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Augmented reality glasses, not a sci-fi thing anymore: Inside China’s Startups

Written by Wency Chen Published on 

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Nreal brings VR, AR, and XR technologies to the mass market.

Imagine a world where everyone wears a pair of Matrix-style sunglasses. With these devices on, users can play digital games, navigate maps, explore digital landscapes, talk to people thousands of miles away with a sense of hyper-realism, or even chat with a hologram assistant, among other functions.

Augmented reality (AR) technology will potentially allow users to blend digital objects with the real-world environment, like in sci-fi movies, in a person’s field of vision. Although the technology has yet to mature, estimates by ABI Research indicate that the global augmented reality market could be worth USD 100 billion by 2024, if companies can develop the right technology to popularize these devices.

Aside from western tech giants such as Google, Microsoft, and Apple, which are testing the waters, a Beijing-based startup named Tairuo Technology, also known as Nreal, entered the AR space as a dark horse, on its way to building consumer-level quality AR glasses.

“I believe glasses are the final screen that human beings need,” said Xu Chi, founder and CEO of Nreal. Although the tech and the first generation products at this stage have yet to live up to expectations, Nreal is trying to make AR a potential market reality.

Xu, who received his Ph.D. degree from the University of Minnesota in electrical computer engineering, started his career in Nvidia, and later joined US-based AR startup Magic Leap in 2015. In 2017, inspired by the entrepreneurial environment in China and driven by his own ambition to create wearable AR consumer products, he founded Nreal.

Last year, Xu’s firm announced two rounds of fundraising within two months, raking in USD 31 million from investors including China Everbright Limited New Economy Fund, video streaming firm iQiyi (NASDAQ: IQ), Xiaomi-associated Shunwei Capital, and China Growth Capital.

Also, the company showcased its first AR product—the Nreal Light—at the 2019 Consumer Electronics Show (CES). According to Engadget, this first generation of AR glasses “felt almost like ordinary sunglasses”, while offering a “surprisingly good” display quality.

Nreal Lite is a pair of mixed reality glasses weighing just 88 grams. Source: Nreal

Delivering AR glasses to the mass market 

“The first-step product we want to build is portable and wearable. Therefore, buyers could use them in everyday activities, say, on flights, on trains, or at work, by simply connecting the glasses with smartphones,” said Xu.

Unlike virtual reality headsets, AR glasses are less cumbersome and they don’t block out the physical world, Xu explained.

At this year’s CES, Nreal unveiled an upgraded version of its Nreal Light, with fancier designs and running an in-house operating system. The stylish glasses, weighing only 88 grams, are no heavier than normal sunglasses.

When I visited the company’s headquarters in Beijing, I had the opportunity to try a pair Light, in a nice orange colorwave. I was able to enjoy some videos and a cartoonish monster-shooting game, where I could “walk” around a digital island and aim at popping-up cute monsters. The 3D virtual images displayed over the lenses were bright, vivid, and quite convincing. 

To play the game, I needed to use a connected phone as a controller, which took me some time to get used to it. Probably because of my bad gaming skills, I ended up failing to pass the first round.

According to the company, the Light glasses will also support video calls, holographic collaborative workspaces, and other AR apps. However, I was not able to try these applications. 

On the technical side, the glasses are powered by a Qualcomm Snapdragon 845 processor, which allows a 52-degree horizontal field of view (FOV) at 1080p resolution, while also supporting six-degree-of-freedom (6DoF), a technology that permits users to move forward, backward, left, right, up and down in the virtual world. The Nreal Light also has 360-degree spatial sound and built-in microphones to enable upcoming voice control.

However, the Light glasses still need a wired connection to smartphones to operate. Its portability and low weight are partly because, instead of on-board processing, the Light requires a tethered connection to a high-end Android phone, which also serves as the controller.  

Xu positions this product as a smartphone accessory. It’s a less aggressive and more steady approach than trying to replace phones in the near-term, although this is the ultimate direction, he says.

“The shift from smartphones to AR glasses is more challenging than the shift from feature phones to smartphones. For example, the user interaction interface design will be totally revolutionary,” Xu said, referencing how Apple’s touch screen upended Nokia’s dominance in the mobile phone field in 2007.

In terms of appearances and specs, there’s no big difference compared to the first version, but Nreal also introduced its in-house operating system, dubbed Nubela. The company says the 3D software, which supports all Android native apps, can turn the traditional 2D smartphone browsing experience into a 3D mixed reality experience.

The advertised interface of Nubela. Source: Nreal

Nreal already opened up pre-orders for the Nreal Light Developer Kit, priced at USD 1,199, from the end of last year. The devkit includes a headset, a wireless computing unit, and a wireless controller. It has collected over 4,500 signups from developers worldwide, Xu detailed.

The consumer version of Nreal Light, priced at USD 499, was supposed to be available in early 2020, but the release plan was postponed to September because of the COVID-19 pandemic. Compared to Microsoft’s enterprise-facing Hololens 2, priced at USD 3,500, or the Magic Leap 1 at USD 2,295, the Nreal Light are much closer to the mass market, despite offering a lower resolution, lack of wireless connectivity, and less varied content.

Nreal has AR-related businesses both for enterprises and consumers, but profitability is not a current priority, Xu said. “At this stage, we’re not willing to measure whether the company is doing well or not by the number of headsets we can sell. The focus is to come up with a better user experience.”

Xu Chi, founder of Nreal. Source: Nreal

Clarifying the future of mixed reality devices

Per stats from research firm Research & Markets, global mixed reality (XR) production was valued at USD 25.4 billion in 2019 and is expected to grow by 46.5% annually from 2020 to 2026. However, the promising XR industry has been long shrouded by doubt.

For example, the once-hyped AR upstart Magic Leap raised more than USD 2 billion to build an augmented-reality device, counting Google and Chinese giant Alibaba among its largest investors, but so far, the firm has failed in keeping its promise. Encountering many setbacks lately, including a shakeup in leadership and a reported massive layoff, Florida-based Magic Leap lost its stardom and shifted to developing enterprise-facing AR solutions.

Magic Leap has also accused Xu of stealing its technology to build Nreal. However, earlier in June, a federal judge in San Jose, California, threw out the case on the request of Xu, noting that Magic Leap didn’t adequately allege that Xu exploited proprietary information to build his own mixed-reality glasses, Bloomberg reported.

Other tech giants are also betting on this industry. Google, a pioneer in the field of AR, which first released its Google Glasses in 2012, recently acquired Canadian smart glasses maker North, with the intention to invest in “hardware efforts and ambient computing future,” The Verge reported.

Also, Apple’s plan for the future release of XR headsets is now almost an open secret. According to Bloomberg, a device codenamed N301 will have its own App Store, with a focus on gaming and streaming videos, while also supporting virtual meetings. The N421, another device in development by Apple, will be an AR-only variant. Apple reportedly aims to release the N301 in 2021 or 2022 and intends to roll out the N421 as early as 2023.

Xu thinks that these moves in the sector by international established players will not only intensify the competition but will also help to increase the chances of mainstream acceptance among news users, fostering a richer content ecosystem.

Looking forward, 5G networks also hold promise for the XR industry.

“As the bandwidth and internet speed increase, more content will emerge. AR glasses might be the best device to demonstrate the capability of 5G networks,” Xu said.

Nreal has been working with telecom companies in different countries in a bid to usher its technology into 5G data packages offered by carriers. Korea, China, the US, and some European countries with advanced 5G infrastructures will lead the adoption of the technology, he predicts.

“In the long term, due to 5G networks, we will put more computing on the cloud, leaving just the user interaction and display on the terminals. Glasses will be superior devices to phones by then,” Xu noted.

It’s fair to mention that the current technology is still too immature to materialize futurists’ dreams. Yet, a potential transition from smartphones to AR glasses may occur decades from now. I’m longing for the day when no one will accidentally walk into a tree in the road while looking down at their tiny smartphone screen.

This article is part of KrASIA’s “Inside China’s Startups” series, where the writers of KrASIA speak with founders of tech companies in the country.

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