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China to lead global market for VR and AR headsets, IDC says

Worldwide shipments of AR and VR headsets forecast to reach 76 million units by 2020, up from estimated 10.3 million this year

PUBLISHED : Wednesday, 21 December, 2016, 7:30am
UPDATED : Wednesday, 21 December, 2016, 10:08am

China is on pace to become the world’s largest market for virtual and augmented reality headsets by 2020, as major domestic suppliers emerge and the application of these devices expands to various industries, according to technology research firm IDC.

“The United States may lead in [developing] the technologies, but China is going to lead in terms of usage scenarios,” IDC China research manager Neo Zheng told the South China Morning Post on Tuesday.

“Apart from the video games sector, VR and AR headset vendors in China attach great importance to education, as well as the real estate, manufacturing, design and healthcare sectors,” he said.

Data from IDC showed that shipments of virtual reality (VR) headsets in China are forecast to reach 15.5 million units in 2020, up from an estimated 609,000 this year.

VR immerses a user in an imagined world, like in a video game or movie, with the aid of an opaque headset, such as Google’s Daydream platform and Gear from Samsung Electronics.

Shipments of augmented reality (AR) headsets, meanwhile, are expected to grow to 2.8 million units in 2020 from around 3,000 this year on the mainland.

AR provides an overlay of high-resolution digital imagery onto the real world with the use of a clear headset, like Microsoft’s HoloLens.

IDC said the shipment estimates excluded simple headsets that have no built-in technology, such as Google Cardboard and similar devices which use a smartphone as a viewer.

It predicted total AR and VR headset shipments worldwide to hit 76 million units by 2020, up from an estimated 10.3 million this year.

“In 2016, VR makes up about 99 per cent of that headset market in China,” Zheng said.

Alibaba Group demonstrated during its annual 11.11 global shopping festival on Singles’ Day that VR headsets could also help promote online retail.

New York-listed Alibaba, which owns the Post, sold about 150,000 Cardboard-like VR headsets for 1 yuan (HK$1.12) apiece through its Taobao Marketplace platform in the 11 days leading up to the November 11 event.

Through Alibaba’s “buy+” VR shopping program, mainland consumers browsed products from a number of overseas retailers, including Macy’s, Costco and Target, using the basic VR headsets. When a user focuses on an item in a shop, a three-dimensional view of the product appears, as well as its price and a short description.

According to Forrester Research, Alibaba integrated Alipay to enable customers to check out items within that VR environment.

Zheng pointed out that there are currently more than 100 start-up VR headset suppliers on the mainland, where they will compete against new devices from established smartphone companies.

“Start-ups like 3Glasses, Deepoon, Pico, Pimax and Hypereal are among the VR vendors which have developed a following in the market,” Zheng said. “We also see plenty of opportunities for the major Chinese smartphone vendors, including Lenovo Group, Huawei Technologies and Xiaomi, in the VR headset market.”

Microsoft said earlier this month that HoloLens will be available in China next year. The software giant's so-called mixed reality specification will also power new headsets to be released next year by hardware partners such as 3Glasses, Lenovo, Dell and Acer.