London, San Diego, New Delhi, Beijing, Buenos Aires, Seoul, Hong Kong – April 15, 2022

XR technologies experienced their first boom in China in 2016. However, this boom fizzled out in the following two years due to the immaturity of subsequent technologies and failure to fulfill public expectations. Five years later, with the rise of the Metaverse and Meta’s (formerly Facebook) commercial success of its consumer-level VR headset Oculus, China’s XR market has received its second wind with mobile giants like Huawei, Xiaomi, and OPPO entering the fray with their own releases of smart/AR products. Counterpoint Research has released a new report on the 'Overview of China's XR Market' which analyses the advancements in XR/AI technologies and the introduction of blockchain as cornerstones of a full-fledged Metaverse. It also measures whether a certain level of maturity has been achieved to reach mass-adoption levels in China’s XR market.

Current landscape

Currently, four major forces steer China’s XR industry, ranging from XR-focused start-ups to mobile giants. Three out of the top five smartphone manufacturers in China launched their own smart/AR glasses in the second half of 2021. Consequently, the smart/AR glasses category has become the most competitive in the Chinese XR industry with its relatively low entry barriers and potential to become the next leading device in smart wearables. Lagging in core AR/VR technologies, Chinese manufacturers are trying out other means of development, namely functionalities utilizing their own technological advancements, to pursue value-added and popular features like voice control, virtual assistant, and gesture control. Chinese manufacturers are also diversifying their product lines, shifting from B2C to B2B markets by providing products for industrial and service sectors. Rokid X-Craft and Rokid Glass are typical examples of obtaining value propositions in industrial/business applications.

Overview of Leading Players in China

Technological landscape

According to Counterpoint's Overview of China's XR Market Landscape report, the market is currently moving towards a combination of Micro-LED with waveguide technology for augmented displays, setting a new standard for premium AR glasses. Xiaomi’s upcoming AR glasses have chosen such a combination. Micro-LED enables thinner display screens, lower power consumption and higher display resolutions. However, mass adoption will be less likely due to its high production costs, hence limiting its application to only premium models. Additionally, AR/smart glasses still depend on mobile phones for their computing power. However, China’s early adoption and development of 5G technology raises the prospects of AR/smart glasses becoming integrated devices independent from mobile phones.

In terms of VR headsets, leading players in China such as Pico, iQIYI, and ShadowCreator are adopting Qualcomm’s Snapdragon XR2 SoC processors, part of the Snapdragon product line designed primarily for AR and VR devices for optimal performance, benchmarking against Meta’s Oculus Quest 2 as the standard.

Competitive landscape

Even with big players testing the waters of the Chinese XR market, the AR market remains to be cultivated to its full potential with a dominant headset yet to be seen. This, however, may change soon with Pico (acquired by ByteDance), the leader in China’s VR market, seeing success with its Neo 3 model. Multiple AR/smart glass models are expected to be launched this year (2022), including the Nreal Air, Huawei Eyewear 3, OPPO Air Glass, Rokid Vision and possibly the Xiaomi AR glasses.

OPPO Air Glass 3 With Half-frame in Silver

Source: OPPO

For more details, read our report ‘Overview of China’s XR Market Landscape’. Feel free to contact us at [email protected] for questions regarding our latest research and insights, and for press enquiries.

Analyst Contacts:

Counterpoint Research

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