Biz / Tech

AR market waits for its "iPhone moment" to hit 1M sales

Zhu Shenshen
Chinese AR firms including XREAL have challenged technology giants such as Meta and Microsoft in the global augmented reality market.
Zhu Shenshen
AR market waits for its "iPhone moment" to hit 1M sales
Zhu Shenshen / SHINE

People test XREAL glasses in Shanghai this week.

The augmented reality or AR market is going to have an "iPhone moment" and hit up to 100 million transactions, with rapidly growing sales and wide recognition in the consumer market, and spiritual computing and Metaverse experiences, Chinese AR firm XREAL said in Shanghai.

XREAL, formerly known as Nreal, has rapidly expanded in overseas markets, challenging tech giants such as Meta and Microsoft. The company has high expectations for the consumer market with its domestic debut last year, said Xu Chi, XREAL's founder and chief executive.

XREAL, which designs AR glasses including the XREAL Air 2, has generated global sales of over 200,000 units, with overseas sales accounting for 70 percent. Its annual sales tripled annually on average in recent years, Xu said during an interview in Shanghai on Tuesday.

The industry is waiting for its "iPhone moment" or "Tesla moment," which would come soon to boost AR device sales to 100 million units in the future, Xu said.

In the second quarter, China's consumer AR device market (mainly for AR glasses), jumped 251 percent year on year to 52,000 units, making it enter an "explosive growth stage", according to CINNO Research.

According to IDC, XREAL led the AR device market globally in the first half, with 39.03 percent of market share by June.

Meanwhile, Chinese tech giant Huawei has also penetrated the market. AR device market sales would hit 10 million in volume in 2025 and would enter a fast track from then, according to other AR firms.

AR market waits for its "iPhone moment" to hit 1M sales

Apple released its AR device in June.

Apple also released its glasses-like device, Vision Pro, in June, fueling the market attention, although with a hefty cost of US$3,499 and availability only in the United States in 2024.

With booming attention and capital, and policy support for the AR industry, China plans to build a complete and healthy AR ecosystem, with more device sales and suitable content and applications.

That seems to fit well with Shanghai's city strategy.

Shanghai is the first city nationwide to draft a long-term blueprint for the development of Metaverse applications, with AR and VR as key techs. The city announced previously it would boost the Metaverse industry with an expected output of 350 billion yuan (US$50 billion) in 2025.

XREAL devices are building closer connections with devices including smartphones, TVs, game consoles, and cars, allowing users to wear glasses and enjoy content in a friendly and easy way. In future, it would open a new spiritual computing era and create an AR device market of 100 million unit sales, surpassing VR device sales, Xu said.

Spiritual computing is technology that enhances the spiritual experience of digital users.

In China, XREAL sells AR glasses through TMall and JD and some NIO stores, thanks to its partnership with the electric car maker on in-vehicle digital entertainment.

XREAL would explore channels with offline outlets or pop-up stores in Shanghai and nationwide, Xu said.

In overseas markets, XREAL has become a leader in the consumer AR device market, beating the sales of Microsoft since 2022. Its Air series has also featured on the "Amazon Most Wished for" products list.

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