Xreal, a company backed by Alibaba, introduces new augmented reality glasses with a new chip, intensifying the rivalry with Meta.

• On Wednesday, Xreal unveiled its newest AR glasses, aiming to compete with Meta and Snap.
• The Xreal One Series is equipped with the X1 chip, a self-designed processor, which enhances the capabilities of the glasses.
• Among the companies that are betting on glasses instead of large headsets like Apple's Vision Pro or Meta Quest to be the mass-market winners in AR, Xreal is one of them.

On Wednesday, Xreal unveiled its latest AR glasses, aiming to compete with companies such as and.

The company, supported by the Chinese e-commerce giant, aims to take advantage of the increasing demand for AR glasses.

The Xreal One Series is equipped with the X1 chip, a self-designed processor, which enhances the capabilities of the glasses.

Xreal's glasses allow users to connect to devices and view content on a large digital screen without the need for a companion device like the Beam.

Xreal CEO Chi Xu stated in an interview with CNBC that the upgrade is likely the largest in Xreal history and could be the biggest upgrade for the entire consumer AR glasses sector.

Xu stated that the X1 chip, which has been under development for three years, will enhance the glasses' features and set them apart from competitors.

Xu stated that we must increase our efforts to create a chip that is defining the new features for these types of glasses.

Xreal is a major player in the AR glasses market, but faces competition from Snap and Meta Ray-Ban, while CNBC reported that Xreal is collaborating with Google and Samsung on a new set of glasses.

Companies such as Xreal are placing their bets on glasses instead of large headsets like Apple's Vision Pro and Meta Quest to become the mass-market leaders in AR.

"Xu stated that people are beginning to understand that headsets are not practical, and we must shift to lighter form factors in the glasses category. However, the challenge lies in whether we can push the boundaries of glasses to provide a headset experience on a smaller scale."

The Xreal One and Xreal One Pro are priced at $499 and $599 respectively.

Despite the hype surrounding AR technology, which involves overlaying digital content onto the real world, the market has not experienced the explosive growth that many had predicted. Large headsets have proven to be too expensive or uncomfortable, leading firms like Xreal and Meta to focus on improving the experience with glasses.

The CEO stated that the lack of content and killer use cases for the product is an issue that needs to be addressed before the product category can reach a wider user base. He emphasized that this starts with good hardware.

To improve the experience, we need a platform and an ecosystem, but we need good hardware to get developers excited, according to Xu, who spoke to CNBC.

The company anticipates selling approximately 1 million units of its current products by 2025, which is twice the number sold this year.