Chinese augmented reality glasses maker Nreal rebrands as Xreal as it takes on tech giants
Nreal, a Chinese augmented reality glasses company, rebranded as Xreal. Co-Founder Peng Jin told CNBC this reflects the company’s expanded product range and international expansion.
Xreal
Chinese augmented reality (AR) glasses maker Nreal on Thursday said it rebranded to Xreal — a name it hopes will encapsulate its expansion into Europe and latest products.
Peng Jin, co-founder of Xreal told CNBC in an interview that the “X” in the new branding reflects the company is “expanding beyond what we thought was possible” and highlights new AR applications. The company, whose products are already sold in the U.S., U.K., China, Japan and South Korea, is planning to launch into European markets in the third quarter of the year.
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Augmented reality refers to technology that allows digital images to be imposed over the real world and represents an area of current investment for the world’s largest tech companies, from Apple to Meta. It is a key technology in the so-called “metaverse.”
Xreal makes two models of a headset that looks like sunglasses — the Xreal Air and Xreal Light — which run the company’s own operating system, called Nebula. Like Apple with iOS on iPhones, developers can make apps for Nebula that people can then use via Nreal headsets.
When people put on their headsets and open an app, they will see a large version of that content in front of their eyes. But Nebula is only available for Android devices, limiting its appeal. On Thursday, Xreal announced a new piece of gear called Xreal Beam, which it describes as an “iPod-shaped device” that can connect, wired or wirelessly, to smartphones, gaming consoles and PCs.
This will allow someone with almost any device to use the headset. One of the key areas Xreal is targeting is gaming. For example, you could connect Xreal Beam to a gaming console, such as PlayStation, and then play a game on a massive virtual screen within your glasses rather than on a physical TV.
Since its commercial launch last year, Xreal said it has sold 150,000 products globally. Jin did not give specific numbers, but said Xreal is looking to “double or triple” its sales in the coming year.
He also revealed the company is looking to raise money. CNBC reported that Xreal fundraised $100 million in 2021 — which at the time valued the company at $700 million — followed by $60 million from Chinese e-commerce giant Alibaba last year. Xreal has some high-profile backers that include Nio Capital, the investment arm of electric carmaker Nio, as well as venture company Sequoia Capital China.
Rising AR and VR competition
Augmented and virtual reality are drawing interest from some of the world’s biggest technology companies. Meta has pinned its future to such innovations, while Apple is reportedly working on its own virtual reality headset and gaming giant Sony last year released its second virtual reality headset called PlayStation VR2.
Jin said the competition will help expand the market.
“When you have companies like Sony or even Apple start investing in the space it brings more attention to this general direction, it will draw more talent,” Jin told CNBC.
But Xreal operates in an interesting space. Its headset can be used with consoles like the PlayStation, so that people can play a game on a huge virtual screen rather than a TV.
This is not a direct competitor to the PSVR 2, which immerses players as if they were in the actual game. But it does pose questions about whether companies may move to block Xreal’s device in the future, a risk not lost on Jin.
“I’m not saying these companies will not one day decide to build their own AR glasses and decide to block us. I m not saying that’s not going to happen. But there’s so much more to gain than just blocking us,” Jin said.
State Street is reiterating its bullish stance on the artificial intelligence trade despite the Nasdaq’s worst week since April.
Chief Business Officer Anna Paglia said momentum stocks still have legs because investors are reluctant to step away from the growth story that’s driven gains all year.
“How would you not want to participate in the growth of AI technology? Everybody has been waiting for the cycle to change from growth to value. I don’t think it’s happening just yet because of the momentum,” Paglia told CNBC’s “ETF Edge” earlier this week. “I don’t think the rebalancing trade is going to happen until we see a signal from the market indicating a slowdown in these big trends.”
Paglia, who has spent 25 years in the exchange-traded funds industry, sees a higher likelihood that the space will cool off early next year.
“There will be much more focus about the diversification,” she said.
Her firm manages several ETFs with exposure to the technology sector, including the SPDR NYSE Technology ETF, which has gained 38% so far this year as of Friday’s close.
The fund, however, pulled back more than 4% over the past week as investors took profits in AI-linked names. The fund’s second top holding as of Friday’s close is Palantir Technologies, according to State Street’s website. Its stock tumbled more than 11% this week after the company’s earnings report on Monday.
Despite the decline, Paglia reaffirmed her bullish tech view in a statement to CNBC later in the week.
Meanwhile, Todd Rosenbluth suggests a rotation is already starting to grip the market. He points to a renewed appetite for health-care stocks.
“The Health Care Select Sector SPDR Fund… which has been out of favor for much of the year, started a return to favor in October,” the firm’s head of research said in the same interview. “Health care tends to be a more defensive sector, so we’re watching to see if people continue to gravitate towards that as a way of diversifying away from some of those sectors like technology.”
The Health Care Select Sector SPDR Fund, which has been underperforming technology sector this year, is up 5% since Oct. 1. It was also the second-best performing S&P 500 group this week.
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