Suddenly, Magic Leap's lawsuit against Nreal, as well as its barrier to entry in the Chinese market, appears to be as insurmountable as The Great Wall itself.
On Friday, Nreal revealed that it is partnering with China Unicom, China's fifth-largest wireless provider, to bring the Nreal Light smartglasses into 400 retail stores across the country.
The partnership between Nreal and China Unicom began in June with the establishment of a 5G Innovation Center that endeavors to catalyze the development of augmented reality apps and spur the demand for 5G connectivity. By bringing Nreal Light into retail stores, China Unicom, a state-owned carrier, is backing the smartglasses as a product for mainstream consumers in the country.
"We're excited to partner with China Unicom and take the next step in accelerating the commercialization of our product," said Chi Xu, CEO and founder of Nreal, in a statement.
"By expanding our presence from the 5G innovation center to 400 retail stores, we're thrilled to be paving the road to showcase the unlimited potential that 5G can offer consumers."
Despite facing a lawsuit from Magic Leap alleging the theft of trade secrets, Nreal is moving forward with its launch of Light undeterred. In July, the company released its SDK designed to support developers interested in building apps for the Nreal Light. The company is taking applications for Nreal Developer Kits, with the "mass availability" of the consumer version of Light scheduled for 2020.
Magic Leap alleges that Xu used his inside knowledge of product prototypes and marketing to accelerate development of Light. Now, Nreal is taking another page out of Magic Leap's playbook in partnering with wireless carriers and using its retail infrastructure to showcase its AR products.
The China Unicom partnership comes on the heels of a strategic planning and development alliance with Japan's KDDI, in which the wireless company will work with Nreal to develop smartglasses solutions for the Japanese market.
"At KDDI, we anticipate the coming era of 5G technology as we work to make the world a more enjoyable place by integrating telecommunications and life design. I believe that XR technology is an essential part of that process, and through this partnership with nreal, we will create experiential value that will bring excitement to our customers," said Yasuhisa Yamada, KDDI deputy general manager for the product and customer service sector.
"Moving forward, we will conduct verification tests using XR technology in every possible field together with our partner firms as we pursue the creation of new business models for the age of 5G."
On the legal front, Magic Leap, after having some trouble serving legal notice papers to Xu, has finally secured a meeting with Nreal's US-based legal team for January 2020 to discuss the case. In addition, Magic Leap has filed an international grievance under the Hague Convention, but that may take a year or more as it goes through processing.
Smartglasses maker Nreal has essentially turned the tables on Magic Leap's lawsuit against the company. Not only does it look like Magic Leap will be unable to halt Nreal's progress in the near future, it also appears that Magic Leap's prospects for succeeding in the Chinese market may have been undermined with China's backing of Nreal.
Nreal Light's spatial computing experience might pale in comparison to the Magic Leap One, but Nreal has the support of China in terms of financial backing and now this new partnership with a state-owned wireless carrier.
Despite its sizable war chest, Magic Leap could eventually find itself shut out of the world's largest consumer market before it can get a chance to get its foot in the door.