Pioneering Wearable Tech Company Poised to ‘Beat the Odds’ and Conquer an Emerging Market
Before there was Google Glass… before there was Microsoft HoloLens… before Ray-Ban Meta…
One company led the charge to make “smart glasses” a reality…
Producing the first production model see-through augmented reality (AR) glasses nearly fifteen years ago.
And that company is still leading the pack forward, one innovation after the next, as it claims its share of a market that’s forecasted to grow at a compound annual growth rate (CAGR) of 27.1% from 2023 to 2030, ultimately reaching hundreds of billions of dollars.
Founded in 1997, Vuzix Corporation (NASDAQ: VUZI) over the years has subcontracted for Raytheon, contracted with DARPA, received a $25 million investment from Intel, and partnered with BlackBerry.
Today, it boasts substantial investments from Cathy Wood’s Ark Investment, Blackrock, Vanguard, Citadel, and Morgan Stanley.
The company is pioneering a future where the power of artificial intelligence isn’t stuck on a computer or a smartphone screen, but is right before a user’s eyes.
The limitations of smart glasses are well known: They look creepy, have fashion backward designs, short battery life, and so on.
One by one, Vuzix has knocked down these objections, to the point that today, their latest models are nearly indistinguishable from popular styles from Ray-Ban and Oakley…
Their batteries are so power-efficient, they can run for two days on a single charge…
And they incorporate brand-new “Incognito” technology that virtually eliminates the forward-facing content and “eye glow” that have been an unfortunate side effect of smart glasses to date.
The company’s stock (ticker: VUZI) has proven capable of some incredible moves over the years…
Like its more than 2,300% rocket-ride in 12 months during the pandemic…
Its 60% jump in just three weeks in November 2021…
And its 150% climb in three months in the summer of 2022…
Then last year, VUZI had two ramp ups of 60% or better, each unfolding in a matter of weeks.
April 2024 began with the stock on a new warpath, surging more than 40% in just one week.
The stock has been volatile since then, but investors are clearly eager to hop on its next wave.
And as we’ll see, any number of catalysts could set that off…
But first, what does Vuzix do?
The company describes itself as “a leading designer, manufacturer and marketer of Smart Glasses and Augmented Reality (AR) technologies and products for the enterprise, medical, defense and consumer markets.”
AR is a technology that overlays digital information, such as text, images, or videos, onto the real-world environment.
It differs from Virtual Reality (VR), which immerses users in a completely virtual environment, typically through a head-mounted display that covers the entire field of view.
We’ve all seen the bulky goggles from Meta or Apple’s Vision Pro. By contrast, Vuzix produces subtle, lightweight glasses that can be worn comfortably all day long, and that don’t make the user look like a robot.
The secret is a thin optic called a “waveguide” that’s fully transparent but that guides light waves along specific paths, directing them towards the user’s eye as an overlay on the real-world scene.
Using a WiFi or Bluetooth connection, Vuzix’s waveguide-equipped glasses can pair with a cell phone…
The resulting technology has potentially endless use cases, but some the company has cited are:
- Warehouse/logistics: Some models — such as the Vuzix Shield — are more robust and intended for industrial applications. While maintaining safety and eye protection, they include cameras, speakers, and noise-canceling microphones.
This makes them perfect for picking orders, packing pallets, or streaming see-what-I-see video for remote assistance.
- Healthcare: This article describes how Vuzix Blade glasses assisted surgeons with guidance during a total shoulder replacement.
One surgeon, Dr. John-Erik Bell said that “The intraoperative guidance allowed me to perform more accurate implant positioning, while the Augmented Reality let me stay focused on the surgical field throughout the case.”
His partner, Dr. Matthias Zumstein, concluded that “this is truly a great innovation.”
- Manufacturing: An article from February describes the use of Vuzix glasses in automotive manufacturing and assembly lines as “a leap forward in industrial efficiency and precision.”
The AR glasses allow manufacturers to “overlay digital instructions and guidelines directly onto the workers’ field of view.”
As the article explains:
“This not only speeds up the assembly process by providing hands-free access to critical information but also significantly reduces the margin for error. The AR technology in Vuzix glasses can highlight specific assembly points, display step-by-step instructions, and even signal warnings when a potential mistake is detected.”
- Field service: This video explains how technicians in the field can use Vuzix glasses to connect with remote specialists who can provide real-time guidance:
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- Accessibility: In December, Forbes explained in an article how the hearing-impaired could pair Vuzix glasses with speech-to-text software to generate a kind of real-life closed captioning.
From the article:
“[Vuzix CEO Paul Travers] shared an anecdote about a veteran in New Jersey who has severe hearing loss and was isolated from socialization until trying Vuzix’s glasses with Xander’s software. All of a sudden, Travers told me, the guy was ecstatic and said it was the first time in over a year he actually had real conversations with people.”
- Language translation: By now, many people are aware that smartphones can help people cross language barriers by translating the spoken word in real time.
The trouble, of course, is listeners have to stare at their phones to read the translations.
At the 2024 Consumer Electronics Show, Vuzix bigwigs showcased their glasses’ ability to show translated text almost instantly and without impeding the view of the speaker’s face.
It’s easy to imagine Vuzix glasses eliminating the need for in-person translators, revolutionizing meetings between business and political leaders — or even just tourists — entirely.
Again, these are just a handful of the limitless possibilities Vuzix AR glasses enable…
But perhaps the best Vuzix feature was highlighted by the author of the Forbes article mentioned above:
“Vuzix builds the glasses and has an app store, but like their bigger brethren in Apple and Google, rely upon third parties to boost the value proposition of its product. In the same way it could be legitimately argued the App Store is the iPhone’s killer app because of all the possibilities it affords, Vuzix’s own storefront does the same thing for its connected eyewear.”
A web version of the Vuzix app store is available here and includes categories ranging from productivity to sports and even weather.
Beyond that, the Vuzix glasses themselves have an app that’s available on Apple and Android that allows users to easily configure settings, manage notifications, remotely control apps, and more.
Vuzix began in 1997 developing products primarily for the military, including display electronics for night vision weapons sights.
By the early 2000s, it started producing devices for enterprise customers including heavyweights such as Toshiba.
It wasn’t until the debut of the Vuzix Blade AR glasses in 2019 — with their connectivity to Amazon’s Alexa and Google Assistant — that the company began marketing directly to consumers.
Vuzix’s revenue then began multiplying, and by 2020, it was receiving steady OEM orders from medical and defense customers.
As of a profile in 2022, “the main consumers of Vuzix smart glasses and AR products [were] at the enterprise, industrial and commercial levels.”
To date, AR glasses have yet to achieve a mass market appeal, but that is quickly changing…
With the advent of technologies such as Vuzix’s Incognito, dramatic improvements to device appearances and battery life, and the meteoric rise of AI, smart glasses could be on the precipice of mainstream adoption…
And perhaps of taking the place of smartphones altogether.
As the Forbes writer put it, “Given enough time, something assuredly will supplant the smartphone someday… and it’s not a bad bet to believe wearables, AI, and AR will band together to lead the revolution towards a new regime.”
As the widely acknowledged “first mover” in the AR/smart glasses space, Vuzix has the advantage of holding 346 patents and pending patents on critical components.
According to Seeking Alpha, its intellectual property portfolio includes “micro-display projection engines, waveguides, mechanical packaging, ergonomics and optical systems.”
And given its willingness to supply components on an OEM basis — including its complete “Ultralite” platform — it’s reasonable to assume that Vuzix will profit substantially from the “revolution” once it does take off…
Surely, that’s what Cathy Wood and other hedge fund titans are betting on.
For now, though, Vuzix’s revenues are significant but have yet to explode, and its Q3 2023 figures led to a pullback in the stock price.
On the Q3 earnings call on November 9, CEO Paul Travers chalked up the quarter’s comparatively soft earnings to a number of large delayed orders and several defense R&D projects that he expected to go into production imminently.
He added that the company has “the largest pipeline of smart glasses sales opportunities in the company’s history.”
And indeed, the company’s steady stream of great news in the wake of that call has borne that out, culminating in the stock’s 40% jump in April.
Some highlights:
- November 15: Vuzix announced a partnership agreement with Taiwan-based Quanta Computer, a Global Fortune 500 Company with revenues of $43 billion USD in 2022 that boasts more than 65,000 employees worldwide.
Vuzix is Quanta with waveguides and components to create “a suite of groundbreaking AR smart glasses products during 2024.”
“We are excited to join forces with Vuzix to revolutionize the AR smart glasses industry,” said C.C. Leung, Vice Chairman and President of Quanta Computer.
- November 16: The company debuted the Vuzix Ultralite S, sport and fitness-focused smart glasses that won CES 2024 Innovation Awards in the Wearable Technologies and Sports & Fitness categories.
The fashionable, lightweight glasses connect with smartphones or smartwatches to display “directions, messaging, health and fitness information, and even workplace data.”
- December 6: Vuzix completed delivery of custom waveguides and light engines to a “leading US-based defense contractor” for the final stage of a development program.
“We have been working closely with this defense contractor over the past 18 months to design, produce and deliver a solution that can be integrated into many head worn products,” said CEO Paul Travers. “We look forward to future opportunities from this work and ultimately potential volume deliveries.”
- January 9: Debuted the Z100 smart glasses as a developer’s edition. These glasses provide workers “a human-centered connection to AI and work process applications, receiving critical updates, convenient workflow and task confirmations, and notifications in real time.”
Said Paul Travers: “The Z100 takes enterprise use of AR smart glasses to the next level, providing workers with a hands-free wearable that is indistinguishable from a pair a standard glasses.”
Vuzix Z100 smart glasses
- January 17: Vuzix announced a refocus of its business priorities to include an “expansive cost reduction program” Paul Travers said the company had “identified opportunities to reduce or discontinue investments in certain areas while maintaining our investment and focus on initiatives that should deliver the most impact long-term.”
The company also released preliminary Q4 2023 revenues that included a 36% increase in total product sales over Q3, lending credence to what he said on the Q3 earnings call.
- January 29: The company revealed that NTT QONOQ, “Japan’s leading company in the telecommunications business, now supports the use of its NTT XR Real Support solution on Vuzix M400™ smart glasses.” That solution is useful for the infrastructure and manufacturing industries.
Paul Travers commented: “We look forward to working with [NTT QONOQ] to bring Vuzix smart glasses to a wide range of their customers.”
- March 6: Vuzix announced that its wholly-owned subsidiary, Moviynt, would be showcasing AI and machine learning on Vuzix AR smart glasses at Modex 2024, “the premier supply chain experience trade show.”
- April 2: Vuzix entered into a reseller agreement with UK-based Purview Services. Vuzix said it had “received and shipped against a large volume purchase order from Purview, who will distribute Vuzix products to its customers across EMEA and India.”
- April 4: The company received “additional orders” from two aerospace and defense firms “to further develop and deliver waveguide-based display solutions in 2024.”
One of the customers, “a leader in technologically advanced and intelligent solutions for the global aerospace and defense industry,” was previously supplied by a China-based company, but switched to Vuzix in part because it manufactures its waveguide and display technologies in the US.
Arguably, these last two announcements were what precipitated the 40% runup in VUZI the first week of April, as they point to significant sources of revenue…
The company is clearly on the move.
In late February, InvestorPlace columnist Josh Enomoto included VUZI as one of his “3 Companies Ready to Beat the Odds,” reasoning that “fundamentally, as a technology enterprise focused on wearable virtual reality and augment reality display innovations, the company stands on fertile ground.”
He noted that “analysts forecast shares to hit $3.50, implying nearly 119% upside potential. If so, that would easily make VUZI one of the stocks to buy.”
Vuzix only just opened its state-of-the-art manufacturing plant for waveguides in September, with the ribbon cutting in December.
As the company’s chief operating officer, Pete Jameson, noted in this interview, the 12,000 square foot facility in Rochester, New York, can produce as many as one million waveguides per year in its current configuration, and there is additional room for expansion.
Going forward, a massive potential catalyst for Vuzix stems from its agreements with France-based Atomistic, a nex-gen micro light emitting diode (mLED) display solutions business.
According to the May 2022 announcement, “These agreements provide for an exclusive license of key mLED technology, the design of a custom backplane and, dependent upon achievement of various technical stages, the ability to acquire the enterprise.”
If the companies succeed, the result would be “one of the smallest form factors with the highest performance and lowest power solutions on the market, and could provide a cornerstone piece of technology focused on the AR markets that are expected to demand hundreds of millions of units annually.”
It would truly put Vuzix at the cutting edge of mLED display technology. You can find out more on Atomistic’s webpage here.
As stated, VUZI has already proven capable of incredible moves…
A 60% gain in three weeks… 150% in three months… even an incredible 2,300% in 12 months…
And just in April, it shot up 40% in a single week.
It holds 346 patents in an industry projected to grow to the hundreds of billions by 2030…
With some even forecasting that it could supplant the smartphone.
As Vuzix says,
“The world is changing, as is the way we look at it. Smart glasses let us surround ourselves in a digital world, while still staying connected to the physical. Layered displays let us navigate the world freely but with an extra element of engagement. Smart glasses push us beyond the ever-evolving curve of digital transformation.”
Is Vuzix the future? With the right glasses, we might just be able to see.
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