By Daniele Lepido, Bloomberg
Meta Platforms Inc. and its partner EssilorLuxottica SA, out to an early lead in the market for smart glasses, are working through differences over pricing and strategy as demand surges, according to people familiar with the matter.
The partners sold more than 7 million Ray-Ban and Oakley AI frames in 2025 — a pace that accelerated with new models introduced in the second half. They are targeting further expansion this year as they seek to consolidate their lead over challengers including Apple Inc.
As their ties deepen, Facebook owner Meta and EssilorLuxottica have had repeated, and at times pointed, internal debates over how to price and promote their Ray-Ban Meta smart glasses, said the people, who asked not to be identified discussing private conversations. The disagreements, described as a push-and-pull by one of the people, never escalated into an outright standoff, they said.
The distinct priorities of each partner contributed to the tensions within the more than six-year collaboration that’s emerged as one of the most strategically important in consumer technology, the people said. Meta, which bought a stake in EssilorLuxottica last year, and its Paris-based partner have been working through their differences, they said, with people on both sides saying the relationship remains constructive and isn’t at risk.
“We’re proud of what we’ve achieved in partnership with Meta,’’ EssilorLuxottica said in response to questions from Bloomberg News. “What began as an ambition to bring together leaders from two distinct worlds has evolved into the first-mover success we’re experiencing today. Our alliance, leveraging strengths from each group, has been very impactful and is stronger than ever.”
Menlo Park, California-based Meta said it joined in EssilorLuxottica’s response; both companies declined further comment on their partnership.
The partners’ goals have been shaped by their differing backgrounds — one a dominant tech player, the other the world’s largest eyewear maker. Meta, in a global race to dominate AI, wants to quickly build scale to seize the smart glasses market, lessening its reliance on hardware from tech rivals like Apple, the people said. Chief Executive Officer Mark Zuckerberg has lobbied for lower prices in order to stoke consumer adoption, they added.
EssilorLuxottica has less room for error. While its manufacturing scale and ownership of retail chains like LensCrafters and Sunglass Hut give it market clout, the Franco-Italian company is still tied to the economics of the luxury segment, where lower-cost frames can risk undermining profit margins.
The opportunity for both partners is potentially massive — smart glasses offer an increasing array of AI-powered features that allow users to take photos and videos without pulling out their smartphones, make hands-free calls and issue voice commands. The latest $799 Meta Ray-Ban Display models have an in-lens display and can be controlled through arm gestures.
Zuckerberg says the devices can eventually supplant smartphones, though analysts have more modest projections. Researcher IDC estimates the smart glasses market will grow at an annual rate of more than 29% to nearly 30 million units by 2029, reaching $10.8 billion in value. By comparison, well over 1 billion smartphones are shipped annually.
The potential to lead a new consumer-tech category has helped propel EssilorLuxottica shares about 30% since the start of 2024, and advanced Chief Executive Officer Francesco Milleri’s goal of pivoting the Franco-Italian eyewear maker toward medical technology.
Its stock has lost ground this year as investors assess emerging competition and the margin impact of AI glasses’ growing share in the sales mix.
“Rivals like Apple stepping up heighten the risk of prolonged margin dilution for EssilorLuxottica,” Bloomberg Intelligence analyst Diana Gomes said in a note. “It’ll need to pull all the levers to improve group margins, while possibly having to live with AI-glasses margin dilution in the medium-term.”
The next stretch of their collaboration will test the partners’ staying power as rivals unleash competing products. Apple has accelerated development of its AI glasses, Bloomberg reported earlier this month. Alphabet is re-entering the smart-glasses market with Warby Parker Inc., while OpenAI brought in iPhone designer Jony Ive for an AI hardware push. Asian companies led by Xiaomi Corp. have also joined the fray, underscoring the risk that a rival ecosystem can gain traction.
Meta delayed the international rollout of Meta Ray-Ban Display frames in January, after US demand outstripped supply.
The tech company has suggested its partner double smart glasses production capacity to 20 million units this year, or even more than 30 million, Bloomberg reported on Jan. 13.
“Sales of our glasses more than tripled last year, and we think that they’re some of the fastest-growing consumer electronics in history,” Zuckerberg said on a Jan. 28 earnings call. “It’s hard to imagine a world in several years where most glasses that people wear aren’t AI glasses.”
Indeed, the companies’ deepening relationship points to confidence that smart glasses can be a goldmine and any differences can be worked out. Meta last year announced it had acquired a stake of at least 3% in EssilorLuxottica.
The companies are in discussions with Italian luxury group Prada SpA, a longtime licensing partner of EssilorLuxottica, to launch Meta-powered AI glasses, people familiar with the matter said. A deal could be reached as soon as this year, they added. Zuckerberg is scheduled to attend a Prada runway show in Milan this week with his wife Priscilla Chan, the people said.
Representatives for all three companies declined to discuss product plans; Prada and Meta had no comment on the couple’s travel plans.
Against the backdrop of heightened competition, talks between the partners can be tense, the people said. Their current collaboration, extended for 10 years in 2024, calls for periodic reviews around items such as pricing and production volumes, they said.
Talks on pricing typically take place two or three times a year, one person said, and are often accompanied by extended message exchanges that can stretch on for days.
In one discussion, shortly after the September 2023 launch of their Ray-Ban Meta smart glasses, Meta’s team pushed to include the new device in Black Friday discounts that November, to capitalize on peak seasonal consumer-electronics demand, one of the people said. EssilorLuxottica objected, arguing that cutting prices so soon would undermine the product’s positioning, the people added. Ultimately there were no discounts, though some third-party gift-card promotions took place.
Ahead of the 2021 launch of their first product, Ray-Ban Stories, Zuckerberg floated the idea of selling the entry-level smart glasses at about $250, arguing that a lower price was critical to building scale, the people said. EssilorLuxottica executives pressed for a higher price, and after weeks of internal review, the partners settled on a compromise at $299, the people added.
For EssilorLuxottica, the burgeoning demand for AI glasses comes with a downside, in the form of lower profit margins due to costs such as factory expansions and more-expensive electronic components.
Adjusted gross margin fell by 2.6 percentage points in 2025 to 60.9% of revenue, with executives saying AI glasses accounted for about two-thirds of the impact. The company didn’t provide a quarterly breakout, but said the headwinds increased in the second half, after the September release of Meta Ray-Ban Display.
In the fourth quarter, EssilorLuxottica was able to counter the margin impacts by blowing past estimates for revenue growth. Milleri promised investors that adjusted operating profit would keep pace with revenue growth over the next five years. Higher-priced new products and add-ons like prescription lenses and coatings would lessen the margin impact over time, Chief Financial Officer Stefano Grassi told analysts.
“We will have the capacity that is needed internally or externally to manage the demand that we will face in the coming years,” Grassi said. “We are planning according to that, in close partnership with Meta.”
One lingering question is whether smart glasses can meet the lofty expectations of Zuckerberg and of Milleri, who said in October that AI glasses “are poised to become the central device in people’s lives, possibly replacing smartphones.”
To date, usage skews toward niche tasks like taking photos, while smart glasses haven’t yet produced a blockbuster, habit-forming function that would compel users to return throughout the day, said Alfonso Fuggetta, a professor at Milan’s Politecnico and an expert in digital innovation.
“The key issue is still the function,” Fuggetta said. “I’m not saying there isn’t one — but it’s not yet clear what recurring, mass-market problem they solve.”
–With assistance from Kurt Wagner, Antonio Vanuzzo and Flavia Rotondi.
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