Meta Platforms is reportedly in discussions to acquire a 5% stake in EssilorLuxottica, the world’s largest eyewear manufacturer and the production partner for Meta’s Ray-Ban smart glasses. This move, first reported by the Wall Street Journal, could significantly impact the development and market presence of smart glasses at a time when major tech companies are heavily investing in augmented and mixed-reality technologies.
Deal Overview
According to sources familiar with the matter, Meta’s potential acquisition of a 5% stake in EssilorLuxottica could be valued at approximately €4.33 billion ($4.73 billion), based on EssilorLuxottica’s latest market capitalization of €86.50 billion. This investment would not only deepen Meta’s involvement in the smart glasses sector but also provide greater influence over the future direction and innovation of the product line.
Enhancing Control Over Product Development
Securing a significant stake in EssilorLuxottica would give Meta a stronger hand in steering the development of its Ray-Ban smart glasses. This partnership is crucial for Meta as it competes with other tech giants, including Apple, which are also developing advanced augmented-reality (AR) and mixed-reality (MR) devices. By increasing its stake, Meta aims to ensure that the technological advancements and design iterations of the smart glasses align closely with its strategic goals and consumer expectations.
With AR and MR technologies becoming increasingly central to the future of consumer electronics, Meta’s investment in EssilorLuxottica is a strategic move to stay competitive. These technologies promise to revolutionize the way users interact with digital content, blending the physical and digital worlds in seamless ways. The success of these technologies relies heavily on high-quality, stylish, and functional wearable devices, areas where EssilorLuxottica excels.
Following the news of the potential deal, EssilorLuxottica’s shares surged by 6%, reflecting investor optimism about the strategic partnership’s potential benefits. Meta’s stock also saw a 2.3% increase shortly after the announcement. The market’s positive reaction underscores the confidence in the synergies that this partnership could unlock.
EssilorLuxottica, formed in 2018 through the merger of France’s Essilor and Italy’s Luxottica, is a dominant force in the eyewear market. The largest stakeholder in the company is Delfin, a holding company controlled by the family of Luxottica’s late founder, Leonardo Del Vecchio, holding nearly 33% of the shares.
Product Impact: Ray-Ban Meta Smart Glasses
Current Performance and Sales
The Ray-Ban Meta smart glasses, first launched in 2021, have become a pivotal product in Meta’s consumer technology lineup. Recently, EssilorLuxottica CEO Francesco Milleri revealed that the latest generation of these smart glasses, launched in October 2023, has already outsold the previous version within a few months, indicating strong consumer interest and market traction.
The latest iteration of the Ray-Ban Meta smart glasses comes equipped with advanced features, including a built-in Meta AI assistant and the ability to livestream a user’s perspective directly to social media platforms like Facebook and Instagram. Analysts have been optimistic about these enhancements, suggesting that the glasses are close to achieving a mainstream market fit. Bernstein analysts recently noted that the product might be just a generation or two away from widespread adoption.
Looking ahead, a third generation of Ray-Ban Meta smart glasses is anticipated to be ready by the 2025 holiday shopping season. This upcoming version is expected to further integrate cutting-edge technologies and improve user experience, potentially solidifying Meta’s position in the smart glasses market.
The partnership between Meta and EssilorLuxottica highlights the growing convergence between technology and fashion. As tech companies push the boundaries of wearable technology, collaborations with established fashion brands and eyewear manufacturers become crucial. These partnerships ensure that the products are not only technologically advanced but also stylish and appealing to consumers.
Meta’s potential investment in EssilorLuxottica is likely to influence strategies across the tech industry. Competitors may seek similar partnerships or accelerate their development efforts in AR and MR technologies to keep pace. The move also signals to the market the importance of integrating hardware capabilities with advanced software and AI features to create compelling consumer products.
Meta’s potential acquisition of a 5% stake in EssilorLuxottica represents a strategic effort to enhance its influence over the development of smart glasses and stay competitive in the rapidly evolving AR and MR markets. With positive market reactions and promising sales figures for the latest Ray-Ban Meta smart glasses, this partnership could mark a significant milestone in the integration of technology and fashion, setting the stage for the next generation of wearable devices.
