Chinese start-up counts on Apple’s headset to unleash XR demand

Apple’s Vision Pro headset is set to unleash the potential of similar products and benefit smaller players in the industry, according to the founder and chairman of a Chinese extended-reality (XR) start-up, which has been working on related technology for over a decade.

“Sixteen years ago, when I was still a programmer and decided to start my own business, most people didn’t know that the virtual-reality (VR) industry existed,” said Denny Zhou Qinghui of Shanghai Graphic Design Information Co (GDI).

“Over the past few years, we have seen many opportunities and progress in XR, especially after big companies like Apple joined, which gave us a lot of confidence.”

Those remarks by Zhou, who spoke to reporters in Shanghai on Thursday, came after Apple CEO Tim Cook revealed at a product launch event on Tuesday that its mixed-reality (MR) device, announced in June, was on track to ship in the US early next year.

MR, which allows users to interact with both physical and digital objects at the same time, makes up a group of technologies known as XR, along with VR and augmented reality.

Initial demonstrations of Apple’s Vision Pro impressed many industry players, including some in China, and inspired renewed enthusiasm in the field.

GDI, established in 2007, claims to be one of the earliest VR companies in China. Headquartered in Shanghai’s Songjiang district, the business currently has over 200 employees, focusing on XR hardware and software solutions.

While larger Chinese companies such as TikTok owner ByteDance and smartphone maker Oppo have focused their XR efforts on flashy hardware such as headsets or joysticks, GDI’s top flagship product is a software framework called IdeaXR.

Known more commonly in the industry as VR engines, tools like IdeaXR allow users to design and create 3D immersive experiences. IdeaXR, in particular, helps people with little knowledge in traditional programming languages to build VR content and applications more easily, using its so-called graphical interactive editor.

“The key underlying technology of VR is the engine,” said Zhou. “The first thing I wanted to do when I started my business was to build a domestic VR engine.”

IdeaXR, released in 2010 under the name DVS3D, has nearly 100,000 users in China, making it one of the most popular VR engines in the country besides the US-made Unity and Unreal Engine, according to Zhou.

While the other two engines are used mostly by video game developers, GDI differentiates itself by serving a wider array of clients including those in education, emergency services and advanced manufacturing. Those customers are often interested in making VR tools for training and tutoring, Zhou said.

GDI’s strategy seems to be working: the company has so far provided services to more than 3,000 business clients. They include big names such as Shanghai’s Pudong Airport, Chinese oil refining giant Sinopec, Peking University, Tsinghua University and Disney.

In the first half of 2023, GDI reported a 96 per cent year-on-year jump in revenue to 107 million yuan (US$14.9 million), allowing it to swing to a net profit of 13.65 million yuan after seeing sales drop 34 per cent last year partly because of Shanghai’s two-month Covid-19 lockdown and related supply chain disruptions, Zhou said.

GDI’s business also dovetails with China’s national strategy to boost its digital economy.

Earlier this month, five Chinese ministries jointly set out an action plan to create a domestic metaverse, which will involve cultivating three to five metaverse companies “with global influence” by 2025 through the development of artificial intelligence (AI), blockchain and VR technologies.

Another national blueprint that came out last November aimed to grow China’s MR industry to 350 billion yuan and achieve shipments of 25 million MR devices, both by 2026.

A few months earlier in July, the Shanghai government said it would establish a roughly 10 billion yuan industry fund dedicated to metaverse development.

Zhou said GDI was committed to supporting home-grown technology.

“We have made very early efforts to adapt [our engine] to domestic operating systems and hardware,” Zhou told the South China Morning Post, adding that IdeaXR is now compatible with Kylin, an operating system originally developed by the National University of Defence Technology in Changsha, central Hunan province.

Zhou’s efforts are in line with a border initiative by Beijing to boost the country’s technological self-sufficiency, as it seeks to cut reliance on US exports of advanced technologies such as semiconductors, amid an intensifying tech war between the two nations.

For now, IdeaXR still uses graphics processing units made by US chip giant Nvidia. Those processors support the high-performance computing required to render 3D graphics.

However, Zhou said GDI was also open to using chips made by other companies based on the standards of British firm Arm or US company Intel.

Recent advancement in the field of AI has created more possibilities for XR technology, according to Zhou.

“In the past two years, AI technology has been gradually integrated with XR, especially after ChatGPT was launched,” Zhou said, referring to the AI chatbot created by US start-up OpenAI. “There are many close connections between the two technologies, and it will also become a new direction for our own products.”

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