Last week’s Apple Fall conference caught the attention of VR/AR (Virtual Reality/Augmented Reality) professionals. During the event, Apple highlighted that both the iPhone 8 and the iPhone X are optimized for mobile AR, positioning them as powerful platforms for augmented reality experiences. This suggests that future iPhone users will have access to AR features, potentially making them a significant part of the growing AR industry.
Following the introduction of AR-compatible hardware, a wide range of mobile applications can now be used anytime, accelerating the arrival of the AR era. However, this isn't the case for VR, which has faced challenges in comparison. After a promising start in 2016, the VR industry has seen a slowdown this year. Even in the gaming sector, where VR integration was expected to thrive, the adoption rate remains low.
The VR industry still faces several key issues. In June, the head of Asia’s game division mentioned that Sony’s PS VR had sold over 1 million units globally. According to SuperData, HTC Vive and Oculus Rift sold approximately 420,000 and 243,000 units respectively. Most high-end VR products are PC-based, like the Oculus Rift and HTC Vive, while PS VR is designed to work with the PlayStation 4.
Dong Lei, director at CIC Fuzzi Consulting, explained that PS VR's success comes from its lower entry barrier. Unlike PC-based systems requiring expensive hardware, PS VR uses the existing PS4 platform, making it more accessible. This approach helps attract both new users and existing PS4 owners. However, despite selling 1 million units, only about 1.6% of the 60 million PS4 users have purchased PS VR, indicating room for growth.
Sony Interactive Entertainment did not provide specific financial data on PS VR but stated that sales were in line with expectations given the installed base of 60 million PS4s. Over 360 developers are creating content for PS VR, with more than 140 titles already available. Dozens of domestic games are also in development.
Currently, PC-based VR devices cost over 2,000 yuan, with high-end models ranging from 5,000 to 10,000 yuan. Dong Lei believes this is due to an immature ecosystem, where user demand is still low, preventing mass production and cost reduction. However, he expects prices to drop over time.
In terms of content, Dong Lei emphasizes that for big companies, hardware is just the foundation, and content distribution is key to long-term profitability. Both aspects are essential.
Regarding claims that adult entertainment could boost VR, Dong Lei clarified that China lacks a rating system for films, music, and games, so such content won’t be allowed until one is established. He stressed that the VR industry should not rely on adult content for growth.
Compared to VR, which has gone from hot to cool, AR is gaining traction. At Apple’s WWDC in May, the company launched ARKit, a developer platform that supports Unity, Unreal, and SceneKit. It enables motion tracking and allows developers to create AR apps and games.
At last week’s product launch, the release of the iPhone X further pushed AR into the mainstream. With iOS 11, Apple is expected to introduce many AR apps using the iPhone camera on the App Store.
According to Dongxing Securities, by early 2017, 330 million devices supported ARKit. Apple may sell 250 million units in 2017, bringing total ARKit-enabled devices to 580 million worldwide. A conservative estimate suggests 145 million active AR users by year-end.
Dongxing Securities noted that for a technology to go mainstream, convenience is crucial. While VR headsets offer good experiences, they are bulky and hard to use, limiting their appeal. Before Google’s Tango, which required additional sensors, sales were poor.
After the new iPhone release, Apple is pushing AR into everyday use. The company plans to launch new hardware and software, enabling users to shop virtually, play games, and watch videos in their living rooms.
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