In his blog post, Mr. Guo outlines some of his expectations for the future development of the AR and VR industry. Specifically, his analysis focuses on whenappleHow Meta will compete when entering this space. Guo said the upcoming Apple VR device could be a “game changer for the headset industry.” The device, which is “likely” to launch in early 2023, will accelerate the rapid growth of the headset industry, he added.
Mr. Guo wrote: “Although Apple has repeatedly reiterated its focus on AR, I believe that Apple AR/MR headsets that support video see-thru can also provide an excellent immersive experience. The launch of Apple AR/MR headsets will further drive demand for immersive gaming/multimedia entertainment.”
Analysts say AR/MR headsets will be “the most complex product” Apple has ever dealt with, so many existing suppliers are also in the supply chain. Kuo said Apple’s position in the industry gives it a number of competitive advantages, including allowing the company to forgo joining the Metaverse Standards Forum.
The complete content is as follows
New Growth Focus of VR/Headset Industry in Post-Meta Era: Meta’s Competitors, Chinese Market and Apple/Apple Supply Chain
in conclusion:
(1) In the past 2-3 years, Meta lost money selling VR headsets and actively promoted the VR business, which is one of the keys to the rapid growth of the VR industry. Even if Meta slows down its investment in Reality Labs/VR business, the VR industry/ecology has matured, so it will not hinder the continuous growth of the VR industry.
(2) With the continuous growth of the VR industry, Meta’s reduction in VR hardware investment will benefit other VR headset brands. In addition, the Chinese market with huge potential demand and Apple AR/MR, which is expected to be released in January 2023, will also promote the continuous and rapid growth of the headset industry.
2. Meta slowed down its hardware business investment due to the economic recession (mainly reducing VR hardware investment and delaying server orders). However, it is worth noting that Meta’s decision to cut orders for VR headsets is also due to the risk of recession caused by structural challenges in the core business of its own advertising and community platforms (such as:iPhonePrivacy Policy Change).
(1) However, the demand for VR in games/multimedia entertainment has been verified, and the continuous growth of the VR industry is a clear trend.
(2) Meta sells VR headsets at a loss and uses the price advantage to gain a high market share, but this strategy will be unsustainable when facing the risk of core business recession, which will benefit other existing VR brands’ market share growth.
3. The VR/headset industry is ushering in new industrial structure changes, including:
(1) Meta’s slowdown in VR hardware investment is beneficial to other existing VR headset brands.
(2) China’s VR industry started slower than overseas markets, but the hardware and content/service market is currently growing rapidly.
(3) The establishment of the Metaverse Standards Forum contributes to the growth of the industry.
(4) Apple is a game-changer for the headset industry.
4. Currently noteworthy VR/headset brands, including Sony,Microsoft, Valve, Pico, HTC, etc.
(1) Sony’s influence in the game/multimedia entertainment industry is higher than that of Meta. PS VR2 is expected to be released in 1Q23, and the supply chain will ship about 1.5 million units in 2H22. It is expected that more AAA game masterpieces will support Sony’s PS VR2 in the future, which will boost the influence of VR headsets in the game/multimedia entertainment industry.
(2) Pico is the leading VR headset brand in China, benefiting from the huge potential demand in China and growing rapidly. In 2022, Pico VR headset shipments are expected to grow at least 40–50% YoY to 1–1.5 million units. Meta’s slowdown in VR hardware investment helps Pico grow in non-Chinese markets.
(3) HTC’s VR headset shipments are expected to grow by 30–40% YoY or more in 2022. HTC’s non-Chinese market is expected to benefit from Meta’s reduction in VR hardware investment, and cooperation with Lenovo Research Institute will also help Yu HTC’s VR business is growing globally, especially in the Chinese market.
(4) Microsoft is expected to release new models in 2H22Hololens, Valve is also currently developing new headsets, which are beneficial to the overall industry development.
5. Apple was a game-changer for headsets.
(1) Although Apple has repeatedly reiterated its focus on AR, I believe that Apple AR/MR devices that support video see-thru can also provide an excellent immersive experience. Therefore, the launch of Apple AR/MR headset will further boost the demand for immersive gaming/multimedia entertainment.
(2) Apple AR/MR is the most complex product Apple has ever designed, so many existing suppliers are also in the Apple AR/MR supply chain.
(3) Benefiting from the innovative experience of Apple AR/MR headset, Apple and Apple’s supply chain may be re-rated in the next 2-3 years and contribute to the stock price.
(4) Apple is an industry leader with a significant competitive advantage and does not need to join the Metaverse Standards Forum now.
(5) After Apple launches AR/MR headsets, I think Apple’s global competitors will scramble to imitate them, and the headset hardware will enter the next stage of rapid growth and benefit the ecological development of related services and content.
