Can Shenzhen build next Apple? Even Realities CEO thinks so

Shenzhen, not Silicon Valley, is where the next great consumer electronics company will be built, at least according to the founder of China's newest smart-glasses unicorn.

Even Realities CEO Will Wang told CNBC that startups chasing hardware breakthroughs now have better odds in southern China than in the US tech capital.

Wang, who worked on the Apple Watch and iPhone during a stint at Apple from 2016 to 2018, said building "possibly the next Apple" requires being where hardware actually gets made.

He pointed to Shenzhen's deep bench of mechanical, electrical and optical engineers, built up by a cluster of phone, drone and consumer electronics manufacturers already based there, including Tencent, Huawei, DJI and BYD.

According to Wang, American venture capital and talented engineers have moved strongly toward AI software, resulting in hardware companies having less money and less company to keep.

"It looks like Silicon Valley doesn't really reward hardware guys very much anymore," he said, adding that hardware takes longer to develop and generates narrower profit margins compared to AI technologies due to difficult supply chains.

Realities just secured $150 million in a series B funding round led by Meituan and Tencent, giving the three-year-old company a $1 billion valuation. The firm creates Even G2, cameraless smart glasses featuring notification, navigation, and real-time language translation capabilities via a head-up display, together with the Even R1 ring for hands-free operation. In contrast to the camera-enabled Ray-Ban glasses by Meta, Even left its product completely without cameras.

Even China is not the only one relying on the manufacturing prowess of China to match the lead of America in AI software applications. Competitor Rokid is valued at $2.58 billion following a raise of $522 million in March, while small competitor RayNeo is worth about $240 million.

Overall growth in the industry is strong: smart glasses shipments increased 167% year over year in Q1 2023, reaching 2.25 million units, though Meta has nearly 70% of the market share.

While it benefits from investment from Chinese funds, Even Realities relies on American consumers, with more than 50% of its users being from the US. According to Wang, Chinese investors "simply move much faster, and they are closer to us", but he assured that the next round of funding would involve international investors.