Apple’s launch of Vision Pro, what it refers to as its first spatial computer, is generating a lot of buzz in China. The hashtag #Apple Vision Pro 苹果首款头显 (Apple’s first head-mounted display) amassed over 40 million views on Weibo, China’s Twitter equivalent, on the launch day alone.
The country’s virtual and augmented reality industry went from the talk of the town a few years ago to a disappointment to investors and consumers who expected to see mass adoption quickly — last year, XR device shipment crossed 1 million units in China, a number that’s insignificant compared to the reach of other consumer electronics.
While Wall Street traders are skeptical of Vision Pro’s price tag and usability, China’s mixed reality community is excited that the device’s debut has rekindled the public’s interest in XR, which could eventually help bring the necessary talent, supply chain resources and investments into the nascent space.
“The issue isn’t lack of progress or technological growth, the XR industry has that in strides, but rather overly optimistic timelines and inflated expectations that dampened both consumer and investor confidence in the industry’s ability to deliver a mainstream, consumer-friendly product,” said Gavin Newton-Tanzer, president of Sunrise International, Asia producer of the global XR conference AWE.
Market researcher Counterpoint summed up the recent development of China’s XR industry aptly:
The development of VR glasses took off in China in 2016, with standalone devices becoming mainstream in 2019. As of 2023, we are seeing the market frenzy for VR devices subsiding, with the industry waiting for the introduction of Apple’s first MR headset. Meanwhile, the development of AR glasses is still at an early stage, with only limited products available in China prior to 2022. However, since 2022/2023, we are seeing more products being commercialized.
Just as Stability AI and OpenAI inspired a legion of followers and challengers in China, Vision Pro will likely set in motion a period of rapid development at local device makers, buoyed by increased investor confidence. TechCrunch spoke to five XR entrepreneurs and experts with deep experience in China to find out how Vision Pro’s debut will shape the industry in the country for the foreseeable future.
Renewed excitement
Regardless of Vision Pro’s eventual commercial success, there’s no doubt that the device is a long-awaited boost in confidence for China’s XR industry.
Chinese device makers have been through a few years of challenging times. For one, “COVID translated to a breakdown in international ties for many young companies just as the global XR ecosystem was gaining momentum,” Newton-Tanzer suggested.
XR startups have also been facing a harder time convincing Chinese investors, who Newton-Tanzer described as “particularly sensitive to hype cycles.”
“Negative press from the inevitable breakdown of the metaverse hype has led to many companies treading water,” he added.
“In this way, the Apple release is a beacon of hope shining through the current storm, which many will use to bolster the case for their business, as the respected hardware giant brings its formidable 2 billion users into the fold.”
The positive mood shift, in turn, could spur investments by various players that will benefit the long-term growth of the young industry.
Misa Zhu, founder and CEO of Hangzhou-based AR glasses maker Rokid, reckons Vision Pro will help drive the supply chain. Given the relatively small shipment volume of AR and VR devices, factories have been reluctant to scale up production capacity, resulting in deep costs for manufacturers which often have to let consumers share the costs.
“Now that manufacturers see Apple is betting on AR, they will be more confident in ramping up production. A flourishing supply chain will benefit not just Apple but also the other players in the industry,” suggested Zhu.
Zhu also believes that Apple will attract a flood of developers to create applications and content for the Vision Pro ecosystem. These developers will want to maximize the reach of their work so they will likely also publish them on other platforms, benefiting the less influential players.
Howie Li, founder and CEO of TCL’s XR brand RayNeo, which recently introduced lightweight AR glasses with features like real-time translation, navigation and message prompts, echoed Zhu’s forecast: “When we examine the industry landscape, while Vision Pro didn’t unveil groundbreaking new AR use cases at WWDC, it has created a pivotal development platform for AR applications. This platform will play a significant role in driving the global growth of the AR application ecosystem.”
Zhu is thankful that Vision Pro is playing an important role in popularizing the concept of AR and distinguishing it from VR, which has been more familiar to the public thanks to its focus on entertainment and games.
“A lot of people mistook us for a VR company before, but having seen Vision Pro’s use cases, they now know that we are focused on AR and are quite different from companies like Pico, saving us from educating the market,” said the founder.
Make a move
As with previous pivotal technology launches from Silicon Valley, Vision Pro will prompt Chinese manufacturers who have been observing Apple’s progress to “make a move,” said XR industry veteran See Wan Toong.
“There will be companies coming out with similar modules, following Apple’s concept. The hardware isn’t hard to make, but Chinese companies lag behind in developing optic software,” he added.
But not everyone wants to follow the giant. Xreal (previously Nreal), co-founded by a Magic Leap veteran and has raised around $250 million in funding to work on lightweight XR glasses, has gone in “very different directions” with its product development from Apple, said Peng Jin, co-founder at Xreal.
Its earlier product, the Xreal Light, is similar to Vision Pro. But the team soon found that many people were using the glasses for watching videos and playing games. These simpler tasks don’t require features like SLAM algorithms, which gather information about the physical environment, maps it and puts the user on the map. So the company subsequently introduced a model without SLAM, which is cheaper and has a longer battery life as a result, the Xreal Air.
“I believe new players in the market are in fact working together to bring diversity and awareness to this AR revolution,” Peng said.
Vision Pro’s future in China
Apple did not specify whether it will launch Vision Pro in China, though Newton-Tanzer believes that the device, which is priced at a prohibitive $3,500, will “almost certainly be available in China next year.”
“It’s expensive, but as an Apple fan, I’ll definitely buy it. It’s my mission to contribute to the progress of technology,” said a Shanghai-based entrepreneur who prides himself on buying the first iPhone when the handset still had limited functionality.
If Newton-Tanzer’s prediction is right, Xiong could be enjoying the vast library of Apple content via Vision Pro next year and using the headset to interface with his family of Apple products to perform work tasks.
Vision Pro’s “current content plan is mostly for native iOS content, as opposed to VR native games like Quest, which means they will have a tremendous advantage over all other players, as they will launch with an already extensive content library,” Newton-Tanzer noted.
While most other American tech giants have left China as the country’s regulatory environment tightens over the years, Apple has striven to be in the good graces of local regulators, for instance, by storing Chinese user data within the country’s borders and censoring content services like podcasts. That means Vision Pro might come with limited features and a smaller reservoir of content in China, but Apple will have a head start in government relations over other foreign players like Quest, which has yet to launch in the country.
Moreover, the lack of foreign content and applications might eventually be compensated by China’s homegrown developers who want to bet on Apple’s second-largest market.
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