IDC: China's VR/AR market products will gradually rise

The "China VR/AR Market Quarterly Tracking Report" recently released by International Data Corporation (IDC) shows that the shipment of head-mounted display devices in China in the first quarter of 2019 was close to 275,000 units, a year-on-year increase of 15.1%. Among them, the shipment of VR head-mounted display devices increased by 17.6% year-on-year, and the increase mainly came from the desktop head-mounted display and independent head-mounted display device markets. The market share of the leading manufacturers in each market segment has gradually increased.

VR market: Entering 2019, the VR headset market continued its steady and rapid growth trend.

Domestic hardware manufacturers have gradually released new products since the end of the first quarter, and are expected to maintain steady growth in the next three quarters. In the first quarter, the commercial and consumer markets each accounted for 50.0% of the total shipments.

In terms of products, the product positioning and planning of equipment manufacturers are clearer, and high-quality native content will accelerate the application of VR in games, movies, and social scenarios. In terms of technology, technical innovations such as spatial positioning and interaction and eye tracking will play a more significant role in industry applications.

In terms of channels, as commercial customers' demand for overall solutions has increased significantly, agency channels including dealers and service integrators contributed more than 25.0% of the market share in the first quarter. Thanks to their advantages in network pipelines and user distribution, the importance of operators in future VR market channels will continue to increase.

●The market share of independent head-mounted displays has further increased. In the first quarter, the domestic market share of this segment reached 60.0%, far higher than the 23.6% of the global market. At the same time, product prices have continued to decline, and the maturity of content platforms has been continuously improved. For ecological development, the lowering of the consumption threshold of equipment and applications will help broaden the scope of user groups and increase industry activity.

●The market share of desktop head-mounted displays remained stable. The share of the commercial market continued to rise, exceeding 70.1% in this quarter. The technological upgrades brought by manufacturers such as Oculus and HTC in their new products will continue to drive the demand for high-end head-mounted display devices in industries such as manufacturing and medical care.

●The market share of screenless head-mounted displays continued to decline, accounting for only 4.0% of the overall market. As the cost of mid- to high-end head-mounted display equipment gradually decreases, the market demand for this category of products will further decrease.

AR Market: Empowering Industries

In the first quarter of 2019, shipments of AR headsets fell slightly, mainly due to the slow product iteration. It is expected that this decline will be reversed after new products enter the market.

Currently, AR head-mounted display devices provide customized solutions for industry users in commercial fields such as medical care, security, education, and manufacturing. In the future, the advantages of high bandwidth and low latency brought by 5G technology will drive the AR application market to develop in-depth towards higher precision and more professional industry fields, and the consumer market represented by entertainment and mobile office will also become an important growth point.

Although desktop head-mounted displays currently account for a small proportion of the AR market, accounting for only 23.7% of the overall market in the first quarter, this product form can achieve a more lightweight user experience and has more application scenarios. Therefore, it will usher in rapid development in the next five years. AR manufacturers represented by nreal and Rokid will promote the further maturity of this category of market.

Tan Rui, a market analyst at IDC China Terminal System Research Department, pointed out: "After a period of technological and ecological sedimentation, the domestic VR/AR industry will enter the market with iterative products to release growth potential. As one of the important application scenarios of 5G technology, the VR/AR industry should strengthen its industry participation, deeply apply cloud computing, voice interaction and other technologies, and establish first-mover advantages."