Innovative Eyewear shares rocketed higher last week after the smart eyewear company announced the launch of their ChatGPT-enabled app.
The company’s shares tripled on the day of the announcement as investors positioned for the potential rewards for securing first-mover advantage in a technology that could be the most significant development in personal devices since the introduction of the mobile phone.
The ability to interact with AI platforms such as ChatGPT through wearable devices was once something only seen in movies – Innovative Eyewear has made it a reality.
However, the market opportunity for AI-enabled wearables is difficult to gauge as it simply hasn’t existed until recently.
Lucyd has previously identified the rise of the smartwatch as a guide to their smart eyewear opportunity. A recent study has predicted the smartwatch industry will be worth $44.91bn in 2023 and will grow to $61.69bn by 2027.
Indeed, another study has forecast the smart eyewear market could be worth $33bn by 2027. This was, however, before the launch of Innovative Eyewear’s ChatGPT-enabled smart eyewear technology.
In their most recent investor presentation, Lucyd highlighted a total addressable US market of over 160 million prescription glasses wearers, and over 220 million non-Rx sunglass wearers in the US alone. There are thought to be 4 billion eyewear users worldwide.
Innovative Eyewear hasn’t provided a target for its future market share. However, Apple’s 34% market-leading share of the smartwatch market in 2022 can act as an indication of a dominant player’s penetration.
Working on the assumption Innovative Eyewear’s first mover advantage can help them achieve similar penetration to Apple in the smartwatch market by 2027, this could translate to roughly $10bn in sales.
In their annual report, Innovative Eyewear said they expected retail gross margins would be 40%. This would equate to a potential $6bn gross profit, should the above assumptions come to pass.
The technology is new and we lack any meaningful insight into Lucyd’s sales so these assumptions must be treated with caution, and as a rough indication only.