Facebook to launch Ray-Ban AR smart glasses as profits surpass Wall Street expectations

The social media firm has continued to benefit from a surge of users and advertising amid pandemic

Social networking giant Facebook announced on Wednesday that its next hardware launch will be a pair of smart glasses which are being developed in partnership with Ray-Ban owner Essilor Luxottica group.

During the company's Q2 2021 earnings call, Facebook CEO Mark Zuckerberg said that the glasses will have the "iconic form factor" of Ray-Ban and will enable users to "do some pretty neat things".

Zuckerberg didn't elaborate on these "neat" features, but said he was "excited to get these into people's hands and to continue to make progress on the journey towards full augmented reality glasses in the future".

Zuckerberg also did not expand on the technical specifications of the smart glasses or the timeline for when they will be launched.

Facebook smart glasses have been rumoured to be under development for quite a while now. Last year, a report from The Verge claimed the rumoured glasses would not have an integrated display.

It was also claimed that engineers from the 'Project Aria' team were experimenting with eyewear.

In his keynote speech, Zuckerberg also spoke about creating a virtual 'metaverse' - a set of augmented and virtual reality (VR) technologies that would let users interact in 3D virtual worlds on the internet.

"So what is the metaverse? It's a virtual environment [like] an embodied Internet that you're inside of rather than just looking at. And we believe that this is going to be the successor to the mobile internet," Zuckerberg said.

He described metaverse as the next chapter of the internet, which would require significant investment not only from Facebook but also from its entire ecosystem of partners.

"In the coming years, I expect people will transition from seeing us primarily as a social media company to seeing us as a metaverse company," Zuckerberg said.

In the conference call on Wednesday, Zuckerberg also announced that Facebook had doubled its profit in the second quarter of 2021 (which ended 30 June), thanks to a spike in advertising revenue.

The company's profit for the quarter was about $10.4 billion, much higher than Wall Street estimates of $8.7 billion.

Facebook's said its total revenue for the three-month period was nearly $29.1 billion, up 56 per cent from the same period a year ago.

"Advertising revenue growth in the second quarter of 2021 was driven by a 47 per cent year-over-year increase in the average price per ad and a 6 per cent increase in the number of ads delivered," it added.

However, the company expects "year-over-year total revenue growth rates to decelerate significantly" on a sequential basis in the third and fourth quarters of 2021.

CFO David Wehner said that the sales growth could slow due to "regulatory and platform changes," pointing to Apple's recent iOS app tracking rules.

In April, Apple started rolling out iOS 14.5 and iPadOS 14.5 update, enabling users to use the App Tracking Transparency function that "requires apps to get the user's permission before tracking their data across apps or websites owned by other companies for advertising, or sharing their data with data brokers."

Facebook, which earns most of its revenue from advertising, has pushed back against the changes, arguing that such changes would be devastating to small businesses that rely on targeted ads and that they would curb the ability of businesses to reach their customers effectively.

These changes are likely to have a greater impact on Facebook's business in the coming months.