Chinese augmented reality (AR) firm Xreal on Tuesday launched its next-generation glasses, as interest continues to rise in the technology that many tech giants like Apple and Meta see as the next big consumer product after the smartphone.
The Xreal Air 2 and Xreal Air 2 Pro are lightweight glasses, rather than bulky headsets, as the company bets on this kind of device appealing to a wider array of consumers looking for an easy-to-wear product.
“The Air 2 was designed primarily with a focus on improving the comfort while people are using it,” Peng Jin, co-founder of Xreal, told CNBC in an interview on Tuesday.
AR refers to technology where digital experiences are imposed over the real world. Xreal glasses allow users to have large-screen experiences of apps, such as streaming services or gaming. Xreal’s AR glasses can connect to smartphones, game consoles and other devices, allowing a user to open an app and see what they’re viewing on a virtual screen up to 330-inches.
Xreal is launching the glasses in the U.S., U.K. and in some markets in Europe. The Xreal Air 2 starts at $399 while the Pro versions starts at $449. The gear will be available for order in November.
The company said it has managed to use smaller displays inside the device, resulting in AR glasses that are 10% lighter than the previous generation. Xreal also said it has improved the headset speakers to prevent as much sound from escaping.
The first generation of the Xreal Air was released last year.
Tech giants bet on augmented reality
The market for augmented and virtual reality headsets is in its infancy with just 8.5 million headsets expected to be shipped this year, as the market faces a lull due to a drop in consumer spending led by the tough global economic environment, according to International Data Corporation.
The market is seen rebounding in 2024 and growing 46.8% year-on-year, IDC said, likely thanks to the expected introduction of new hardware.
The highly-anticipated Apple Vision Pro will launch next year, alongside new hardware from Facebook-parent Meta — the biggest AR and VR headset maker by market share.
These technology giants see headsets as the potential next big platform for computing. Meta CEO Mark Zuckerberg has staked a large part of the company’s future betting these technologies take off.
Discussing competition in the market, Xreal suggested Apple is marketing the Vision Pro to existing users of Apple products and trying to bring the Apple services from the iPhone or Mac to mixed reality — another term that refers to the combination of virtual and augmented reality.
Jin said that Meta is meanwhile trying to bring its social network to virtual reality, which “has proven to be extremely challenging.” He pointed to technological challenges and Meta’s struggles with commercializing its VR apps.
Jin said Xreal’s strength is in its lack of legacy, suggesting that Apple would not make a headset that necessarily connects to rival systems and that Meta’s headsets would likely be linked to the company’s social networks.
“For us, we have that flexibility. We have that freedom of not having to work with any existing legacy … so we are cross platform, we don’t mind starting at a very basic experience, and letting people learn about us, accept us into their everyday life, so we can grow from there,” Jin said.
He added that, ultimately, when big companies are involved in a technology, “it’s always good for everybody,” by bringing in more capital, talent and business opportunities.
Xreal aims for fast growth
Still, Xreal is a small player in the market, commanding just a 2% market share, according to IDC — behind giants Meta, Sony with its PlayStation VR and TikTok parent ByteDance.
The company has now sold 250,000 headsets in its lifetime, up from a previously disclosed figure of 150,000 in May.
Jin said the goal is to hit 1 million unit sales annually, which he said he hopes can happen in the next two-to-three years time.
Xreal numbers some big investors, including Chinese e-commerce giant Alibaba and electric vehicle firm Nio. Jin said Xreal has been “talking with investors very actively” about raising more money and is in “deep discussions” with some investment firms. He declined to provide further details.