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Nreal's plan to beat everyone else to mainstream AR glasses

The Chinese startup is preparing to release $500 AR glasses this year.

Attendees wear Nreal light mixed reality (MR) glasses during CES 2020 in Las Vegas

Nreal 's forthcoming $500 Light AR glasses may well be the first major market test of consumer-grade AR hardware.

Photo: Bridget Bennett/Bloomberg via Getty Images

Chinese startup Nreal thinks it can do what its prominent competitors haven't cracked: produce augmented reality glasses at a price low enough to attract a critical mass of consumers. Its secret weapon? The phone in your pocket.

The company is getting ready to release its $500 Nreal Light AR glasses later this year. With a price tag significantly below that of Microsoft's $3,500 HoloLens headset, as well as the $2300 Magic Leap One, Nreal Light may well be the first major market test of consumer-grade AR hardware.


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Nreal is leap-frogging Western competitors like Magic Leap and Microsoft with a radically simplified hardware architecture: The company's AR glasses come without the battery and chipsets needed for a standalone headset. Instead, consumers simply plug them into a compatible Android phone to power AR applications. It's a setup that we'll likely see being used by a number of other AR and VR devices to be released in the near future — including Apple's long-rumored AR glasses.

"To us, it's a game-changer," said Anand Agarawala, CEO of the AR teleconferencing startup Spatial, which recently announced a collaboration with Nreal. "We see it as the first AR product that you will see on the street," added Spatial co-founder Jinha Lee.

Mixed reality for everyone

Nreal stumbled across its "bring your own phone" approach by accident, Nreal's Lead Product Manager Wei Lyu told Protocol. The company had always envisioned making its glasses work with external devices, including phones, iPads and even laptops, but still focused on building a dedicated puck for power and processing needs.

But when it showed off both versions at CES 2019, the audience was clearly wowed by the idea of a headset that only requires a phone to work, leading to a shift in direction. "We iterate really fast," Lyu said.

Nreal is still selling a $1,200 dev kit with a dedicated compute unit and external controller to developers, and the company also just previewed plans for an all-in-one enterprise edition that will officially be introduced later this year. However, the clear focus is on the $500 consumer version. "We make mixed reality for everyone," Lyu said.

At launch, Nreal is looking to support high-end phones from brands like Samsung, LG, Sony and OnePlus, as well as Chinese companies like Black Shark, Oppo and Vivo. "We are very focused on trying to make our glasses compatible with most Android phones," Lyu said.

Much like Magic Leap, Nreal allows developers to build dedicated AR apps that superimpose scenes and objects onto the real world. With support for developer environments like Unity and Unreal Engine, this can include anything from games to enterprise solutions like Spatial's AR telepresence solution.

Nreal's AR glasses don't just use phones for power and compute, they also act as a secondary screen for regular Android apps, including games, video-streaming services and productivity applications. The idea is to give consumers a kind of virtual desktop to go, Lyu said.

That's not to say any of this is easy. Apps built for Nreal's glasses will need to be compelling and the technical execution good enough to keep users engaged once the initial wow factor wears off. In the past, adoption of AR and VR hardware has been held back by the lack of so-called killer apps. Cheaper hardware lowers the bar a little bit, but no matter the price, Nreal has to overcome a number of hurdles inherent to the emerging tech.


$31 million in funding and a lawsuit

Nreal was founded in early 2017 by former Magic Leap engineer Xi Chu — a fact that his erstwhile employer is not at all happy about. Magic Leap sued Nreal in June, alleging that Chu stole confidential information from the company to kickstart the development of his own AR glasses.

But the two companies couldn't be more different. Magic Leap has raised some $2.6 billion to date, employs around 2,000 people in 20 offices scattered around the globe, and has been working on its own hardware since 2011. The company said late last year that it was looking to raise hundreds of million dollars more, but has since reportedly engaged in talks to sell itself.

Nreal has only raised $31 million to date and employs around 130 people. Magic Leap argued that both of those data points were proof that the Chinese startup couldn't have built its headset on its own.

Nreal filed a motion to dismiss the case in December, arguing that Magic Leap was simply looking to get rid of a competitor. In her conversation with Protocol, Lyu suggested that Nreal ultimately had a different approach toward AR than Magic Leap, which had spent significant capital on trying to solve hard visual computing challenges, like developing its own waveguide technology.

Nreal uses a much simpler projection technology, which is a lot cheaper to manufacture but still delivers results that have impressed many people. The company also limited the number of cameras and sensors on its device, according to Lyu, further bringing down costs. At the same time, Nreal has been able to add key features expected from modern-day AR and VR headsets, including hand tracking and surface detection. "We are more focused on something that can happen now," she said.

Apple's AR glasses may look similar

There are signs that Nreal is onto something with its take on AR. Apple has reportedly been exploring a similar architecture for its upcoming AR glasses, which could tether to an iPhone for power and compute.

Qualcomm expects multiple AR and VR headsets using the same architecture to ship in the coming months, said the chip maker's GM & VP of XR Hugo Swart during a media briefing for its latest XR reference design last month. Just like Nreal's glasses, these devices could be significantly less expensive than some of the headsets available to date, Swart predicted. "If you remove all the electronics, the build can be very affordable."

Lyu also predicted a bunch of new devices that plug into phones like Nreal's glasses, but didn't seem too worried about the prospect of increased competition. "It's good news for us," she said. "It means Nreal has done something right."

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