Welcome to Lowpass! This week: Xreal’s AR roadmap, and Netflix’s global growth trajectory.

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How Xreal wants to compete with Apple and Meta

Chinese AR hardware startup Xreal has some formidable opponents. The company, which was known as Nreal until it rebranded earlier this year, aims to compete with tech giants like Apple, Meta and Google for the future of spatial computing – and key to its strategy are not massive leaps, but baby steps.

Xreal recently released its second consumer product, the Xreal Air 2 glasses, which are essentially wired viewers for your phone, tablet or mobile game console. You can use them to watch videos or play games with an external monitor on your face, but anyone expecting true AR from these types of glasses will be disappointed. However, Xreal co-founder Peng Jin told me recently that there’s a real market for these types of visors, while also promising that we’ll see more on the AR front from Xreal soon.

Xreal’s new Air 2 glasses cost $399, and basically mirror the display of your phone, tablet or computer by connecting to the device with a USB C cable. The company is making additional accessories to mirror devices without USB C, and promises a 1920 x 1080 per-eye resolution with 500 nits brightness and a refresh rate of up to 120Hz.

• The Xreal Air 2 glasses are not all that different from the Nreal Air predecessor, but Jin told me that one area of improvement is comfort, with the company reducing the weight of the Air 2 by 10%, while also implementing a better weight distribution.

• It’s also worth noting that the Air 2 glasses are also similar to a number of competing products from companies like Rokid and the TCL subsidiary Rayneo. 

• What unites all of these wearable display products is that they don’t have any outward-facing cameras for media capture or tracking. This also means that they’re not capable of generating true AR that would place objects in your surroundings, or react to your environment.

• Jin readily acknowledged those shortcomings in our conversation. “It's maybe only 0.1 percent of what AR technology can promise,” he said. “Maybe just one percent of what we're capable of doing right now.”

You gotta start somewhere. That’s, in a nutshell, Xreal’s argument for building these types of glasses, and Jin pointed out that there’s plenty of precedent for this approach.

• “The whole iPhone journey started with the iPod,” he told me. By putting music in everyone’s pocket, Apple primed the market for the moment it added connectivity, and ultimately the App Store.

• The same has to happen for AR, Jin argued. “It's time to put something on your face,” he said.

• Plus, even without true AR, people do seem to get some real use out of wearable displays. “About 70 percent of our customers use our glasses about five times a week,” Jin said, referencing usage patters among US consumer for the first-generation Air glasses. “About two thirds of them use our glasses more than one hour at a time.”

• Uptake in Japan has been even higher, according to Jin. ““50 to 55 percent of our customers use our glasses more than three times a week, and more than one hour at a time,” he said.

• “This is no longer just a concept,” Jin argued. “It is really emerging into people's everyday life.”

• At the same time, Jin readily acknowledged that his company isn’t shipping millions of wearable displays just yet. Again, you gotta start somewhere. “When Sony released the Walkman on July 1st of 1979, they prepared only 30,000 units,” he said.

Priming the market with transitional tech is not new. One could argue that Meta and Apple are both doing that as well, albeit with very different hardware. While Apple’s Vision Pro is clearly a device for developers and prosumers, Meta’s Ray-Bans sit at the opposite end of the spectrum: No AR at all, but a wearable with a camera, and AI, to get people used to an assistant-powered AR future on the go.

• Both companies have invested billions of dollars into spatial computing, but Jin argued that those investments are marred by their respective legacies, and the desire to leverage existing assets and platforms for future products.

• “My takeaway from the Vision Pro announcement is that everything is built around trying to turn the existing Mac and iOS experience into spatial computing,” he said. “They're not trying to invent new experiences.”

• Meta was dealing with some of the same institutional debt, even without a long history in hardware, as it was trying to force social into AR and VR, he argued.

• “We don't have that legacy to worry about,” he said. “We start from ground zero.”

• Jin argued that Xreal’s bet on cross-platform functionality was setting the company apart from its competitors. “I'm hoping that, in this whole transformation towards a 3D world, we're going to see a much more open ecosystem,” he said.

• However, Jin also acknowledged that just building hardware alone won’t suffice in the long run. “Inevitably, we have to develop the content piece of our business,” he told me.

That could be a tall order for the startup, but Jin promised that the company was still working on AR experiences for consumers, which it plans to show off at CES in January. Xreal is also working on a successor to its original Nreal Light glasses, which do have cameras for tracking. “We are still working on two lines of products,” Jin said, adding that the company had plans to introduce a new AR device geared towards developers and enterprise users “relatively soon.”

Netflix will have 300 million subscribers before the end of the decade

Subscription video services will continue to grow around the world in the next few years, and are poised to add 321 million new subscribers to reach a total of 1.79 billion by 2029, according to new insights from Digital TV Research.

• The leader of the pack among Western services will be Netflix, which will reach 298 million global subscribers by 2029, according to the report. Netflix ended its most recent quarter with 247 million subscribers.

• Amazon will be second with 269 million subscribers, followed by Disney+ with 196 million.

• “Six US-based platforms will have 946 million SVOD subscribers by 2029, up from 751 million in 2023,” Digital TV Research states in its report.

• Of course, there’s more to the world than just the U.S.: Chinese services will have 391 million paying subscribers by 2029, and countries like India and Brazil will also see significant subscriber growth (27 million and 23 million, respectively).

Digital TV Research shared the data as part of its monthly newsletter, which also includes some interesting snapshots on pay TV and ad-supported video revenues in 2023. Check it out here.

What else

TikTok is boosting music subscriptions, according to, well, a TikTok-commissioned report that finds that 62% of all TikTok users subscribe to a paid music service, compared to 43% of consumers overall.

Unity is undoing its Weta deal. Two years after striking a deal with Peter Jackson’s FX studio for $1.625B, Unity is walking away from the deal and laying off 265 people. The silver lining: Weta is looking to rehire as many of the laid-off staffers as possible.

Netflix gets Grand Theft Auto. The streaming service will give its members free access to three classic GTA games next month in what The Verge calls “another great get for a service that’s had nothing but great gets in its two-year history.”

The Quest 3 won’t get a price cut any time soon, according to Meta CTO Andrew Bosworth.

Palestinians can’t monetize their videos on YouTube. As the war in Gaza leads to renewed global interest in local voices, Palestinian content creators struggle with being barred from YouTube’s partner program.

Walmart releases a $15 streaming stick based on the Google TV platform. It’s only HD, but still … remember when streaming devices cost $100 or more?

Netflix now dynamically optimizes all of its HDR content. The streaming service continues to squeeze every bit out of its video assets, and plans to open source the technology behind this feat.

That’s it

One of the things that helps me to wind down after a long day at the newsletter factory is cooking. This week, I stumbled across something that became an instant hit with my family: Bon Appetit’s recipe for Potatoes au Gratin. I’ve tried making Potato Gratin before, but cooking and then blending the shallots in the cream made all the difference. Yum! And now … I’m hungry. Brb, need to hunt for leftovers.

Thanks for reading, have a great weekend!