Xreal, a lower-priced rival, claims almost 200k shipments
Xreal, a startup in the augmented reality glasses market backed by Alibaba, has boldly asserted that its shipments will approach 200,000 units in a relatively short period. With the ability to overlay digital images onto the physical world, augmented reality (AR) technology is at the core of their products. Xreal achieved the impressive milestone of shipping 100,000 units globally within just four months of their large-scale release in late August 2022, according to co-founder Peng Jin, who spoke with CNBC during the Shanghai MWC event.
Without providing a specific timeline, Xreal’s co-founder, Peng Jin, confidently mentioned during an interview at the Shanghai MWC event that it won’t take long to reach the milestone of 200,000 units. He urged listeners to calculate the duration themselves, implying that the company’s current pace and market demand will contribute to swiftly achieving their target. However, Peng Jin should have disclosed a precise date or timeline for reaching the projected shipment volume.
The current status of Xreal’s sales pace remains to be seen, as no clear information is available regarding any potential changes. In late May, Xreal announced that it had successfully sold 150,000 products on a global scale. However, further updates or details make it easier to determine if the sales rate has since altered.
According to Jin, the co-founder of Xreal, the current growth rate of 200% to 300% is considered the norm and may not hold significant meaning. However, he expressed his satisfaction and encouragement regarding the growing acceptance of their new form factor and the unique experience it offers among consumers.
Xreal’s Air glasses are priced at $379, approximately one-tenth of the expected price of Apple’s Vision Pro headset. Apple plans to launch its Vision Pro headset next year with a price tag of $3,500. This significant difference in price positions Xreal’s offering as a much more affordable alternative in the market.
While the technology and capabilities of Xreal’s Air glasses and Apple’s Vision Pro headset differ, both products share a common objective of emulating the experience of a physical screen through a virtual, large-scale display. This type of digital replication falls within the realm of spatial computing.
Jin, the co-founder of Xreal, envisions spatial computing as a significant technological trend that will dominate the next two to three decades. According to him, the key to success lies not necessarily in creating an abundance of original content to captivate users and make them abandon their current activities but rather in leveraging the existing content. From Xreal’s perspective, the content required to enhance the user experience is already available and can be integrated effectively into their spatial computing platform.
According to sources cited by the Financial Times, there is a discrepancy between Apple’s internal sales target and the projections of suppliers for the first year of the Vision Pro headset. The suppliers reportedly anticipate shipping only a few hundred thousand units, which falls significantly short of Apple’s target of 1 million units. The report suggests that the headset’s complexity and production difficulties contribute to the lowered forecast. Apple has not commented.
In 2022, worldwide shipments of virtual reality (VR) headsets and augmented reality (AR) devices experienced a decline of over 12%, totalling 9.6 million units, as reported by CCS Insight. This indicates a potential decrease in demand for such devices in the market.
In June, Meta (formerly known as Facebook) unveiled its latest virtual reality headset, the Quest 3, priced at $499. Further details about the product were promised to be revealed in September, indicating that Meta continues to focus on the VR headset market and seeks to capture consumer interest with their new offering.
In a recent announcement, analytics firm Canalys projected that the user base for Apple’s Vision Pro and its associated devices would reach 20 million users within five years of its planned launch in 2024. Nicole Peng, the Senior Vice President of Mobility at Canalys, emphasized that for Vision Pro to achieve success, it needs to position itself as a replacement for personal computers. This unique value proposition sets it apart from the offerings of Xreal (formerly known as Nreal) or Meta(formerly known as Facebook), which focus on different aspects of the augmented and virtual reality markets.
It is worth noting that Xreal underwent a rebranding process in late May, changing its name from Nreal better to reflect its vision and objectives in the market.
According to Nicole Peng from Canalys, the glasses offered by Xreal (formerly Nreal) still require a PC or smartphone connection. This means that users typically need a wired connection to either of these devices while using the glasses.
Xreal’s current flagship product, the Xreal Air, allows users to view an enlarged version of computer screens, gaming devices, or smartphone displays through a wired connection. However, Xreal is introducing a new accessory, the Xreal Beam, priced at $109. This accessory will enable wireless connectivity between Xreal Air headsets and devices. Deliveries for the Xreal Beam are expected to commence in the second half of July, as the official website mentions.
According to Xreal co-founder Jin, there has been significant interest in the Xreal Beam, with people from 85 countries signing up for notifications. The company primarily sells its products in the United States, Japan, and South Korea, with China accounting for less than one-third of its sales.
Xreal has revealed its plans to broaden its online shipping services to select regions of Europe starting in August, as stated by Jin during an interview with CNBC. Presently, customers in those European regions have limited options and can only purchase Xreal products via international shipping through Amazon.com in the United States. The expansion aims to provide easier access and more convenient shipping options for European customers, further expanding Xreal’s market reach.
The Xreal Air glasses are designed to be lightweight, resembling a regular pair of sunglasses, and claim to weigh a mere 79 grams, which is less than 3 ounces. In contrast, Apple has not disclosed specific weight figures for their Vision Pro headset. CNBC’s Steve Kovach, however, described the Vision Pro as somewhat heavy and uncomfortable after wearing it for 30 minutes. The Vision Pro is worn like goggles, strapped to the head.
While Vision Pro focuses on providing a digitally simulated immersive experience, Xreal’s glasses project a screen in front of the wearer, allowing them to see the real world simultaneously. Jin highlighted this distinction between the two products.
Furthermore, Jin mentioned that Xreal’s research and development efforts are dedicated to making the glasses smaller, offering users a wider field of view, and optimizing power consumption. These improvements aim to enhance the user experience and address potential challenges associated with the current generation of Xreal glasses.
Despite Xreal’s AR glasses being the top-selling smart glasses on Amazon, they still have room for improvement in providing a flawless user experience. A recent review by Mashable highlighted downsides, such as a lack of content within Xreal’s operating system and difficulties connecting with existing devices. However, the reviewer mentioned that the Xreal glasses are used almost daily and have become an integral part of their gaming experience despite these challenges.
Xreal has garnered significant financial support, having raised $100 million in 2021, resulting in a company valuation of $700 million, as reported by CNBC. Additionally, a $60 million funding round led by Alibaba took place last year.
In collaboration with Chinese electric car brand Nio, Xreal has partnered to develop AR glasses that enable users to enjoy movies on a large virtual screen inside the vehicle.
Regarding future funding, Jin expressed the company’s intention to secure additional capital, ideally a few hundred million dollars or more. However, he did not disclose specific details about the desired amount or valuation, mentioning that he was not directly involved in those discussions.
