Summary of the News
AI glasses, which have been a major trend for most of the year, experienced a significant drop in sales data in July 2026: sales across all channels increased by 85% year-over-year in the first half of the year, with nearly doubling in revenue. However, in July, online sales dropped by 15.3% year-over-year, and revenue decreased by 25.8%, suggesting a sudden decline in demand. Upon closer analysis, this does not represent a collapse of the entire industry. Half of the decline can be attributed to the normal post-618 promotional activity, while the other half reveals underlying issues within the industry: relying on basic features and price wars is insufficient to sustain demand. The market has rapidly shifted from a phase of hype and conceptual promotion to one of differentiation, focusing on the real value provided to users.
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Detailed Analysis
1. Don’t rush to conclude that sales in July indicate a failure; half of the decline is due to the post-618 promotional period
The drop in sales in July is not entirely unusual. In the first half of the year, manufacturers released new products, the government provided subsidies of up to 500 yuan for the purchase of smart glasses, and there were widespread discounts during the 618 promotional event, prompting many users to make their purchases in June—June was already the best-selling month for AI glasses in the past 13 months. It’s quite normal that sales slowed down in July after such a promotional surge.
Additionally, July last year had already seen peak sales, so a 20% decrease month-over-month is in line with the typical patterns of the consumer electronics industry. For example, if you just bought a new phone during 618, you’re less likely to purchase another one in July. Therefore, a single month’s fluctuation should not be used to conclude that the entire industry is in decline.
2. The real warning: Even with 50% price discounts, sales are not increasing; low prices are not expanding the market
What’s more concerning is the significant difference between the decline in sales (20.9%) and revenue (43%). This indicates that although AI glasses are becoming cheaper, it’s not attracting more buyers. A typical example is the “video-taking glasses” that can also be used for listening to music on phones; their average price dropped from nearly 2000 yuan last year to 800 yuan, with some low-quality products selling 13,000 units in a single month, yet sales for this entire category still decreased by 46% year-over-year. In other words, the functions that these glasses offer (video recording, music listening, etc.) can be easily performed with a phone. The lower price only attracts a small group of early adopters and does not create a strong desire among consumers to buy additional units.
3. Counterintuitive data: Low-priced glasses (800 yuan) fail to sell, while high-priced glasses (3000 yuan) see a 70% increase; the AI glasses market has diverged into three distinct paths
A striking contrast in July was observed: sales of ordinary video-taking glasses with an average price of 819 yuan plummeted by 46%, while sales of smart glasses with AR display functions (average price around 3000 yuan) increased by 72% year-over-year. This division of the market into three distinct categories highlights the following trends:
- Phone accessory type: These are the most common glasses, which are essentially Bluetooth headphones with a camera that require a phone to function. They rely on the phone for all their features and can only compete on price, resulting in thin margins.
- Vertical tool type: These glasses are designed for specific use cases, such as providing real-time subtitles for streamers, navigation for delivery riders, or translation for international travelers. They address specific needs but have a limited audience and cannot become widely popular, thus generating only small profits.
- New entry type: These high-priced (3000 yuan) AR display glasses present information directly in the user’s field of vision, eliminating the need to use a phone. They offer unique experiences that phones cannot match and represent the direction in which major companies are investing for the long term.
4. The novelty phase has ended; manufacturers that relied on AI hype to profit will struggle to survive
The sales of over 900,000 units in the first half of the year have largely attracted the initial group of users willing to try out the “AI concept.” The data from July reveals a reality for the industry: the approach of simply using a standard model, adding a camera and a voice assistant, and calling it an AI glass is no longer effective. The market will no longer see widespread spikes in sales across all categories. Small brands that relied on low prices will struggle to make a profit, and leading brands cannot rely on marketing gimmicks to sell products. They must either focus on niche markets or develop innovative technologies that truly differentiate their products from phones. Otherwise, they will be quickly eliminated by consumers who are more discerning about their purchases.