Article | Sina Technology Ronin

Number of issues: No.48

Guest: Xu Chi, founder and CEO of Xreal

In September 2023, smart glasses co-branded with social giant Meta and Ray-Ban (Ray-Ban) attracted continued purchases and attention from overseas users. Meta founder Zuckerberg mentioned in an earnings call earlier this year, “Ray-Ban Meta smart glasses have also made a very strong start in terms of sales and engagement.” In stark contrast to the painful failure of Apple's Vision Pro, Meta began to gain strength on the smart glasses circuit.

Domestically, consumer smart glasses have also ushered in a round of rapid growth. According to VR/AR shipment data released by IDC, in 2023, 262,000 AR devices were shipped in the domestic market, up 154.4% year on year. Among them, the brand with the highest market share was Xreal, accounting for 31.6%, and its share of the global AR market exceeded 40%. Xreal has also been at the top of the smart glasses sales list for a long time on various domestic e-commerce platforms and overseas Amazon platforms, which means that Chinese companies are showing their competitiveness in the AR consumer field.

Recently, at the Beyond Expo 2024 conference held in Macau, Sina Technology's “100 Science Innovators” spoke with Xu Chi, founder and CEO of Xreal. In his view, the smart glasses circuit is facing “giant wrestling”. Apart from overseas Apple, Meta, Google, etc. that will continue to cultivate the smart glasses race track, domestic mobile phone manufacturers may also join and accelerate the development of the smart glasses circuit, which is centered on spatial computing. For Xreal, the combination of smart glasses and AI models will bring disruptive innovation.

　Apple is just one direction for smart glasses; it may not be in line with the present

Xu Chi believes that smart glasses products are now showing three forms. Apple only represents one of these directions, but it is not necessarily in line with the present.

Currently, there are three forms of smart glasses. One representative is the Apple Vision Pro, which takes the extreme future direction. Although it is extremely immersive, the cost is expensive and too heavy; the representative on the other end is the extremely lightweight Meta, which does not have any spatial computing power, only the ability to take photos and videos and intelligent voice assistants, so the weight and appearance are almost no different from ordinary sunglasses; but there is still a form in the middle. This is the balance that Xreal wants to find. On the one hand, smart glasses have both spatial computing power and AR for users The immersive feeling of interaction, on the other hand, it is also lightweight and portable.

Xu Chi said that Apple is only one of these three forms. “If Vision Pro is 1/10 of the current weight, its price would also be 1/10 of the current weight. I'm sure everyone is probably telling a completely different story.” At the same time, he believes that the three forms will not always exist. With technological breakthroughs and supply chain improvements, eventually everyone will converge to one form, and this final form, as people imagine, is no different from ordinary glasses in terms of appearance and weight, yet it can have strong spatial computing capabilities like those shown by Vision Pro. In response, he judged that “whoever seizes this opportunity can create or lead a new historical trend.”

　AR is the best carrier for AI, and AI is the best interaction for AR

Referring to the new wave triggered by the current AI model and smart hardware, Xu Chi believes that the combination of AI and AR may be the best complementary presentation method in the next 5-10 years, because AR glasses can contain information about the world you see, including eye movement information and pupil responses. These are actually all important data for AI engines, so he thinks “AR is the best carrier for AI, and in turn, AI is the best AR interaction.”

However, due to these spatialized interactions today, 3D content is very complicated, so he believes that the efficiency of directly combining the 3D world with AR glasses is low, so similar to Apple Vision Pro, which transports many 2D applications to the 3D world and shows 2.5D effects, this trend will greatly accelerate the development of the AR device ecosystem. Xu Chi believes that this approach can not only simplify costs, but also improve the efficiency of user interaction with AR devices.

Xu Chi believes that the current AI model's experience on smart hardware is still not ideal. As can be seen from the Rabbit R1 and AI Pin products, although the demo and concept video before launch are full of expectations, the actual experience lacks maturity. He believes that the reason for this is that the AI model is still not polished enough. XReal's goal is to polish AI smart glasses that are easy enough to use and complement the big model, but the development of the big model will “definitely not be done by myself (big model).”

Xu Chi is very careful about when this type of product will be launched. He said, “We hope we will not misuse users' expectations of technology for AI. We hope that one day in the future we will launch a new AI product. Everyone will think that this is how AI is changing our lives as imagined, rather than becoming another huge gap or another failure case.”

AR glasses won't kill the phone right away, but they might kill the TV first

Just as people read paper books and newspapers in the smartphone era, Xu Chi believes that AR smart glasses will not immediately replace smartphones, but they may turn off TVs. In his opinion, AR glasses have better display effects, and technology is evolving at an accelerated pace.

“One clear trend today is that many people who have used our glasses are witnessing a transition, a transition from traditional physical screens to digital screens. In other words, all the physical screens we watch today, TV, movies, and cinemas, these are all physical screens. When you've tried digital displays, you'll be convinced that physical screens will be replaced.”

Xu Chi said that this trend is very obvious in Xreal's market performance, and it also gives him full confidence in the industry: “Today we are the best-selling equipment in this industry, but our sales volume is still not big enough. But today's growth rate is basically doubling or even faster every year. So we actually have a lot of confidence in this track.”

Xu Chi told Sina Technology that Xreal invested close to 400 million yuan in research and development last year, and this year will be a big year for Xreal's products, including the next series of product launches, which will probably dazzle everyone. “These are all capabilities we have accumulated through continuous research and development over the past few years. We believe that the new products will have some pioneering new results for the industry.”

　Companies that are ambitious about terminals will want to participate in the competition

Xu Chi concluded that the most mature smartphone in the past 15 years is actually a two-dimensional world, but the evolution of smart terminals will compress the three-dimensional world into glasses. Because in the future, people need this kind of terminal, which can be three-dimensional like our real world, so we can better interact with digital information.

“Just as today our interaction with AI has become like interacting with humans, maybe in the future my interaction may be a digital assistant, which will be presented figuratively in front of me like a human being. This is our dream future of spatial computing, and I think it makes perfect sense.”

Therefore, companies that have ambitions for the post-human mobile era will want to participate in the competition. Xu Chi believes that the gradual addition of the current three giants from overseas, including Apple, Meta, and Google, shows a trend, that is, smart glasses are changing the way people interact with the digital world. To this point of view, he added:

“Because at a time when there aren't that many native AR applications, a two-dimensional spatialized or amplified content is actually good enough. If you think about it from this perspective, who in the world has the greatest advantage in this regard today? Actually, it's Apple, Google, Meta, etc. because they have a rich two-dimensional content ecosystem. Taking a step back, who else has an innate advantage in this regard? It's a mobile phone manufacturer because they also have a relatively rich second-level content ecosystem.”

In fact, Zuckerberg has expressed a similar opinion. He thinks people will want a new category of devices that allow you to seamlessly interact with artificial intelligence frequently throughout the day without having to take out your phone and press a button and point it to what you want it to see. It also stated, “Smart glasses will be a compelling formal factor in achieving this goal, and it's a great example of how our vision of artificial intelligence and the metaverse are connected.”

Speaking about whether domestic mobile phone manufacturers will also take action, Xu Chi is optimistic. He believes that all domestic mobile phone giants should enter the market. It's a bit like the automobile industry. There are also traditional car manufacturer layouts. There are also mobile phone manufacturers, such as Huawei and Xiaomi. Although they entered the market later than Wei Xiaoli, they also successfully entered this track. In his opinion, it may only be a matter of time before the giants join the smart glasses race track.