In June 2023, Apple introduced its inaugural spatial computing device, the Apple Vision Pro, entering the mixed reality (MR) landscape. On January 8th, 2024, Apple revealed on its official website that the Vision Pro would be available for pre-orders in the United States starting January 19th, with an official release date of February 2nd.

According to Apple’s official news release, Apple’s CEO Tim Cook has indicated as follows: “The era of spatial computing has arrived. Apple Vision Pro is the most advanced consumer electronics device ever created. Its revolutionary and magical user interface will redefine how we connect, create, and explore.”

In June 2023, at the WWDC (Worldwide Developers Conference), Apple unveiled its head-worn device, the Vision Pro, priced at USD 3,499. This cost is over three times the price of Meta’s high-end virtual reality (VR) model, the Quest Pro, at that time.

To bolster the ecosystem behind Vision Pro in the realm of mixed reality, Apple has made comprehensive preparations. In June of last year, the company announced the launch of new software tools and technologies, enabling developers to craft app experiences tailored for Vision Pro. Additionally, Apple established developer labs in California, London, Munich, Shanghai, Singapore, and Tokyo.

Considering factors such as pricing and the absence of certain essential features, TrendForce has previously anticipated a modest shipment volume of approximately 200,000 – 400,000 units for Apple Vision Pro in 2024.

The market’s response will heavily depend on the subsequent introduction of consumer-oriented Apple Vision models and the ability of Apple to offer enticing everyday AR functionalities that will drive the rapid growth of the AR market as a whole.

TrendForce also noted that the Apple Vision Pro boasts cutting-edge hardware specifications and innovative design. However, a substantial price tag of USD 3,499 and the requirement for an external power source to operate for a mere two hours pose challenges to consumer adoption.

Currently, the Apple Vision Pro lacks sufficient applications for mainstream users, making it more attractive to developers and enterprise customers who can capitalize on its innovative features to create diverse applications. Consequently, the higher price point of the product is justified.

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• [News] Apple Reportedly Accelerates Production of MR Headset “Vision Pro” for Potential February Launch
• [News] Apple Could Introduce Micro LED into Vision Pro, Replacing Existing Micro OLED Technology

(Photo credit: Apple)

At the WWDC 23 in June this year, Apple introduced its first headset, Vision Pro. The device is set to be available for purchase as early as next year, with a price tag of USD 3,499.

According to the report citing sources by Mark Gurman, Apple has accelerated the production of the MR headset “Vision Pro” in China in recent weeks, suggesting preparations for a potential launch in February next year.

Reportedly, insiders have revealed that in the past few weeks, Apple has been in full production mode for the Vision Pro in China. The goal is to have the customer-facing business department ready by the end of January, allowing the product to debut in Apple’s retail stores in February.

Additionally, Apple has been rumored to have sent an email to software developers lately, encouraging them to use the latest tools to test their applications and submit software for feedback, indicating preparations for the Vision Pro’s imminent release.

The report highlights that the Vision Pro is Apple’s most intricate product to date. Due to its customized components, it requires assembly and packaging at the sales point, necessitating a sales strategy and equipment different from those used in the past.

As per a report by the Financial Times in May of this year, Apple initially aimed for annual sales of 3 million units for the Vision Pro, but later reduced the target to 1 million units. In July, there were further reports that due to the complex design of the Vision Pro and issues with the display yield, Apple lowered the target shipment volume from 1 million units to 400,000 units.

Considering factors such as pricing and the absence of certain essential features, TrendForce has previously anticipated a modest shipment volume of approximately 200,000 to 400,000 units for Apple Vision Pro in 2024.

The market’s response will heavily depend on the subsequent introduction of consumer-oriented Apple Vision models and the ability of Apple to offer enticing everyday functionalities that will drive the rapid growth of the AR market as a whole.

TrendForce also notes that the Apple Vision Pro boasts cutting-edge hardware specifications and innovative design. However, a substantial price tag of USD 3,499 and the requirement for an external power source to operate for a mere two hours pose challenges to consumer adoption.

Currently, the Apple Vision Pro lacks sufficient applications for mainstream users, making it more attractive to developers and enterprise customers who can capitalize on its innovative features to create diverse applications. Consequently, the higher price point of the product is justified.

Read more

• Apple Vision Pro Estimated to Ship 200,000 Units in 2024, Concerns around Price and Battery Life Linger, Says TrendForce
• [News] Apple Could Introduce Micro LED into Vision Pro, Replacing Existing Micro OLED Technology

(Photo credit: Apple)

With Apple’s Extended Reality (XR) headgear, Vision Pro, set to hit the market early next year, Samsung is reportedly making diligent preparations to unveil its own XR product.

According to a report from Pulse News, the English version of the Korean Daily Economic News website, data released by the United States Patent and Trademark Office (USPTO) on the 14th indicates that Samsung Display has recently filed for a new trademark, “Flex Magic,” sparking rumors that it is intended for Samsung’s next-generation XR headset.

Samsung Display mentioned in its application documents that the universal applications of its display panel include 3D Spectacles, Virtual Reality Headsets, Virtual Reality Goggles, and smart glasses. The company had also applied for the same trademark with the European Union Patent Office in November.

While filing a patent does not guarantee the release of a product, the South Korean industry believes that Samsung Electronics has made significant progress towards unveiling a new product.

Reportedly, industry insiders in South Korea reveal that Samsung has set a goal to launch an XR device early next year, potentially entering a new frontier in competition with Apple. Initially named “Galaxy Glass,” this device was originally scheduled for a later release next year.

In February of this year, Samsung Electronics officially announced its entry into the XR market in collaboration with Google and Qualcomm. It is expected that Samsung Electronics will handle hardware development, Google will manage software, and Qualcomm will provide chipsets specifically for the XR platform.

Reportedly, industry insiders in South Korea anticipate that its primary competitor, Apple’s Vision Pro, is expected to launch in the United States in March of next year, followed by expansion into other countries, with a starting price of USD 3,499.

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• [News] TSMC’s CoWoS Demand Surges from NVIDIA, Apple, AMD, Broadcom, Marvell, Monthly Capacity Up 120% in 2024

In November 2023, Quanta, a Taiwanese electronics manufacturer, has announced a collaboration with the U.S. AR glasses technology provider Vuzix. Through the adoption of Vuzix’s waveguide technology and optical display components, Quanta is set to engage in mass production for smart glasses, with shipments expected to commence in 2024.

The contract manufacturer like Quanta has been strengthening its technical capabilities in the VR and AR domains in recent years, aiming to possess the capacity to provide comprehensive product solutions and seize opportunities in the flourishing virtual market.

TrendForce’s Insights:

1. Quanta Continues to Explore AR Glasses, Collaboration with Vuzix Aims for Expanded Applications

In recent years, Quanta has actively invested in the AR glasses sector, including collaborative efforts with STMicroelectronics in late 2020 to develop a reference design for AR glasses and a $20 million investment in the Israeli AR startup Lumus in 2021.

The ongoing partnership with Vuzix, planning for complete device shipments, underscores Quanta’s optimistic outlook on the application development and future business opportunities for AR glasses.

Given Quanta’s key product and service areas spanning mobile computing, home entertainment, IoT, and smart manufacturing, the current trend of the metaverse positions VR and AR devices as crucial gateways to enter and add value to these domains.

With Quanta transitioning from a device supplier to a platform service provider and implementing a comprehensive development strategy of hardware-software integration, the continued focus on AR glasses holds the potential to expand profit margins for Quanta.

Vuzix, in collaboration with Quanta, has secured a prominent position in the VR and AR device market through its wearable display technology. Notably, Vuzix has developed the world’s first Micro LED AR glasses and consistently received CES Innovation Awards from 2020 to the present year.

Their product highlights encompass AR technology for swim goggles, the establishment of a comprehensive smart glasses platform featuring microLED and waveguide technologies. The recently unveiled Ultralite S, focused on sports and fitness scenarios, seamlessly integrates with smartphones or smartwatches to display real-time activity data and information on the glasses, earning it the CES 2024 Innovation Award.

With Vuzix possessing critical optical technology and components across a broad product range, the collaboration aligns well with Quanta’s AR transformation, particularly enhancing Quanta’s QOCA telemedicine cloud platform in the medical field. The synergy between the two marks a harmonious and mutually beneficial partnership.

2. Contract Manufacturer Actively Strengthen VR and AR Tech Capabilities Through Collaboration and Investment to Seize Virtual Opportunities

In addition to Quanta, various contract manufacturers have been actively enhancing their technological capabilities in the VR and AR industry through collaborations, mergers, and investments. Notably, Foxconn has been investing in and collaborating with key players in the VR and AR device market since 2022, including XRSPACE, Varjo, and the early part of 2023 with Jorjin.

Looking at other contract manufacturers, GoerTek works with major clients like Meta, Sony, and PICO, Luxshare has Apple Vision Pro assembly orders, and Pegatron has handled products for Microsoft HoloLens and Oculus, while Quanta has been involved with Microsoft Mixed Reality Headset.

Therefore, for Foxconn and other companies aiming to enter this field, adopting more investment and collaboration strategies, or even directly acquiring key tech firms, will be the fastest way to rapidly strengthen their competitive position in the VR and AR market.

Looking at the overall supply chain of the VR and AR virtual device industry, the efforts of assembly plants to strengthen their technical capabilities go beyond providing assembly outsourcing. To a certain extent, this is also aimed at developing the ability to offer complete product solutions, catering to a broader customer base.

Given that these devices prioritize image precision and real-time capture, high-end products require more components and sensors. Moreover, the non-uniform design of head-mounted devices adds complexity to the assembly of VR and AR devices.

Additionally, not all companies have the resources and industry competitiveness, as in the case of Meta and Sony, to independently develop head-mounted devices from scratch. For many, obtaining a more comprehensive product solution and then making adjustments is a more practical approach. This necessitates contract manufacturers to have enhanced VR and AR technology and ODM capabilities. This way, amidst the flourishing opportunities in the virtual market, they can offer complete head-mounted device solutions.

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• [News] Apple’s Vision Pro Headset Set to Enter Mass Production, Chinese Supply Chain Expected to Contribute 60%

MediaTek announced a collaboration with Meta to develop its next-generation smart glasses chip. Since Meta has previously used Qualcomm chips for its two generations of smart glasses products, it is speculated that Meta’s expansion of chip suppliers is aimed at maintaining supply chain flexibility and reducing costs. MediaTek, in turn, is poised to leverage smart glasses to tap into opportunities within Meta’s VR/AR devices.

 TrendForce’s Insights:

1. Meta Expands Chip Collaboration Suppliers, Maintaining Product Development Flexibility and Potential Cost Reduction

In mid-November 2023, MediaTek hosted the overseas summit, Mediatek Executive Summit 2023, where it announced a collaboration with Meta to develop the next-generation smart glasses chip.

Meta’s first smart glasses, a collaborative creation with Ray-Ban in 2021, differ from the Quest series as they are not high-end VR devices but rather feature a simpler design, focusing on additional functionalities like music playback and phone calls.

In the fall of 2023, Meta introduced a successor product with significant improvements in camera resolution, video quality, microphones, and internal storage. This new device is designed to simplify the recording and live streaming process by integrating with Meta’s social platform. Additionally, the new product aligns with the trend of generative AI and incorporates Meta’s AI voice assistant based on Llama2 LLM.

Notably, the market has shown keen interest and discussion regarding MediaTek’s announcement on the collaboration with Meta, given that Meta’s previous two generations of smart glasses used Qualcomm chips, specifically the Qualcomm Snapdragon Wear 4100 for the older version and the AR1 Gen1 for the new version.

Analysis of Meta’s Motivation: Meta’s decision to collaborate with MediaTek may be driven by considerations of risk diversification among suppliers and overall cost reduction.

Firstly, Meta has been investing in the development of in-house chips in recent years to ensure flexibility in product development. Examples include the MTIA chip, disclosed in mid-2023, designed for processing inference-related tasks, and the MSVP, the first in-house ASIC chip for video transcoding, which is expected to be used in VR and AR devices.

Given Meta’s previous attempts, including collaboration with Samsung, to independently develop chips and move towards chip autonomy, the partnership with MediaTek can be seen as a risk mitigation strategy against vendor lock-in.

Secondly, considering that smart glasses, unlike the high-priced Quest series, are currently priced at USD 299 for both models, MediaTek’s competitive pricing may also be a significant factor in Meta’s decision to collaborate with them.

2. MediaTek Eyes VR and AR Device Market Opportunities Through Smart Glasses Collaboration with Meta

From MediaTek’s perspective, their focus extends beyond smart glasses to the vast business opportunities presented by Meta’s VR and AR devices. In reality, examining Meta’s smart glasses alone reveals estimated shipments of around 300,000 pairs for the older model. Even with the new model and the anticipated successor expected to launch in 2025, there is currently no clear indication of significant market momentum.

In practical terms, this collaboration with Meta might not contribute substantially to MediaTek’s revenue. The crucial aspect of MediaTek’s collaboration with Meta lies in strategically positioning itself in Meta’s smart headwear supply chain, challenging the dominance of the original chip supplier, Qualcomm.

Looking at global VR device shipments, Meta is projected to hold over 70% market share in 2023 and 2024. There are also reports of an updated version of the Quest device expected to be available in China in late 2024. If MediaTek can expand its collaboration with Meta further, coupled with the gradual increase in the penetration rate of VR and AR devices, significant business opportunities still lie ahead.

From an overall perspective of the VR and AR industry, the current design of headwear devices no longer resembles the early models that required external computing cores due to considerations of cost, power, and heat.

The prevalent mainstream designs are now standalone devices. Given that these devices not only execute the primary application functions but also handle and consolidate a substantial amount of data from sensors to support functions like object tracking and image recognition, VR and AR devices require high-performance chips or embedded auxiliary SoCs. This market demand and profit potential are compelling enough to attract chip manufacturers, especially in the face of the gradual decline in momentum in the consumer electronics market, such as smartphones.

The VR and AR market still holds development potential, making it a strategic entry point for manufacturers. This insight is evident in MediaTek’s motivation, continuing its market cultivation efforts after developing the first VR chip for Sony PS VR2 in 2022 and collaborating with Meta.