In the future, XR will not only be exclusive to games and film and television, but will also be integrated into various scenarios such as industry, medical care, education, and office.
Recently, the XR track has been on fire again.
Recently, Qualcomm announced the launch of the wireless AR smart glasses reference design powered by the Snapdragon XR2 platform, which will serve as a model to help major OEMs/ODMs and terminal brands quickly launch prototypes and accelerate the popularity of AR glasses.
There is also new news on Apple’s MR devices. Apple executives showed board members an upcoming AR/VR headset last week, according to Bloomberg, citing people familiar with the matter. According to reports, Apple plans to launch the headset as early as the end of this year or next year, with plans to release it to consumers by 2023.
AR (Augmented Reality, Augmented Reality), VR (Virtual Reality, Virtual Reality), MR (Mixed Reality, Mixed Reality) and other technologies are collectively referred to as XR (Extended Reality, Extended Reality), refers to the combination of real and virtual through computer technology , to create a virtual environment that can interact with human and computer for the experiencer, and bring the “immersion” of seamless transition between the virtual world and the real world.
On one side is Qualcomm, the vane of mobile computing platforms, and on the other, Apple, which leads the trend of new technologies. Both of them point to XR at the same time, does it mean that the inflection point of this industry is coming?
In fact, the resurgence of the XR industry has long been revealed. 2021 is called “the first year of the Metaverse”, but the more down-to-earth XR industry will be popular first. With the official change of Facebook’s name to Meta, domestic Internet companies such as Tencent, Alibaba, ByteDance, and Xiaomi quickly entered the game, plus global technology giants such as Google, Microsoft, Sony, and Samsung, as well as a large number of start-ups. The emergence of XR has made the XR industry more and more lively.
What is more noteworthy is that with the popularity of consumer-grade XR headsets (referred to as XR headsets) in recent years, new immersive experiences and interactive methods have gradually been brought into the lives of ordinary people.
01 Visible and tangible XR
Since 2021, people have suddenly discovered that compared with cutting-edge technologies such as artificial intelligence, big data, cloud computing, and the Internet of Things, XR, which is also a new generation of information technology, is no longer just an unfathomable technical concept, but can It is displayed in front of people in the form of products, which can be seen and touched.
According to IDC’s latest forecast data, the total global AR/VR investment scale in 2021 is close to US$14.67 billion, and is expected to increase to US$74.73 billion in 2026, with a five-year compound growth rate (CAGR) of 38.5%. Among them, the five-year CAGR of the Chinese market is expected to reach 43.8%, ranking first in the world in terms of growth rate.
Counterpoint predicts that shipments of extended reality (XR) headsets are expected to grow from 11 million units in 2021 to 105 million units in 2025, an increase of about 10 times. XR headset sales will start to explode in 2022, as this will be the year with the most new XR product releases, including the Oculus Quest series, Sony PlayStation VR2 and Apple AR glasses.
It can be seen from this that the institutions’ optimistic expectations for the global XR head-mounted display market are also optimistic about the development prospects of the industry. At present, the price of new XR headsets on the domestic market is generally in the price range of 2,000-3,000 yuan, or even lower than 2,000 yuan, which is almost the same as the price of mainstream smartphones. It can be said that the price-performance ratio is quite good, and it is also ready for popularization.
Among them, AR headsets focus on To B-end industry applications, such as Microsoft HoloLens 2, while VR headsets mainly focus on the consumer field, which is the most common. In terms of brand, Meta’s Oculus Quest2 is currently the most popular VR headset, accounting for about 80% of the market. The rest of the market is divided up by DPVR (Dapeng VR), Sony, Pico VR, Valve (Villefort), HTC and other manufacturers, of which DPVR and Pico VR are both domestic start-ups.
Although the XR head-mounted display industry is in a situation where Meta is “dominant”, as the market matures, there are still a lot of opportunities, and even change the existing pattern. Especially in China, while the Internet and technology giants are laying out, a large number of start-ups are emerging.
02The appearance of all beings under the financing tide
According to the incomplete statistics of Sina VR, the number and amount of VR/AR investment and financing in the first quarter of 2022 will show explosive growth. There are a total of 57 VR/AR investment and financing events publicly disclosed in China, with a total financing of more than 4.93 billion yuan.
In contrast, in 2021, there will be more than 120 domestic VR/AR investment and financing events, with a total investment and financing of 9 billion yuan. Therefore, the number of investment and financing in the first quarter of this year is equivalent to 48% of last year’s total. The total amount is equivalent to 55% of that of the whole year of last year. The investment and financing in the entire VR/AR field have shown rapid growth in both quantity and scale, and are increasingly entering a new stage of rapid development.
Judging from the main financing events so far, although there has not been a merger and acquisition event similar to ByteDance’s 9 billion acquisition of Pico VR last year, there are still many major financing events . For example, Rokid received 700 million yuan in Series C financing from Fosun Group; Nreal received $60 million in C+ round financing from Alibaba; Yuguang Technology won 200 million yuan in equity investment from Goertek; Yingmu Technology received nearly 1,000 yuan from Momo Technology $10,000 Series A financing.
First of all, from the perspective of financing institutions, CVC (corporate venture capital) is still the main force. In addition to the above-mentioned Fosun Group, Alibaba, etc., ByteDance, Blue Cursor, Lakala, Agora, Foxconn, OPPO, iQiyi, Haier and other companies have placed bets one after another, with the purpose of targeting Technology and industrial chain layout.
Among them, ByteDance voted for “Li Weike” who started from virtual human to develop XR glasses this year; Blue Cursor and Lakala jointly voted for “Most Popular Qitian” focusing on XR content; Shengwang Agora also participated in XR content company “Chuanghuan Technology” A round investment; Foxconn participated in the investment in AR optical display company “Lingxi Shimmer”; OPPO invested in XR head display chip company “Ruisi Zhixin” A round financing; iQiyi and Haier participated in the investment “Qingdao Virtual Reality Research Institute” focusing on XR software and hardware research and development.
Secondly, from the perspective of business layout, the investment direction is not only head-mounted display equipment, but also extends to upstream core components such as chips and optical modules. While content and virtual humans are still the main investment directions, application scenarios such as video, medical care, and digital twins are also attracting more and more attention from capital. It can be seen that start-ups have begun to penetrate into multiple core areas and application scenarios of the XR industry chain, and have won bets from CVCs, forming a synergy of the industry chain.
It is not difficult to find that the current layout of the XR field is mainly divided into three camps. Internet manufacturers regard VR as an extension of their original business to control this innovative content form; terminal hardware manufacturers such as smartphones see AR as a new opportunity for the next-generation terminal revolution; the influx of start-ups, from every detail vertical Cut into fields and scenarios, and compete for industry space and opportunities. It is foreseeable that the entire industry chain is moving towards a new stage of prosperity.
03 Industry Chain Opportunities Undecided
From the product form, the XR head-mounted display is equivalent to a head-mounted display device with XR function. Its basic functions include “display + interaction + computing”, and at the same time, it needs to have excellent wearability and bring a sense of immersion. Therefore, according to the logic of smartphones, XR headsets are likely to become the next generation of intelligent terminal equipment, and will lead a revolution in human-computer interaction.
From the perspective of traditional terminal hardware, the XR industry chain has a high degree of similarity and overlap with smartphones, wearable devices, and PCs. In terms of hardware terminals, including terminals, displays, sensory interaction, chips, supporting peripherals, OEM/ODM, etc.; system software is mainly divided into operating systems, tool software, etc.
From a broader application level, the industry chain should also include an application layer, oriented to the consumer side (To C) and the enterprise side (To B) respectively. Among them, the consumer side mainly includes games, film and television, live broadcast, e-sports, social networking, 3D interaction, content distribution, etc.; the enterprise side includes industry, medical care, real estate, e-commerce, advertising and marketing, cultural tourism, exhibitions, education and training, and office collaboration. , virtual meetings, etc.
At the same time, the application layer also needs the platform layer to provide technical support for it, covering a series of new-generation information technologies and corresponding platforms such as AR/VR/MR, edge computing, cloud computing, big data, AI, and 5G.
It can be seen that the terminal hardware manufacturers are the first to enter the XR industry chain, especially the original suppliers in the field of smartphones, wearable devices and PCs have basically begun to expand into the XR field.
On May 12, Google announced a new generation of AR glasses concept machine at its annual developer conference, which attracted great attention. At the same time, almost all smartphone manufacturers such as Samsung, Huawei, Xiaomi, and OPPO cannot refuse the attractiveness of AR glasses, and regard them as the next generation of intelligent terminal equipment and a brand-new interactive platform, and invest huge amounts of money in research and development.
In terms of components, the display is divided into components such as cameras, optical components, and displays. In addition to foreign manufacturers such as Sony and Samsung, domestic manufacturers such as Shunyu Optics, Crystal Optoelectronics, Lianchuang Electronics, BOE, and TCL Technology have layouts; Chips are naturally inseparable from giants such as Qualcomm, MediaTek, AMD, Samsung, etc. At the same time, domestic manufacturers such as Allwinner Technology, Rockchip, and Jingchen have been involved, but domestic replacement still has a long way to go ; system software, especially XR-related operations The system is still in the rough stage, and it has not formed a situation where Android and iOS compete against each other. Each company develops it by itself, and all start-ups can participate in the competition, but it is still a problem of establishing an ecosystem.
In terms of OEM/ODM, we have to mention Goertek, which has an 80% market share in the foundry of mid-to-high-end AR/VR products. Its customers include Oculus (Meta), Sony, Huawei, etc. , among which Oculus and Sony And other related products signed an exclusive OEM agreement. In order to ensure the foundry business, Goertek “let go” its own incubation of Pico VR, which was acquired by ByteDance. At the same time, Goertek has also invested in and acquired many start-ups, and is undoubtedly the “hidden champion” in the XR field. In addition, Lixun Precision, Lens Technology, and Lingyi Zhizao, which are also giants in the “Apple industry chain”, have all laid out the XR business.
On the other hand, Internet and technology giants rely on their own technology accumulation, and gradually derive from the platform layer to the application layer, among which application scenarios such as games, film and television, live broadcast, social networking, and content distribution have become the main battlefield. The emergence of start-ups has also quickly filled the vacancies in the market and cut into various sub-vertical fields.
But there is no doubt that the entire XR industry chain has not yet formed a unified standard. The most typical example is that the XR headset is divided into different forms such as split type and integrated type, and the related configurations and requirements are also different. Therefore, Qualcomm recently launched the wireless AR smart glasses reference design, which can be said to have taken a new step towards a unified standard. But it can be said that the industry is still full of opportunities.
04XR is not just a Metaverse entrance
When it comes to XR, it is inevitable to equate it with the Metaverse.
But unlike the Metaverse that currently exists only at the conceptual level, XR is already a 100 billion-scale market, and the market size is growing year by year.
According to IDC data, the global spending of the AR/VR market will reach US$12.07 billion in 2020, a year-on-year increase of 43.8%. The 5-year forecast period 2020-2024 will reach a CAGR of 54.0%, or USD 67.8 billion.
Frost & Sullivan forecasts that the global market for virtual and augmented reality technology will climb to $661.4 billion by 2025, representing a CAGR of 86.3% between 2019 and 2025.
TrendForce Industry Research Institute, a subsidiary of TrendForce, estimates that the hardware market will grow to 43.2 million units by 2025, with a compound annual growth rate of 53.1% from 2020 to 2025.
Judging from the forecast of market size and compound growth rate, institutions have given optimistic expectations for the XR industry, convinced that the industry will continue to improve. However, although the XR industry is already a market size of 100 billion yuan, compared with other trillion-dollar tracks, there is still huge potential and room for improvement.
In addition to devices such as XR head-mounted displays that are expected to become the next generation of smart terminals, from the perspective of technology itself, VR is considered to be a form of new-generation media that can create more immersive scenes and experiences; AR is a new-generation interactive experience and platform; MR has the characteristics of both, which can build a bridge between the virtual world and the real world. Naturally, there is a wider trillion-dollar universe super track behind it.
There is no doubt that in the future, XR will not only be exclusive to games and film and television, but will also be integrated into various scenarios such as industry, medical care, education, and office to help people open more unknown doors and gain a broader imagination and experience.
Of course, there are more and more stories to tell.
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