Top 10 Development Insights of China's AR/VR Market in 2024

In terms of the competition landscape of manufacturers, Here summarizes and gives the top ten insights into the Chinese AR/VR market in 2024. the specific contents are as follows:

1: In 2024, China's AR market related products shipments are expected to grow by 101.0%, and split AR shipments are expected to account for 87.6% of the overall AR market

In 2023, AR devices in China's market is expected to ship 240,000 units, a year-on-year increase of 133.9%. Among them, the shipment of integrated AR is expected to be 35,000 units, and the shipment of split AR (most of the current products need to be connected to smartphones) is expected to be 205,000 units. In 2024, AR (Augmented reality) shipments are expected to continue to grow rapidly, with an estimated growth rate of 101.0%. Split AR will still be the mainstream of the AR category, but it is worth noting that with the release of Qualcomm's AR dedicated chip and the advancement of optical waveguide technology, mainstream manufacturers will successively release or iterate integrated AR glasses, and it is expected that 60,000 units will be shipped in 2024, an increase of 68.5%.

2. AI helps AR/VR devices to accelerate their penetration into smart life scenarios, and AR hardware manufacturers and large model manufacturers continue to deepen their cooperation

In 2024, the development trend of AI+AR(Augmented reality) will help eyewear products achieve better NLP interaction and display screen presentation. High-speed text processing, accurate intelligent question-and-answer dialogue, precise semantic understanding, and efficient command recognition will all shine in applications such as real-time translation, navigation travel, video photography, and life assistants. AR (Augmented reality) hardware manufacturers will adopt a parallel self-development + cooperation model, and hardware models in cooperation with large model manufacturers will also be launched one after another, guiding users to experience, accept, and rely on more efficient and convenient new productivity tools.

3: Image processing chips enter the market strongly, and efficient processing of real-time information helps seamless connection between virtual and real.

The M2+R1 dual-chip design adopted by Apple Vision Pro has made the importance of image processing chips widely concerned. In terms of visual experience and spatial experience, image processing chips provide real-time processing of sensory input, reduce the delay of users' perception of the surrounding environment, and help seamless connection between virtual and real. The layout of domestic chip manufacturers in this field is also deepening.

4: Entering the "1+3" era around the core of visual experience, the sensory experience of smell, touch, and hearing is upgraded in all aspects, and the performance of related components enters a period of high-speed optimization

In 2024, VR devices will make a big step to realize the display upgrade from LCD screen to Micro-OLED screen, and AR glasses will also make a product transition from Birdbath solution to optical waveguide solution in terms of optical solution, and the visual experience will be greatly improved. In addition to vision, in the sound unit, the design of AR glasses directional speakers in directional propagation, sound quality, and privacy will also become the key point of competition among manufacturers. Technologies such as gas sensors, VR ( virtual reality) interactive gloves, and handle linear motors will continue to be optimized, with visual experience as the core, and the sensory experiences of smell, touch, and hearing will be upgraded in all aspects.

5: Scenario differences promote the continuous development of multimodal interaction, and multiple interaction methods will coexist for a long time

Differentiated scenario requirements determine that AR/VR devices will coexist with multiple interaction methods in the future. In entertainment, audio and video, fitness and other scenarios, handles will play an important role; and smart rings and finger rings can help users better cooperate with voice to control AR glasses; in the productivity scenario application of mixed reality headsets, gesture interaction will be more efficient and simple. Multiple interaction methods will complement each other and develop together.

6: The connection between XR devices and other terminals is getting tighter, and the threshold is lowered

In the past, the connection between AR/VR devices and external terminals was mainly through PCs and mobile phones, and there were still many requirements and restrictions on the CPU and GPU configuration of PCs and the brand and model of mobile phones. As the connection adapters and application adaptability continue to improve, tablets, console game consoles (Switch, PS, Xbox, etc.), and smart cars will be better connected with AR/VR devices, and AR/VR devices will be more smoothly integrated into the smart terminal ecosystem, playing a role in travel, productivity, and entertainment scenarios.

7: The cost of key supply chains continues to fall, and the proportion of domestic products in multiple links of the XR industry chain will continue to increase

With the launch of Apple Vision Pro in 2024, the domestic supply chain will accelerate its entry, and the cost of display screens will begin to fall. The cost pressure of manufacturers will begin to improve, and it will be easier to achieve hardware profitability in the post-subsidy era. From the perspective of supply chain layout, the proportion of domestic products will continue to increase in multiple links such as whole machine assembly, image chips, display screens, speakers, and batteries.

8: The offline channel system continues to enrich, and manufacturers enter a multi-dimensional competition in all-round sales channels, marketing strategies, content layout, and supply chain costs

From the perspective of channel system layout, more and more manufacturers are beginning to cooperate with general agents and increase cost investment and layout efforts in offline retail stores. From the perspective of marketing investment, digital enthusiasts are still the key target group for manufacturers' advertising. In terms of content layout, manufacturers' content applications adopt the parallel route of introduction + self-research to compete. From the perspective of supply chain costs, traditional hardware manufacturers such as mobile phones have more advantages. At present, the competition among AR/VR terminal manufacturers has shifted from a single hardware product competition to a multi-dimensional competition in sales channels, marketing strategies, content layout, and supply chain costs.

9: The manufacturer landscape is facing a reshuffle

In the first three quarters of 2023, Pico's shipment share in China's VR market reached 58.5%, ranking first in the first three quarters; in the AR market shipments, Xreal, Thunderbird, and Rokid accounted for more than 70%, and the rankings changed from quarter to quarter. It is worth noting that this year is also a difficult year for Chinese AR/VR manufacturers. Several leading manufacturers have successively faced many problems such as layoffs, structural adjustments, capital chain difficulties, and even withdrawal from the market. In 2024, overseas leading manufacturers are expected to enter the Chinese market, Apple's new products will enter the market strongly, and mobile phone manufacturers' new AR glasses are ready to go. The competition landscape of manufacturers in the Chinese market is full of variables.

10: The progress of the unification of domestic virtual reality industry standards will continue to accelerate

In recent years, the Ministry of Industry and Information Technology and other units have repeatedly issued documents such as the Action Plan for the Integration and Development of Virtual Reality and Industry Applications, promoting the unification of industry standards from many aspects such as basic generalization, content production, content classification, and testing and evaluation. Compatibility difficulties, format differences, and high costs are still problems that the entire industry needs to solve together. In 2024, the progress of the unification of domestic virtual reality industry standards will continue to accelerate.