These companies will benefit from the big VR cash-splash

Consumers were expected to spend more than US$11 billion on virtual reality (VR) technology over the next few years, with some clear winners, a data analysis company said.

IHS Markit said in a report that users were expected to spend as much as US$7.9 billion on VR headsets and US$3.3 billion on VR entertainment by 2020, jumping from the US$1.6 billion IHS expected consumers to spend on headsets and US$310 million on entertainment in 2016.

As spending grows, IHS analysts predicted that the VR market would divide into two camps: makers of low volume, high-end VR headsets, such as Facebook‘s Oculus Rift, and makers of high volume, low-end VR headsets that use smartphones for their displays.

The smartphone VR headsets are expected to give the overall market a boost because of their large addressable user base for VR content and cheaper pricing. IHS Technology’s senior director, Ian Fogg, said this is where most of experimentation with VR content will happen.

There were several affordable options already out in the market.

Google, for example, this week introduced its next-generation smartphone VR headset, Daydream View. Two years earlier, the tech giant had unveiled its inexpensive, do-it-yourself VR headset called Google Cardboard.

Samsung has already introduced a few iterations of its Gear VR headset, while Chinese smartphone maker Xiaomi introduced a low-cost VR headset earlier this year.