The Zhitong Finance App learned that Minsheng Securities released a research report saying that according to the 36Kr report, Xiaomi is expected to release AI glasses in 25Q2 to fully target the Meta Ray-Ban, equipped with AI functions and an audio headset/camera module. According to Wellsen XR Research, Samsung is expected to release its first AI smart glasses in 25Q3, equipped with AR1, supporting the Gemini model, and initially planning to produce 0.5 million units. AI empowers the rise of smart terminals. Comparing the evolution of the smart phone industry, I am optimistic about the future market pattern where two lines are parallel. That is, brand manufacturers develop their own hardware+large models; white brand manufacturers use public solutions to cooperate with third-party models, and each occupies the target market.

The main views of Minsheng Securities are as follows:

At the beginning of the wave of overseas AI applications, how were AI terminals different: US stock technology was significantly divided in the early stages, and the trend of software and hardware switching was more obvious

Minsheng Securities believes that the B-side business scenario is relatively simple, the training data set is simpler, and the scene on similar tracks is replicable. Therefore, US stock AI applications are ToB first, while A-share AI terminals focus on ToC. Among them are excellent examples of Ray-Ban & Meta glasses. Their built-in camera can shoot, recognize, and translate, and interact with users by voice, and sales of second-generation products equipped with the Llama model grew rapidly; there are also products with a bland user experience, such as the Ola Douban Headphones, which have sold only 3000+ in the Cat flagship store until today, which can only achieve basic conversations, cannot call system functions, and support third-party apps. The final product sales volume depends on the actual user experience, and whether AI terminals are deeply involved in application scenarios to solve the immediate needs of users. Not all terminals can be popular as long as they have an AI name and are equipped with AI features.

What to look forward to: Sorting out the pace of new AI eyewear product releases. Recently, there are quite a few new products worth looking forward to

It can be divided into two categories: AR brands and mobile phone manufacturers: AR brands: On November 18, Rokid released a new product. In addition to common AI functions such as photography and recognition, it also collaborated with Alipay to achieve camera scanning and natural language payment functions. On November 29th, Film released two AI+AR smart glasses: INMO AIR3 and INMO GO2. Mobile phone factory: According to a 36Krypton report, Xiaomi is expected to release AI glasses in 25Q2 to fully target Meta Ray-Ban, equipped with AI functions and an audio headset/camera module. According to Wellsen XR Research, Samsung is expected to release its first AI smart glasses in 25Q3, equipped with AR1, supporting the Gemini model, and initially planning to produce 0.5 million units.

SoC is the hardware core that affects the AI terminal experience: 2C scenario side, “universal adaptation+cost performance” is the main logic

2C's AI terminal hardware will not be used as a computing power terminal; it only needs to meet some targeted end-side requirements, so SoC solutions need to mainly solve core problems such as low power consumption, connectivity, and chip processing capabilities. Take AI glasses as an example. Currently, there are three mainstream SOC solutions: Qualcomm XR and AR series chips; watch solution porting; and SOC+ external ISP solutions. On the 2B scenario side, computational reasoning ability is king, and multi-core heterogeneity (CPU+GPU+NPU) will become the mainstream solution.

How do you see the future of AI terminals:

Increased value: Compared with earlier consumer electronics innovations, such as TWS headsets, AI terminals are system-level products and need to be adapted to many applications+large AI models+diverse interaction methods. The upgrading and evolution of the product form is a gradual iterative process. However, the advantage is that once the user experience is mature and brings convenience to solve immediate needs, users are more willing to pay. The pricing of AI terminals = hardware cost+AI experience. It has higher added value and can open up the profit ceiling for brand manufacturers.

Interactive experience: Today's AI terminal products, from early smart phones and Honor phones to recent Rokid glasses, all focus on voice interaction to free hands. In the future, they will also combine functions such as gesture recognition to further revolutionize the interactive experience. Minsheng Securities believes that in the future, the positioning of mobile phones will shift to portable computing power terminals, and the interaction process can be implemented more through AI hardware. Namely: ① “What you see is what you get” through an AI glasses camera; ② “what you say is what you do” through a microphone.

Industrial chain ecology: Minsheng Securities believes that current AI terminals can be compared to smart phones ten years ago. Between 2012 and 2015, the implementation of 4G communication spawned new demand such as mobile Internet. The “China Cool Federation”, one of the top four traditional domestic smart phones, was challenged by new “players” such as OPPO, Vivo, and Xiaomi, and the industry was reshuffled at an accelerated pace. Then, with the exit of manufacturers such as Nokia, LeTV, and Gionee, the industry pattern stabilized. Currently, AI is empowering the acceleration of the rise of smart terminals. Comparing the evolution of the smart phone industry, I am optimistic about the future market pattern where two lines are parallel. That is, brand manufacturers develop their own hardware+large models; white brand manufacturers use public solutions to cooperate with third-party models, and each occupies the target market.

Investment advice: The rise of AI models has once again set off a new wave of smart terminals. Not only are Ray-Ban & Meta phenomenal products, but many hardware manufacturers such as Samsung, Xiaomi, and Apple are also looking for opportunities. These new product launches are intensive catalysts, and will continue to be watched.

Specific to the target, it is recommended to pay attention to:

1) Brands: Xiaomi Group (01810), Rambler (002351.SZ), Guoguang (002045.SZ), Yidao Information (001314.SZ), etc.; 2) OEM: Goertek (002241.SZ), Tianjian (301383.SZ); 3) SOC: Hengxuan Technology (688608.SH), Ruixin (603893.SH), Jingchen (); 4) Optics: Shunyu Optics (02382), crystal 688099.SH 688018.SH Optoelectronics (002273.SZ), Lante Optics (688127.SH), Utomi Optics (300790.SZ); 5) Acoustics: Minxin Co., Ltd. (688286.SH), Gongda Electroacoustics (002655.SZ); 6) Glasses: Doctor Glasses (300622.SZ).

Risk warning: AR optical solutions fall short of expectations, innovation falls short of expectations, sales fall short of expectations, and exchange rate fluctuations.