Will Vision Pro turn the lights on for VR and AR?

By LU Keyan, XU Shiqi

For a long time, virtual reality (VR) companies in China have faced an awkward situation. The concept of the metaverse is hot, and equipment from big companies sells well. The industry always seems to have positive news, but most startups struggle to survive. There has been a lack of products with strong traction in the market, and investors have lost patience and shifted to AI.

That was until Apple released its mixed reality goggles Vision Pro. A number of VR companies told Jiemian News investors are now more “curious” about their products.

Hardware of breakthrough significance

LU Yifei is the co-founder of AR glasses maker INMO Technology. In his view, Apple's current VR headset is still in a transitional stage. He thinks Vision Pro is still relatively bulky, making it unsuitable for long-term wear and travel, with its external power supply. The ultimate goal is something much more akin to the ever-unpopular Google glasses.

The current AR/VR industry encompasses various forms and technological solutions, and manufacturers need to make choices regarding display performance, weight, and cost.

Apple’s hardware has breakthrough significance, particularly the Micro OLED+pancake optical display.

Micro OLED is thin, uses little power and possesses high luminosity, but its cost is much higher than mainstream and mature LCD screens. Vision Pro is the first product to use Micro OLED and the first to achieve single-eye 4K and dual-eye 8K resolution in a VR headset.

"It may change, if not end the fate, of PCs and many VR and even AR glasses with BB solutions," said Lu, referring to the “birdbath” optical solution, the norm for AR glasses.

But is it the iPhone moment?

VR company NOLO’s founder and CEO ZHANG Daoning said Apple's VR headset has raised the hardware threshold for entering the industry. Apple has combined the M2 chip brought from the MacBook with the R1 chip to create a performance benchmark that will be difficult to beat, he said.

Zhang said the expectation is that Qualcomm’s XR chips can match the M2+R1, which will determine whether Apple will maintain its dominance.

Should domestic VR manufacturers be anxious? Zhang thinks not. The headset is priced at over 25,000 yuan, and production capacity is limited. Most domestic VR manufacturers are focused on gaming and entertainment, which is far from the Apple's approach.

The emergence of Vision Pro blurs the boundary between AR and VR. MR (Mixed Reality) may be the future mainstream. But is it the “iPhone moment” for the industry? Maybe not just yet.

“Apple made revolutionary changes to the iPhone 4. Vision Pro is more like the first iPhone,” said Zhang. It is what it is: very powerful goggles. Very few in the industry are optimistic about sales volume. Most people will never even see the device in proper use, let alone fork out half a month’s salary for it.

Vision Pro is more like a wearable computer, said Zhang. It doesn't put too much emphasis on virtual content but provides developers with a development kit through its hardware and the Apple ecosystem.

Not playing about

From the presentation, Apple doesn't plan to turn it into a gaming console but instead on such office scenarios like meetings or remote working.

This leaves ample room for developers. Zhang said that the presentation provided NOLO with a lot of inspiration. In terms of applications and content, domestic companies can try to adapt to scenes such as meetings, commemorating loved ones, and 3D video.

During the presentation, Apple only one game appeared. Most of the examples focused on visual experiences such as watching movies on a big screen, recording and playing 3D videos, and generating virtual human figures.

“At this stage, XR is concentrated on gaming and video, whether it's on-demand or live streaming. Apple's devices far exceeds our original positioning of VR as pure entertainment,” said LI Hongbing, CEO of 4K Garden, a platform for ultra-high-definition technology application and content aggregator.

The high configuration of Vision Pro demands higher clarity in content supply. Li believes the most suitable content will be ultra-high-definition 8K and above live streaming, such as live sports events and music performances. On the other hand, film and television has a longer cycle, and although there are already existing 3D movies, they are still not interactive experiences.

Slumbering market

Li said that Vision Pro, like many of Apple's devices, will initially attract geeks and male users, and sports content will be the focus of their attention, such as the NBA and the World Cup.

Apart from the video field, virtual humans also deserve some attention. Gaming company Tianyu Digital Technology said that the headset has brought more possibilities for technological innovation in AI digital humans and content communities. The company has already partnered with XR company Pico and entered the Pico VR platform.

Kaiyuan Securities’ research report suggested that the content ecosystem will be the ultimate core competitiveness of MR devices, and Apple, along with other MR device suppliers, need to cooperate with resource providers that have high-quality 3D game libraries and film or sports media.

According to market research firm IDC's data, the shipments of VR/AR products in China in the past three years were approximately 5.8 million units, 11.2 million units, and 8.8 million units, which is less than one percent of smartphone shipments.

ZHAO Siquan, a senior analyst at IDC China, believes that the global and Chinese AR/VR markets are currently in decline. New product launches, marketing and new content releases have slowed. The entire industry still faces technological challenges that need to be overcome and resolved.

Put the party on hold

Vision Pro has significance in terms of hardware features, content direction, and new technology, but it is difficult to make a leap based on one generation of new products. But as one of the most important products of the year, Vision Pro will accelerate the evolution of AR/VR from entertainment to productivity.

For the supply chain and content manufacturers, this may be a turning point, but it is not yet time to celebrate. After all, compared to the billions of users of smartphones, this is still a very small market.