(Report producer/analyst: Zheshang Securities, Jiang Gaozhen, Miao Xiaohan)
1 Review: interactive iteration + content upgrading, the evolution of previous generations of popular products into "double engines"
After more than ten years of development, the consumer electronics industry has led nearly two decades of functional innovation and industrial iteration process on the basis of many phenomenal products such as notebooks, smart phones, tablet computers, TWS headsets, smart watches/bracelets and other wearable devices.
From the core characteristics, the most revolutionary of several generations of popular products in consumer electronics are: 1) the comprehensive subversion of interactive forms; 2) continuous upgrading of information presentation; 3) A series of "side tasks" such as lightweight and convenience.
Taking smart phones as an example, the interaction form is upgraded from traditional physical button interaction to multi-finger touch screen interaction, and the information presentation is upgraded from one-dimensional text information based on SMS and calls to two-dimensional information based on images and videos, becoming the vanguard of completing the "main task". Thin and light notebooks, tablets, TWS headsets, smart watches and other products are all shouldering the historical mission of promoting "side tasks" such as lightweight and convenience in addition to the main line upgrade tasks. These popular products jointly construct the current product pattern of consumer electronics terminals with information visualization, interactive command, and light form.
2 MR terminal: a new carrier for interaction + content to continue to evolve
MR stands for Mixed Reality and is an important part of the Extended Reality (XR) (XR) terminal. Compared with VR virtual reality, which has a history of development for several years, MR requires a step further in the integration of virtual environment and real environment, and more integration of various virtual objects and images based on the background of real environment. Therefore, compared with the construction of VR to virtual reality, MR will emphasize more possibilities at the level of interaction and other aspects.
2.1 Interaction form: fingertip interaction→ behavioral interaction
From the perspective of interaction upgrade: Although the development has been relatively mature through the upgrading of screens, cameras, touch capacitor devices, display touch driver chips (TDDI) and other components, multi-finger touch is still limited to local interaction of the hand, finger gestures are always limited to the plane range of the mobile phone screen, and the recognizable actions are still concentrated in simple commands such as tapping, selecting, dragging, two-finger telescopic, and knuckle tapping.
From a long-term perspective, space-based behavioral commands, such as shaking wrists, waving arms, marching forward, body extension or rotation, and even eye gaze movement, are expected to become a clear development direction for consumer product interactions, and the application of new sensors such as high-end perception cameras and eye-tracking modules is expected to accumulate.
2.2 Content: Two-dimensional flat image → three-dimensional spatial vision
From the perspective of content upgrading: Smart phones upgrade the one-dimensional presentation of information (SMS, calls, etc.) in the traditional mobile phone era to two-dimensional content including images, videos, and animated expressions, and realize the first upgrade of content presentation through visual SDK design.
Since then, the upgrade of the content side may continue to maintain the further exploration from two-dimensional image content to three-dimensional visual content.
Taking office scenarios as an example, online meetings in the mobile phone era are mainly based on two-dimensional image video output, with voice transmission. On the next-generation terminal, online action communication, including virtual handshake, visual chart display, multi-person collaborative physical model construction and other functions are expected to become a reality.
The realization of these scenarios requires more accurate and real-time perception of users' 3D actions, and the application of new technologies such as lidar and behavioral awareness modules will provide more effective assistance for such functions.
2.3 MR vs VR Comprehensive Comparison: The Battle for the Next Generation of Core Information Platform
As a pioneer of XR lines, VR has made many attempts at the technical and market levels. Recently, new VR hardware products have been released, and the display combination of Fast LCD + MiniLED backlight is still the mainstay, and some Micro OLED/eye tracking/color perspective functions have begun to be initially applied.
According to Qingting.com statistics, from 2022 to early 2023, more than 90% of the equipment released (or announced the prototype plan) still use LCD screens or LCD + MiniLED backlight module display solutions, and a few brands have begun to use OLED/Micro OLED display but the general price level is higher. In addition, eye tracking/color perspective VST is gradually beginning to be used.
MR is more demanding than VR devices for new applications such as screen display, eye tracking/adjustment, and color perspective.
The core difference of MR is the better integration of virtual reality and augmented reality environment, in order to narrow the visual gap between the two scenes, VR mode pursues a clearer and brighter display effect, AR mode pays more attention to the accurate restoration of real scenes, so Micro OLED and high-definition full-color perspective and other links are expected to become the core components of MR equipment. In addition, in order to accurately link VR/AR modes, visual tracking and adaptive adjustment functions based on eye activity will become an important bridge to connect the two scenes.
2.3.1 Micro OLED vs LCD + Mini LED backlight: a potential iteration of high-definition display
From 2022 onwards, new VR devices will adopt Pancake folding optical path design to achieve significant lightweight and miniaturization. From the perspective of physical optical laws, screen light fixation requires a sufficient distance of optical paths to form a clear image in the retina of the human eye.
The traditional Fresnel lens solution is realized through a series of complex lens groups, and the Pancake module light folding carrier is upgraded from the lens group to the optical film, thereby reducing the weight of the overall device. Considering that light travels in the solid film with a higher light loss than the lens group, the need for a higher brightness screen is on the horizon.
To achieve higher brightness screen display, usually using Mini LED backlight or Micro OLED. Mini LED backlight improves the brightness of the screen by reducing the size of the lamp beads and accommodating more lamp beads under the LCD screen, and is currently gradually used in new VR products represented by Meta Quest Pro; Micro OLED, also known as silicon-based OLED, is an emerging display technology for the preparation of active light-emitting OLED devices on monocrystalline silicon wafers.
Different from the glass substrate used in conventional LCD and OLED, the substrate of Micro OLED uses a single crystal silicon wafer, which can achieve a smaller display area on the basis of maintaining similar resolution, which in turn enables it to achieve higher pixel density (PPI), and has the advantages of thinner and lighter, smaller power consumption, high luminous efficiency, and self-illumination.
At present, the mass production of Micro OLED is still in its infancy, the actual cost is high, we expect that the stand-alone ASP is more than 1,000 yuan, and there are still bottlenecks in the technical link that need to be broken, so only some high-priced benchmark products have been initially explored.
The demand for screen resolution, luminous efficiency and lightweight of MR products is expected to promote Micro OLED display technology to continue to break through the shackles, so as to achieve rapid cost reduction by increasing scale.
At present, the main force of the global Micro OLED layout is still dominated by overseas companies, and domestic companies are accelerating their efforts.
Samsung is continuing to increase investment in Micro OLED display technology, LGD is cooperating with Meta and SK Hynix to develop Micro OLED production line, aiming to provide micro display solutions for XR, Sony related products are expected to be actually mass-produced in the near future; Domestic manufacturers BOE, Qingyue Optoelectronics, Shiya Technology, Kunshan Mengxian and other companies also have relevant layouts, and are all in the sample stage, and are expected to follow MR products to successively spread goods to achieve a volume list.
2.3.2 Full color perspective: the functional basis of mode switching
High-definition full-color perspective is an important watershed for VR and MR devices, and it is also a key function for the continuous advancement to AR in the future. Full-color perspective, also known as full-color VST (Video See-Through), captures the real visual scene through several high-definition cameras mounted on the device, and superimposes a variety of virtual reality objects or windows on this scene to achieve the purpose of MR hybrid interaction.
The current loading/calling rate of full-color perspective function on VR devices is relatively thin, and it is expected to increase the frequency of use in future MR.
In fact, there are fewer categories equipped with color transparency function in the city model, and only a few models such as Meta Quest Pro, Pico 4, and iQIYI FUN MIX are equipped with full-color See-Through, and the call to the color perspective function in consumer products is mostly used for the safety boundary confirmation stage when booting, and the frequency of use is relatively thin.
In MR products, due to the switching of different modes, the use of color transparency function will be greatly increased, and the call to the camera is expected to reach the same length of time as the screen. Therefore, in order to achieve the smooth switching of VR/AR mode by MR devices, whether to equip high-definition full-color perspective function will become an important indicator to distinguish them from traditional VR devices.
The hardware basis of the full-color perspective function is a high-definition color camera, VR is currently dominated by 1-2 pieces, and MR may continue to improve.
The device mainly captures scenes through high-definition cameras, and currently equipped with solutions including monocular color transparency and binocular color transparency, which is closer to simulating the binocular perspective than monocular, thereby extracting visual depth information.
According to the disassembly of Wellsen XR and the official publicity of each company, the Pico 4 in the existing category adopts a monocular perspective scheme of a 16-megapixel camera, with no depth information; Quest Pro uses binocular SLAM of 2 monochrome cameras + monocular overlay perspective of 16 million pixel color cameras, which can extract depth information through the parallax of 2 monochrome cameras; QIYU MIX uses two 16-megapixel color cameras to achieve binocular color transparency, which can directly extract depth information.
In summary, most of the existing VR color transparency camera specifications are concentrated in 16 million pixels, and the number is mostly 1-2 (Quest Pro with black and white depth is 3).
MR equipment Due to the stricter requirements for capturing the real environment, the application of high-definition color cameras is expected to be more extensive, and the resolution is expected to increase to more than 20 million pixels, and the number may be increased to more than 3.
The full-color perspective function puts forward new requirements for camera accuracy, and further demand for MR equipment is expected to promote domestic manufacturers to fully benefit. At present, mainstream suppliers of mainstream VR equipment CIS (including color and black and white depth) include Sony, Haowei, Gao Wei, etc., and module packaging suppliers include Sunny and Qiu Tiwei.
After the further increase in MR equipment, due to the consistent multi-supplier strategy of typical brand manufacturers such as Apple, domestic manufacturers may further increase their market share.
2.3.3 Automatic stepless interpupillary distance adjustment + eye tracking vs manual interpupillary distance adjustment: an effective way to improve body sensation
When the human eye captures information, the binocular system perceives depth information through parallax information, and then makes the human eye have the ability to judge the distance of objects. When the visual image information is perceived, the matching degree between the human eye interpupillary distance and the optical image display device will seriously affect the imaging quality. XR devices due to the characteristics of screen display + lens imaging, if they fail to adapt to the user's interpupillary distance differences, it may cause graphics distortion, visual fatigue and dizziness.
At present, the relevant interpupillary distance adjustment module has begun to be introduced in VR equipment, and the position and deflection angle of the binocular lens are adjusted through the microdrive motor system to adapt to the difference in interpupillary distance of different users.
At present, it is roughly divided into three categories according to the degree of intelligence:
1) Manual knob type interpupillary distance adjustment: mainly through the physical knob of the fuselage manual adjustment, generally divided into several gears, so only support fixed distance adjustment, such as Meta Quest 2 58mm/63mm/68mm gear, etc., the adjustment accuracy is relatively rough;
2) Manual electronic stepless adjustment: through the built-in software module of the system, the user can adjust the infinitely within a certain interpupillary distance range through the electronic transmission according to the image clarity in the SDK, such as the 58-72mm adjustment range of Pico 4, the accuracy is significantly improved, but manual operation is still required, which is greatly affected by the user's actual visual error;
3) Automatic stepless adjustment with eye tracking: The optimal route of some high-end VR products and future MR equipment automatically and accurately detects the user's interpupillary distance through the eye tracking module, and links the microdrive motor system to automatically adjust the lens position.
In addition to interpupillary distance adjustment, the application of eye tracking systems also relieves the computing pressure of MR device image rendering.
At the current stage, due to the limitations of the overall computing power of XR equipment and the power consumption of the whole machine, it is difficult to render 4K imaging on full-screen images. The Foveated Rendering function implemented by the eye tracking module can render the user's foveated point in high definition, and relieve the pressure on the computing power caused by full-image rendering under the premise of less impact on the imaging effect by blurring the edge image.
The anti-deformation ability of materials in high-heat scenes is an important reference dimension for brand owners when choosing interpupillary distance adjustment modules.
The interpupillary distance adjustment module is essentially a precision micro-drive system, which belongs to the traditional advantage track of manufacturers in Japan, Germany, Taiwan and other regions, and related suppliers include Nidec, German IMS, etc. Due to the high computing power and large calorific value of XR equipment, the anti-deformation ability of precision transmission related materials in high-heat scenarios will be an important reference index, and the domestic supplier Zhaowei Electromechanical has entered the supply chain of many VR brands with its outstanding accumulation in this aspect, and its technical advantages are expected to be further highlighted in the MR terminal.
There are fewer domestic standards at the eye tracking module level, and related testing equipment manufacturers have a domestic layout. At present, the B-end high-end models equipped with eye tracking modules, such as Meta Quest Pro, etc., Sony PSVR2 has become the first exploration of eye tracking technology in the consumer market. At present, eye tracking module suppliers are mainly foreign, such as Swedish supplier Tobii, etc., and domestic testing equipment manufacturers are the mainstay, including Kerui Technology.
2.3.4 Finger Sleeve/Ring Control vs Handle Control: An Important Evolution of Interactive Upgrades
As a new generation of information carrier, MR equipment has upgraded its interaction mode with users, which is an important performance of its advanced upgrading after the previous generation of devices such as smartphones. At present, VR terminals represented by typical products such as Meta Quest 2/Pro and Pico 4 mainly use the controller for command input and vibration and other output feedback.
Taking Pico 4 as an example, its handle is equipped with a topological-like ring structure, using a total of 20 infrared LEDs to ensure no dead angle tracking; The motherboard integrates Bluetooth chips, power management chips, etc., and also uses a linear motor with a wider vibration frequency to simulate more force feedback. However, in the MR scenario where the interaction with the real environment is closer, the design of the handle type still has problems such as gesture interaction relying on physical buttons, and the handle grip does not match the hand shape in the real scene.
In order to solve the shortcomings related to the controller controller, some head MR companies are developing a ring/finger sleeve interaction design equipped with a tactile sensor.
Taking Apple as an example, according to the USPTO data of the United States Patent and Trademark Office, Apple is developing a retractable electronic ring/finger sleeve to control external devices, which can be worn on one or more fingers, and can detect input information through touch sensing devices, and output a variety of corresponding commands to external electronic devices according to preset touch input commands.
According to the patent, the device is made of deformable materials such as metal, worn on the top of the finger, and the fingertips are exposed, ensuring that the user can touch the surface of the object as usual. The device integrates force sensor, accelerometer, gyroscope, optical sensor, touch sensor, status indicator, etc., using capacitive inductance technology to accurately determine the user's finger movement and interaction with the surface of the object, accurately detect the force of the user's pressing surface and the exact direction of the force, and can identify the press input, lateral finger movement input and tapping input.
2.3.5 Full-body motion capture and tracking perception: key weights for functional completion
Motion capture is the core way for MR devices to accurately nest virtual VR images in real or semi-virtual scenes. Among the existing VR terminals, represented by the Meta Quest series of devices, an avatar system called "Avatar" has been established to realize the construction of primary virtual forms.
However, the limitation is that at present, it only supports the capture and recognition of upper body movements, and the face and expression construction of the virtual image are still far from the "vivid image".
In view of the high interaction between users and the real environment in MR scenes, the capture of only upper body movements may produce a strong "tearing feeling", which seriously affects the user's use of body feeling, so the capture of full-body motion images including the lower body is expected to become one of the key perception directions of MR equipment.
There are two main mainstream solutions for full-body motion capture: external or built-in.
First, through the external tracker, the device is tied to key areas such as limbs to achieve motion tracking, and VIVE has launched a related VR tracker; The second is motion capture through the built-in camera of the terminal with the help of recognition of depth information and bone movement.
In comparison, the external tracking method may have a better capture effect at this stage, but the external tracker needs to be purchased additionally, the current VIVE tracker unit price is 1099 yuan, according to the standard configuration of the limbs, the total price of the set exceeds 4000 yuan; Sony's Mocopi portable full-body motion capture set launched at the end of 2022 has a total of 6 zone sensors, with a total price of 49,500 yen (about 2,550 yuan), which may bring additional purchase pressure to users; the solution of built-in camera in the terminal in the current stage in addition to lens accuracy limitations, but also need image recognition rendering algorithms to assist, the actual effect in the short term may have shortcomings, but with the accumulation of relevant data and technological progress, the long-term perspective is expected to remain the mainstream route of MR equipment.
According to Avatar Poser, an open-source project jointly published by ETH Zurich and the Meta Virtual Reality Lab, it has achieved full-body motion capture based only on the signals input from the three sensors of the headset and the controller.
2.3.6 Lidar: Efficient Blinding for Perceptual Evolution
The application of lidar in mainstream consumer electronics devices begins with functions such as ranging and focusing and face recognition in smartphones. Taking Apple as an example, since the iPhone 12 Pro series, lidar sensors have begun to be widely installed, using laser emitters to project matrix beams, capture and draw location depth maps, etc.
In the XR field, Apple's previously launched augmented reality development platform ARKit can create a more realistic AR experience by directly calling the lidar on the iPhone and iPad to deeply perceive the environment.
At the all-in-one level, the current stage is limited by the overall more expensive cost, the installation of lidar is still in a very early stage, the European brand Varjo released at the end of 2022 for professional users XR-3 Focal Edition for professional users for lidar-related configuration, but the price is as high as 6495 euros. At present, there is no mature all-in-one brand with lidar configuration in the consumer VR market.
The XR terminal is equipped with lidar to effectively blind the camera perception.
The pattern captured by the camera has more accurate, native contour and color information, but the perception ability in low-light night environments is greatly reduced; In addition, in order to accurately perceive distance/depth and other information, the hardware configuration number + software-side depth of field algorithm is optimized, so that the camera as the XR only perception sensor has greater security risks.
LiDAR perceives the distance and shape of objects by calculating the time difference between laser emission and foldback, which is not affected by factors such as lighting environment and visibility, and has a wide range of application value in equipment such as MR that interact with the external environment intensively.
MR's new configuration of lidar can form a full linkage with existing consumer electronic devices and open up a channel with the original ecology.
Taking Apple as an example, in recent years, among the new high-end iPhone models, lidar has become the standard, and a series of mature applications such as rangefinder, face recognition, night vision focus, and Memoji virtual image creation have been derived successively, which can promote the seamless connection between new devices represented by MR and the original ecology, while greatly enhancing the perception efficiency and accuracy of new terminals.
At present, consumer-grade lidar suppliers are mainly overseas, mainly including II-VI and Lumentum (design) in the United States, Wenmao (foundry) in Taiwan, and Sony in Japan.
2.4 Sufficient reserves + C-end sinking, the vast blue ocean of MR equipment
On the basis of VR terminals focusing on building virtual scenes, MR devices focus more on the interaction between virtual and real scenes, which is an important springboard for moving towards perfect AR technology in the future.
At present, through years of accumulation and precipitation, overseas leading technology companies have a number of specific technologies that can provide substantial contributions.
Taking Apple in the United States as an example, according to the USPTO data of the United States Patent and Trademark Office, as of the end of February 2023, searching for "mixed" and "reality" respectively (only supports single word search, in order to avoid confusion does not use the "MR" field search), the company's counterpart technology related to thousands of patents, including portable device image interaction algorithm (patent number US-11592952-B2), Optical fiber lighting of optical emitters (patent number US-20230034270-A1), wearable ring/finger sleeve control (patent number US-20200241641-A1), etc., involving MR software algorithms, perception, control, interactive recognition and other subdivisions.
In the early stage, MR was mainly positioned as enterprise-level commercial enterprises.
At present, Varjo and other manufacturers have released MR or quasi-MR items, the price is more than thousands of dollars, and they are all positioned as enterprise-level products. Head companies choose to start with enterprise-level requirements, or motivated by:
1) New products involve multiple technological innovations, and compared with the consumer market, enterprise-level customers have a higher acceptance threshold for breakthrough innovations but immature technologies, which is convenient for brand manufacturers to promote new technologies in the early stage;
2) Limited by the maturity of new technologies and yield constraints, the initial product cost and selling price are high, and the price sensitivity of enterprise-level customers is relatively low;
3) In the early stage, MR focuses more on productivity scenarios and is more in line with the needs of enterprise-level customers;
4) After forming stable cooperation with enterprise-level customers, it is more confident to achieve cost optimization through large-scale production.
Following the initial B-end exploration, the C-end consumer market will become a battlefield for major manufacturers to compete fiercely, and MR products have sufficient potential to compete with smartphones and change the habits of consumer-level users.
From feasibility considerations:
1) The digital economy has spawned many individual users for productivity purposes, and the accumulation of MR products in B-end productivity scenarios highly matches the vital needs of this group of people, which is expected to release more demand exposure;
2) MR products themselves are also iterating functions to meet the typical needs of consumer markets except for business/productivity scenarios, such as social networking and entertainment, and their interaction, perception and display upgrades are expected to significantly solve the shortcomings of traditional VR products such as single interaction and reliance on physical controllers.
From necessity considerations:
1) Content side - Compared with smartphones, which upgrade information from one-dimensional text and calls to two-dimensional images and videos, MR equipment is the most likely terminal and carrier for the whole industry to continue to upgrade Internet content to three-dimensional spatial vision in the short term, and then form a virtuous circle of feeding back hardware from the 3D content side;
2) Form end - smart phones have completed the mission of upgrading physical button interaction to multi-finger touch screen interaction, and MR devices are expected to further upgrade two-finger plane interaction to three-dimensional action interaction including gestures, which is most likely to achieve further upgrading of user experience in the short term.
3 OEM + components + testing equipment
Domestic enterprises layout MR industry chain focuses on the whole machine foundry, perception/control module and testing equipment line, it is recommended to focus on: Luxshare precision (whole machine foundry), Zhaowei electromechanical (interpupillary distance adjustment), Zhicube (sensor detection), precision testing electronics (display detection), Rongqi Technology (lens detection), etc.
1) Complete machine foundry: The potential foundry suppliers in the global MR market are mainly Taiwanese enterprises, such as Hon Hai, Pegatron, Quanta, etc. Among Chinese mainland enterprises, Goertek has a high share in VR foundry lines; Based on years of cooperation experience with North American major customers in consumer electronics, Luxshare Precision is expected to continue to focus on MR foundry industry.
2) Perception/control module: The main business of domestic component suppliers is distributed in the electrodeless interpupillary distance adjustment and color transparency/perception related camera lines. The interpupillary distance adjustment line is recommended to focus on Zhaowei Electromechanical, and the stable material deformation resistance of the company's products in high heat scenes is expected to become a key reference index for brand manufacturers when selecting suppliers; Camera perception line, it is recommended to pay attention to Gao Wei Electronics, the company is expected to gain a large market share in the head MR equipment.
3) Testing equipment: domestic manufacturers mainly focus on sensor detection, display detection and imaging detection. It is recommended to focus on ZhiCube (MR sensor detection), Huaxing Yuanchuang (Micro OLED display detection), Jingtest electronics (display detection), Rongqi Technology (lens detection), Jept (optical imaging detection), Kerui Technology (eye tracking module detection), etc.
4 Risk Warning
The progress of leading brand products is less than expected: the release of overseas top brand MR equipment has been delayed many times due to technical factors, and if there is a continued delay, it may have an impact on the shipment progress and performance fulfillment of relevant industry chain companies;
Market demand is less than expected: MR is positioned in the enterprise-level market in the early stage, and the consumer-grade market is still in the cultivation stage, and the overall demand may be affected by the actual experience effect or the subsequent cost reduction progress less than expected.
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