By releasing a new generation of VR headsets first, Meta wants to give Apple a 'boost'?

Driven by games, the metaverse and other fields, the popularity of the XR (extended reality, collectively referred to as VR/AR/MR) track has significantly increased, and head-mounted display equipment has also become a "hot potato", winning the favor of many companies Among them are Meta (META.US), Apple (AAPL.US), ByteDance, Sony and other giants.

And the "story" between these giants also attracted a large number of "melon-eating people".

Suppress competitors? Meta rushes to release the latest version of the headset before Apple

As we all know, among the world's large technology companies, Meta is the most concerned about the Metaverse, and has invested huge sums of money to lay out the plan early. And VR headsets are regarded as one of the entrances to the Metaverse, Therefore, the company has also made great efforts in this field and is the leader in the field of VR headsets. Its Quest series occupies most of the market in the field of VR headsets.

IDC data shows that In 2022, Meta’s shipments will account for nearly 80%. Followed closely by PICO, a subsidiary of ByteDance, with a share of 10%. Then, Dapeng VR, HTC and iQiyi occupy the 3rd to 5th positions respectively.

And On June 1, Meta relatively suddenly launched its latest generation VR headset Quest 3, which attracted widespread attention from investors.

According to Meta’s official website, Quest 3 is a high-resolution head-mounted display device that is 40% thinner and more comfortable than its predecessor, Quest 2.

In addition, Meta said that

Quest 3 uses a new generation of Qualcomm Snapdragon chips, GPU performance has doubled compared to the previous generation, and has higher performance graphics performance. Through the latest "Meta Reality "Technology can better combine the real world with the virtual world and provide a better immersive experience.

And Quest 3 supports more than 500 game types.

It is reported that

The starting price of this new generation VR headset is US$499.99, but shipment will have to wait until this fall.

It is worth noting that in addition to Meta, Apple is also rumored to be launching its first head-mounted display device.

On May 15, 2023, Tianfeng International Securities analyst Ming-Chi Kuo issued an article saying that

Apple’s AR/MR headset is very likely to be unveiled at WWDC (Apple Worldwide Developers Conference) in June. At the same time, Ming-Chi Kuo believes that Apple is fully prepared to release this new device.

According to reports,

Apple expects MR head-mounted devices to sell approximately 1 million units in the first year of launch, each priced at US$3,000.

As a benchmark for consumer electronics, the market and people from all walks of life have high hopes for Apple’s first AR/MR headset.

Ming-Chi Kuo said, "If the release of Apple's AR/MR headset is better than expected,

then the headset will soon become the most important new investment trend in the consumer electronics industry. "

Other analysts also said that Apple MR will be the most complex consumer electronics product ever designed by Apple, and the application of a large number of cutting-edge technologies will accelerate the innovation process of industry chain companies.

Apple MR may become a game changer in the head-mounted display industry.

It should be pointed out that

industry experts generally predict that Meta will release the new product Quest 3 on June 1 in response to Apple’s release of the first head-mounted XR device at WWDC on June 6.

Judging from the current status quo, Meta is in a leading position, but Apple has great financial strength and countless "iron fans" around the world. Its head-mounted XR device will pose a greater threat to Meta's Quest series. Therefore, Meta's preemptive release of Quest 3 is quite a bit of a "showdown" for Apple.

Recent shipment data are poor, but the industry prospects are still promising

It is worth mentioning that although the head-mounted display device market has ushered in the layout of many industry giants such as Meta and Apple, the recent shipment data in this field are not very ideal amid the downward cycle of consumer electronics.

According to a report released by IDC in March,

Global AR/VR headset shipments in 2022 will be 8.8 million units, a year-on-year decrease of 20.9%.

IDC stated that the decline in shipments was due on the one hand to the limited number of manufacturers in the market, the challenging macroeconomic environment, and low consumer acceptance.

Another important reason is the impact of the high base in 2021.

Recently, IDC released its latest report stating that as macroeconomic conditions deteriorate, the growth rate of global augmented reality (AR) and virtual reality (VR) headset shipments will decline sharply in the first quarter of 2023. Specifically, in the first quarter of 2023, AR/VR headset shipments dropped by 54.4% year-on-year, of which VR headsets accounted for 96.2%.

However, although Meta has given Apple a "dismissal", with more manufacturers with strong financial resources joining in, some of the existing defects of VR equipment can be improved faster, and the market can be further expanded.

CITIC Construction Investment released a research report saying that in the context of the decline in global smartphone shipments, Apple’s first-generation MR products are of great significance. They are optimistic about the release of Apple’s MR and the rapid development of AI technology, which will have a great impact on the VR and AR industries. Driven by

VR/AR is expected to usher in the "iPhone moment".

Ping An Securities also stated previously that 2023 will be a new boom cycle for the VR industry. There are two main reasons: 1) The high certainty of Pancake optical applications brings about hardware-side supporting upgrades. Optimizing the completion of VR equipment products and further opening up the downstream consumer market; 2) Quest 3 and Apple MR are expected to be released in 2023. The former is expected to continue the outstanding performance of the previous generation of products, and the latter is expected to redefine VR equipment. The combination of players will inject strong impetus into the subsequent development of VR.

Based on the secondary market, there are many companies in Hong Kong and City A whose products are involved in the VR industry chain.

Previously, Ming-Chi Kuo revealed that among the material costs of Apple’s first AR/MR headset, excluding assembly (exclusive to Luxshare Precision), the top five most expensive are Micro OLED displays (exclusive to Sony) ), dual processors (exclusive to TSMC), chassis (mainly supplied by Changying Precision), 12 camera modules (exclusive to Cowell Electronics), and external power supply (exclusive to Goertek).

If you consider the revenue and profit contribution to suppliers, Gaowei Electronics (01415.HK) may be the biggest beneficiary due to its smallest revenue scale.

In addition to the companies mentioned above, there are also some VR concept stocks on the market, such as Zhongke Chuangda, Changying Precision, Skyworth Digital, etc. Investors will need to keep a close eye on post-launch sales of the Quest 3 and Apple's MR devices to determine when demand recovers.

Author: Yan Shishi

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