Chinese technology giants missed the XR wave, unfortunately

One day has passed, and the heat of Apple VisionPro is still fermenting. More details about the production of VisionPro are gradually emerging, and media reports have revealed that Apple's second generation head display product has also entered the development stage, and pricing will be more affordable. It is expected to be launched after 2025.

Stimulated by the good news, Apple's MR concept stocks rebounded sharply in the early trading stage of June 7. Qingyue Technology, Derun Electronics, and Time and Space Technology went up and down in response to the call, and Jept, Luxshare, and SmartCube also rose in succession. Although there are concerns and doubts from the outside world, it cannot be denied that Apple VisionPro has brought rare attention to the industry recently.

Apple has entered the arena, and its competitors must be very complex in their hearts. On the one hand, they are happy to see the popularity of AR/VR rise, attracting more user attention, and on the other hand, they are also wary of being taken away by Apple. Among overseas manufacturers, Meta and Sony are far ahead, so they naturally won't be too afraid of Apple's challenge. On the other hand, in China, who among the tech giants who are still standing firm has the ability to compete with Apple?

ByteDance: PICO that actively shrinks is still the leader in China

Among the domestic giants, ByteDance has the largest investment and the most extensive layout. PICO, which won a lot of money at the beginning, occupies an important position in the global VR market.But after entering 2023, the continuous negative news from PICO has raised some concerns about its operating conditions.

In February of this year, PICO was exposed to a new round of personnel optimization, with a layoff rate of approximately 15%. It is reported that PICO has a total of approximately 2000 employees worldwide, with the market and operations teams being the hardest hit areas for layoffs, while the technical research and development team has escaped unscathed. In response to this matter, PICO stated to the media that "it is a normal organizational structure adjustment", and some employees revealed on social media that the reason for the company's layoffs was due to project management issues, and it was not the employees' fault.

Including the initial acquisition expenses, Byte has invested nearly 20 billion yuan in PICO over the past year. However, with the decline of Metaverse's popularity and the sharp decline of VR/AR shipments in 2022, bytes also cast doubt on the future of this project. After layoffs, there are reports that PICO has lowered its 2023 VR equipment shipment target by 50% to approximately 500000 units.

However, Byte has not blindly shrunk or reduced investment, and PICO is not vague about where to spend money, and is still actively exploring new ways out.

On the one hand, PICO is still iterating with new products, and the new generation VR all-in-one machine PICO4 launched in September last year has received good user feedback.In April of this year, PICO4Pro also officially debuted, with varying degrees of upgrades in hardware configuration, system, and application ecology compared to the PICO4 series. For example, in terms of performance, PICO4Pro continues to use the Qualcomm Snapdragon XR2 processor, with single core and multi-core performance increased by 20% and 30% respectively compared with the previous generation of products.

On the other hand, PICO has also stepped up its efforts to enter overseas markets and expand its sales channels.According to IDC data, PICO's market share increased nearly twice in the third quarter of last year, with outstanding contributions from the Asian and European markets. Compared to Meta's Quest series, cost-effectiveness is PICO's biggest advantage. In China, PICO's market share advantage is even more evident, having been at the top since 2020, with a peak period exceeding 50%.

For ByteDance, the performance of PICO may not meet the expectations, but this has a lot to do with the changes in the market environment, and the potential of the project itself is still worth affirming.

Xiaomi: When will the AR glasses personally brought by Lei Jun be mass-produced?

As the most enthusiastic technology giant in China to benchmark Apple, Xiaomi has certainly not let go of the AR/VR craze, and, like Byte, focuses on hardware.

In September 2021, when the concept of Metaverse was the most popular, Xiaomi exposed the concept machine of MicroLED lightweight AR glasses all-in-one machine. Liu Jingyan, then the head of Xiaomi cloud games, also said that he would make a comprehensive layout in cloud games, Metaverse, AR/VR and other fields.

However, the development speed of Xiaomi AR glasses is not fast, and several technical levels are still difficult to break through, such as the limited field of view angle of optical prisms and chip computing power.It took nearly a year for Xiaomi Ecological Chain Enterprise Honeycomb Technology to launch its first Smartglasses product, Mijia glasses camera.

The leader of this product is Xia Yongfeng, former vice president of Xiaomi Ecological Chain and general manager of mobile phone department. Honeycomb Technology has also received strong support from Xiaomi in the process of research and development, and completed three rounds of financing within two years. Xiaomi and Shunwei Capital are the main funders. The final adoption of free form surface optical prism technology also struggles to find a balance in terms of eyewear weight, cost, and field of view angle.

As for Xiaomi's own flagship product - the Wireless AR Glasses Exploration Edition, it was not until the MWC World Mobile Communication Conference in February this year that it arrived late.Lei Jun also attached great importance to this product and personally promoted it on site. Afterwards, he also forwarded many demonstration videos and feature introduction copies on his personal social account.

(Image from Lei Jun's personal Weibo account)

According to Lei Jun, micro gesture interaction, large screen application ecology, and interconnection scenarios are the main highlights of the Xiaomi Infinite AR Glasses Exploration Edition, with end-to-end delay controlled within 50ms and retinal level optical modules being particularly promoted.However, there is still a lot of uncertainty about this product: the price and production time have not been announced yet, and it is also unknown whether more supporting applications and content ecology will be launched in the future.

It is worth affirming that Xiaomi is not a high profile player on the VR/AR track, but has always been persistent.

Xiaomi has launched hardware products such as VR boxes as early as 2016, with rich production and research and development experience. As an agent, it has introduced the MetaOculusGo series of products and has never given up exploring VR/AR business. According to data from Yiguan Qianfan, in the third quarter of last year, Mijia AR glasses entered the top four domestic market share for the first time, with a share of about 8.5%. Many users are already looking forward to the next generation of products.

Looking ahead, Xiaomi may not invest heavily, but it is also unlikely that the entire army will retreat. In the domestic VR/AR arena, Xiaomi has always been a force that cannot be ignored.

Baidu: The backbone resigns, and the Xirang platform faces a crisis of marginalization

Unlike the two hardware manufacturers mentioned above, Baidu focuses more on content, system, and other software aspects.In the list of "2022 Top 50 Enterprises in China's VR Industry" released at the World VR Industry Conference held last year, Baidu topped the list, pushing HTC, Goer, Migu, IFlytek and other major manufacturers. The key product Baidu promoted at the conference was the Metaverse ecology of Greece.

The Greek earth platform released at the end of 2021 was made the "first domestic Metaverse" product by Baidu, and then the Greek earth Metaverse base MetaStack and other complementary products were launched, forming a Metaverse platform covering virtual social networking, teleconferencing, virtual space customization, full-fledged human-computer interaction and other functions.

According to official data, Baidu Xirang has undertaken more than 120 meta cosmic activities and space projects by the end of last year, including cultural tourism, art and auto consumption, including Baidu AI developer conference, Web3.0 immersive Metaverse song festival and other large-scale projects, and has also made some achievements.

Although Baidu has also launched VR all-in-one machines, they are mainly customized products for industry scenarios and are not prepared for large-scale promotion.Greece is Baidu's ace in the VR/AR field, and its goal is to become a leading interactive platform in China. Robin Lee has also repeatedly shouted for Greece.But after entering 2023, Baidu's focus quickly shifted to the AI big model, and Xi Rang gradually became marginalized.

On May 19th, Interface News reported that Ma Jie, the head of Baidu Xilang's business, had recently resigned, and some members of the team had also transferred or directly resigned, causing internal turmoil. According to reports, there is no hope for profit in the short term, high costs, and the AIGC business occupying more resources of the company are all important reasons for Xi Rang being put in the cold.

Tracing the development process of Baidu AR/VR, it can be found that the attitude of senior management towards this business has been constantly changing. As early as 2018, Baidu teamed up with Youxin to develop VR panoramic viewing technology for used cars. Like Alibaba and Tencent, Baidu is one of the earliest major players in China to enter the VR market. But also out of the consideration of commercialization, Baidu did not continue to increase investment, but instead invested more resources in automatic driving related businesses. It did not pick up the VR business until Metaverse exploded.

This is also Baidu's consistent strategy: everything follows the trend.Nowadays, the AI big model is becoming popular and will inevitably occupy all the core resources of the group. Other unprofitable businesses will have to be sidelined, and it is entirely foreseeable that Xirang will be marginalized. But Baidu has not completely given up on VR/AR. Whether it will make a comeback in the future, only time can give the answer.

IQiyi: Can AR/VR technology+content ecology create new tricks?

Compared to Baidu, iQiyi has a greater ambition, a more comprehensive AR/VR business layout, and a dual focus on hardware and content.

IQiyi is very clear that its strengths and weaknesses are content productionAs early as 2018, he created what is known as the first science fiction action themed AR work in China, the VR version of "The City Without Owners", and even nominated for the Venice Film Festival that year. At present, the main application scenarios of VR/AR devices are still concentrated in a few fields such as gaming, film and television entertainment, which can precisely leverage the advantages of iQiyi.

In terms of hardware, iQiyi has its own ace - the Adventure VR all-in-one machine, which has been updated to the third generation of products.The latest Adventure MIXVR all-in-one machine features a 4K ultra high-definition display screen and is equipped with Qualcomm's Snapdragon XR2 processor, greatly improving the visual effect compared to the previous generation of products. Collaborating with hardware manufacturers such as Nreal and Thunderbird can further accelerate hardware research and development, production speed, and achieve resource exchange, which can be said to be mutually beneficial.

At the "iQiyi iJOY Joy Conference" held in September last year, iQiyi announced a new project called "Global Immersion in Luoyang" VR, which is particularly eye-catching. According to iQIYI's introduction, this is an immersive VR interactive project integrating AR, live scene, live role play and many other elements. Players can participate in activities and experience immersive plot interaction by wearing VR devices.

This project can also be seen as the starting point for iQiyi's AR/VR project to move from online to offline, indicating iQiyi's ambition.However, the reality is not as beautiful as imagined, and there are many difficulties in iQiyi's VR project.

In May of this year, it was reported that Xiong Wen and COO Sun Feng, CEOs of iQiyi's VR company Dreambloom Technology Co., Ltd., were about to leave their positions and initiate major layoffs. Not long after, there were also media reports of various bugs in iQiyi's Adventure DreamPro check-in and return activities, including server interruptions that prevented check-in, and completed tasks that did not return.

In response to this matter, the heads of Dream Blossom Company and iQiyi Adventure brand have both responded recently. The former acknowledges that funds have indeed been tight recently, but many users have also cheated. The latter has stated that there are indeed loopholes in data verification and monitoring during the event.

In the short term, the controversy over clock in and cash out returns will not change the fate of iQiyi's AR/VR business, but it also serves as a wake-up call for iQiyi. The VR/AR audience is still limited, and iQiyi needs to put more effort into finding a balance between attracting new customers and controlling costs. In addition, there is still room for improvement in the platform's payment system and content ecosystem, and relevant rules need to be continuously improved.

Disappearing giants: Has Tencent Kwai really abandoned AR/VR completely?

Finally, let's talk about the giants who have retreated on a large scale.The first thing to mention, of course, is Tencent, which has invested heavily in the past and has been competing with ByteDance for C bit.

On February 16th, Tencent's XR department was completely cancelled, leaving over 300 employees with only a two-month buffer period to seek internal opportunities or resign directly. Shen Li, the project leader, also resigned in November last year. Before the revocation, Tencent's XR department had nine subordinate teams, including the basic platform, visual laboratory, content platform, media technology center, and art and design center.

In the past few years, Ma Huateng himself has repeatedly waved flags and shouted for the concept of "true Internet", and regarded XR as an important development direction of Tencent in the future. Now the dissolution of the court has caused an uproar from the outside world. After abandoning the acquisition of Black Shark, Tencent's hope of relying on a third-party company to layout the VR/AR track seems to have been completely disillusioned.

In addition to Tencent, Kwai also played a retreat earlier this year.In February this year, Ma Yingwu, the project leader of Kwai Metaverse and 360-degree video, announced his resignation. The creators no longer enjoy independent support, the project has turned to normal operation, and Kwai no longer provides additional resources. At the beginning of the year, Yu Bing, the Kwai Vice President who took over the technical department from the former CTO Chen Dingjia, was also not satisfied with the results of the VR 360-degree video team, and intended to transfer more resources to the cloud business.

After all, VR/AR is a money-burning business that tests the financial strength and determination of large factories. In the past two years, the situation in the internet industry has not been ideal, and it is natural for large factories to save ammunition.But the future of VR/AR still lacks imagination, and big companies may not give up completely.

Shortly after the news of the dissolution of the XR department came out, Tencent also reported another dynamic: perhaps joining hands with Meta to become a domestic agent for Quest2. As of now, this matter has not been officially confirmed, but it can also indirectly prove that Tencent wants to leave a way for itself. After all, the wind in the technology industry has come and gone, and no one knows if VR/AR will rise again.

The idea of a large factory is also very simple: within a limited range of options, add several layers of insurance for oneself.

According to statistics from Qingting.com, the total financing amount of the AR/VR industry in 2022 was $3.49 billion, of which $2.326 billion was in the AR field and $1.163 billion was in the VR field, both showing a downward trend year-on-year. The latest news shows that the total amount of venture capital for AR/VR companies in the first quarter of this year was only $800 million, a 74% year-on-year drop.

Although the release of Apple VisionPro has boosted the confidence of practitioners, I believe most companies and investors have no idea how long this good momentum can continue. Looking ahead to the future, the VR/AR industry is still full of uncertainty. The ability of these technology giants to persevere is already the biggest victory in the industry.

Competition is certainly indispensable, but the most important thing now is to work together to make a big cake and revitalize the market. Only when the industry is improving can the companies in it see hope for persistence.