On April 26, 2022, Goertek announced its financial results for the first quarter of 2022. In the first quarter, Goertek achieved revenue of 20.112 billion yuan, an increase of 43.37% year-on-year; among them, the intelligent hardware business, including VR equipment, grew rapidly, increasing by 125.05% year-on-year to 10.144 billion yuan, accounting for 50.44% of the total revenue.
As a leading VR/AR hardware enterprise, goertek's revenue growth and the proportion of revenue of each business also reflect the development of the VR/AR industry to a large extent. According to IDC data recently released, the global AR/VR headset shipments in 2021 were 11.23 million units, an increase of 92.1% year-on-year. Among them, the shipment volume of VR headset reached 10.95 million units, breaking through the important inflection point of the industry with an annual shipment of 10 million units. It is expected that the shipment volume of VR headsets will reach 15.73 million units in 2022, an increase of 43.6% year-on-year.
1. Business lines trade between them
Obviously, in the context of the growing shipments of VR/AR hardware, Goertek is accelerating the expansion of the scale of VR-related hardware business to seize the dividends of the next generation of intelligent terminal popularization. The end of an era always means the beginning of a new era, as for this new era is all VR/AR, industrial capital is giving answers with practical actions.
Judging from the information disclosed in Goertek's financial report, the company's main business is currently composed of three major businesses: precision components, intelligent acoustic machines and intelligent hardware. Among them, the main products of the precision components business include acoustics, optics, microelectronics, structural parts, etc.; the main products of the intelligent acoustic machine business include wired headphones, wireless headphones and smart speaker products; the main products of the intelligent hardware business include VR virtual reality/AR augmented reality, smart wearable, smart home electronic game consoles and accessories, smart home, etc.
In the first quarter of 2022, the two businesses of intelligent hardware and intelligent acoustic machine accounted for 50.44% and 32.16% respectively, totaling more than 80%, which is already the two largest businesses of Goertek. Among them, the growth of intelligent acoustic machine business mainly comes from the contribution of Apple's Airpods, while the growth of intelligent hardware is mainly driven by AR/VR headset devices represented by Meta Company Oculus and Sony's PS game consoles.
In contrast to smart hardware, which accounts for a growing share of revenue, is the precision components business, which has a declining proportion. In the first half of 2018, Goertek's precision components business revenue accounted for 48%, and in the first half of 2019, it was only 29%, and the proportion of revenue fell almost off a cliff.
2. The alternation of old and new eras
The reason is that the main products of Goertek's precision components business are MEMS, mic and other electronic devices, and its largest downstream application area is in mobile phones. From the perspective of industry trends in recent years, the growth of the global smartphone industry has slowed down significantly, with global smartphone shipments of about 1.35 billion units in 2021, a slight increase of about 5.3% year-on-year.
Goertek 2021 earnings report
In contrast, emerging smart hardware products represented by VR/AR headsets, smart wireless headsets, smart wearables, and smart homes are growing rapidly. Even if you don't look at the year-on-year growth rate of 125.05% in the first quarter of 2022, goertek's intelligent hardware as early as 2020 and 2021, revenue year-on-year achieved high growth rates of 107.34% and 85.87%, respectively, which is the fastest growing sector of Goertek.
There is no doubt that whether it is the precision component business rooted in the era of smart phones or the intelligent acoustic machine in the transition period, it is making way for VR/AR hardware products, and Goertek intends to shape it as a new engine for its own performance growth. Goertek has also publicly responded that with the rapid growth of the smart hardware business, its proportion is likely to continue to increase.
In addition, it is worth mentioning that Pico, a VR headset manufacturer closely related to Goertek, recently raised its VR equipment shipment target this year from 1 million units to 1.8 million units. If Goertek's previous intelligent hardware business growth benefited from long-term orders with international customers such as Meta and Sony, then in the future, with the rise of domestic VR/AR manufacturers represented by Pico, the business scale of Goertek is expected to usher in further growth, which has a very large imagination space.