seamless integration and interaction among a constellation of AI-powered smart devices. In the future, AI will operate across multiple devices around the user, from smartphones and wearables to laptops and smart home devices. Some functions will run locally on individual devices, while others will rely on the cloud. For companies within this ecosystem, collaboration is essential to create a cohesive, fluid user experience across all AI-enabled devices. Qualcomm remains dedicated to this vision, actively developing solutions to elevate the user experience across an interconnected device landscape.

Qualcomm’s Latest XR Platforms

• Qualcomm’s latest VR/MR chips, the Snapdragon XR2 Gen 2 and Snapdragon XR2+ Gen 2, enable headsets to deliver top-tier performance at affordable prices. The XR2+ Gen 2 supports up to 12 concurrent cameras and 4K by 4K resolution per eye, and both platforms offer low-latency video see-through at only 12ms, ensuring a seamless MR experience.

• Meta recently launched the Meta Quest 3S based on Qualcomm’s XR 2 Gen 2 platform. The new product is priced at just $299, supporting most applications available on the Meta Quest 3, including MR and gaming applications. This affordability is made possible by Qualcomm’s powerful yet cost-effective XR SoC, which is crucial to drive VR adoption and allows more users to experience the benefits of this innovative form factor.

• The Snapdragon AR1 Gen 1 Platform is Qualcomm's first Snapdragon XR platform designed specifically for smart glasses. It supports advanced smart glasses like the Ray-Ban Meta smart glasses, enabling features such as seamless photo capture, livestreaming, notifications, and powerful on-device AI. These glasses allow users to go hands-free and reduce reliance on smartphones in various scenarios. Qualcomm’s platform enables these useful features in a lightweight, power-efficient design, allowing users to wear the glasses comfortably for extended periods and fully enjoy their convenience.

Expanding Collaborations with XR OEMs

• Meta is a key customer for Qualcomm. The company also has a strong pipeline of partnerships, including with Pico, Sony, Samsung, and others.

• Pico recently released the Pico 4 Ultra, powered by Qualcomm’s XR2 Gen 2 platform. Qualcomm is actively collaborating with Samsung and Google to develop a next-generation device, and earlier this year, Sony launched a new XR device based on Qualcomm’s XR2+ Gen 2 platform.

• Qualcomm remains focused on expanding its product portfolio to cater to different markets, product tiers, and use cases, aiming to work with industry partners to scale the XR market and bring solutions that can enhance everyday life for a broad consumer base.

Qualcomm’s View on the Future of XR

• Qualcomm envisions XR as a transformative technology with the potential to scale up and become a next-generation computing platform, potentially replacing certain existing smart devices.

• The company recognizes that technological advancements in XR are gradual rather than immediate, requiring time for breakthroughs in areas like processing power, battery life, display quality, and form factor design. However, Qualcomm remains confident that as these incremental advancements accumulate, XR adoption will accelerate, eventually reaching a tipping point where the market takes off.

• With strategic investments and partnerships, Qualcomm aims to be at the forefront of this growth, positioning itself as a leader in the development and integration of XR technologies into mainstream consumer devices.

Analyst Takeaways

• Qualcomm has established itself as the definitive leader in the global XR system-on-chip (SoC) market, commanding over 90% market share as of 2024, according to Counterpoint’s AR/VR Model Shipments Tracker. As an early mover in the XR industry, Qualcomm consistently invested in this sector, even during its nascent stages when the market was small and highly niche. Its contributions include the introduction of high-performance XR processors that deliver exceptional computing capabilities, enabling advanced immersive experiences and seamless human-device interaction. Additionally, Qualcomm’s Snapdragon Spaces XR platform, an innovative software development solution, has been instrumental in creating seamless XR experiences, cementing the company’s dominance.

• The rapid advancement of generative AI technologies is poised to drive significant growth in AR glasses and AI glasses (without display or optical components) in 2025. This trend is further amplified by the entry of numerous companies developing their first AI glasses products. As the market transitions toward lightweight, power-efficient devices that integrate on-device and cloud-based AI capabilities, Qualcomm is well-positioned to maintain its leadership role. Its deep expertise in developing compact and efficient solutions solidifies its role as a preferred partner for powering the next generation of smart glasses innovation.

• In the VR/MR segment, the upcoming launch of Samsung’s first mixed-reality (MR) headset, developed in collaboration with Qualcomm and Google, is set to be a pivotal moment. We expect innovative applications to emerge from this partnership and the Snapdragon XR platform to demonstrate its efficiency in supporting the Android XR OS. Furthermore, we also expect to see Qualcomm and Google’s strategies to expand their solutions to other hardware OEMs.

• We expect Qualcomm’s long-term investment in XR, coupled with its wealth of experience in product development and robust client relationships, to position it as a key beneficiary of the expected XR and smart glasses market expansion. The company’s technological advantages, market leadership, and ecosystem partnerships are expected to sustain its competitive edge and drive growth as the market matures.