The growth of the metaverse will drive an increasing number of companies to participate in the build-out of the virtual world, with use cases such as social communities, gaming/entertainment, content creation, virtual economy, and industrial applications all becoming important points of focus in the coming years, according to TrendForce’s latest investigations. Apart from increases in both computing power of semiconductors and coverage of low-latency, high-speed networks, the metavere’s development will also depend on the adoption of AR/VR devices by end users. TrendForce expects global AR/VR device shipment for 2022 to reach 12.02 million units, a 26.4% YoY increase, with Oculus and Microsoft each taking leadership position in the consumer and commercial markets, respectively.
TrendForce further indicates that the success of AR/VR devices in the consumer and commercial markets will be determined by their retail prices and degree of system integration, respectively, while these two factors are also responsible for leading companies’ continued competitive advantages. However, gross and net profit considerations regarding AR/VR hardware have made it difficult to not only price these devices competitively, but also increase the volume of AR/VR device shipment.
Even so, the growing popularity of the metaverse will drive more and more hardware brands to enter the AR/VR market and push online service platform providers to either directly or indirectly propel the growth of the hardware market in 2022. Regarding the consumer market, AR/VR device suppliers may look to expand their user base and increase their market penetration via low-priced yet high-spec devices, while compensating for their reduced hardware profitability through software sales. Oculus, for instance, has adopted such a strategy to maintain its advantage in the market, thereby raising the market share of the Oculus Quest products to a forecasted 66% next year.
Regarding the commercial market, there has been a growth in applications ranging from remote interactions and virtual collaborations to digital twins; hence, enterprises have become increasingly willing to adopt AR/VR devices. Compared to the consumer market, which is mainly driven by products with low prices and high specs, the commercial market is comprised of enterprises that are more willing to choose high-priced and high-performance products, although such products must be paired with a full system integration solution or customized services. Possessing substantial competency in the industrial ecosystem, Microsoft enjoys a relatively large competitive advantage in the commercial market, as the company’s HoloLens 2 became one of the few commercial AR devices with an annual shipment exceeding 200,000 units this year.
It should also be pointed out that, given the rapid advancements in high-speed 5G networks, video-based remote assistance applications enabled by low-priced AR glasses and 5G smartphones’ computing and networking functions will become yet another commercial AR/VR use case. TrendForce believes that these applications can serve as a low-cost, easily deployable early trial that will not only raise enterprises’ willingness to adopt more AR/VR commercial applications going forward, but also accelerate the development of commercial services related to the metaverse.
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