A Boost for Consumer IT Virtual Reality Reveals Ecosystem Growth

Estimated reading time: 3 minutes

Virtual reality (VR) is an increasingly hot topic at technology events, government meetings and consumer entertainment events, injecting a boost of much needed excitement into consumer IT and business applications markets.

According to International Data Corporation (IDC), worldwide shipments of Virtual Reality (VR) hardware will skyrocket in 2016.The broader VR ecosystem will benefit from this rapid growth. The shipments of VR devices worldwide are expected to increase by up to 2400% in 2016, with screenless viewers enjoying the largest market share at 74%. As more consumers and industry users adopt VR technologies, there will be ample opportunities for consumer, gaming, entertainment and business applications providers to ride this wave.

It is vital to get a clear picture of the VR market within the context of the ecosystem. International companies like SONY and HTC are taking the lead in VR technologies while Chinese companies are advantaged in marketing. VR device is being highly correlated with the development of the larger ecosystem of upstream supply chain, content, platforms and accessories.

At the VR Ecosystem Summit held in Guiyang today, as an IDC China Navigations Event in 2016, IDC analysts and representatives from VR manufacturers, upstream chain suppliers, content providers and platform service providers shared the viewpoints on the latest trends in the VR industry. With the theme of VR in an Ecosystem: Devices and Beyond, the summit focused on the business opportunities within the entire VR ecosystem. Some of these include:

• VR devices: As the top three VR manufacturers (Oculus, HTC and SONY) launched their 2016 products one after another, smartphone manufacturers have also set their sights on the screenless viewer market. Meanwhile, competition is made more complicated by the recent entry of standalone VR devices as well.
• VR components: On the one hand, chip manufacturers have been making deployments in the PC chip market to be better compatible with high-end VR devices. On the other hand, competition in the Standalone HMD market has intensified, with Intel, Qualcomm, Allwinner and Spreadtrum having introduced their mobile VR solutions. The evolution of the Chinese Standalone HMD market will have an impact on the global VR market landscape.
• VR content: While small game studios have released various VR games, large game developers have largely adopted a “wait and see” attitude, with blockbuster VR games yet to appear. iQIYI and Youku have released their VR video platforms and related strategies, making first moves to capture emerging video content market opportunities. Overall, VR content is relatively scarce but growing rapidly.
• VR platforms: Most VR device manufacturers have their own application platforms, but with the development of cloud computing and big data applications, as well as large platform service providers entering into the market, fragmented app stores will face risks as VR content becomes increasingly platform-based and centralized.

According to Neo Zheng, Research Manager, Client System Research, IDC China, “What started as a great concept, VR is quickly becoming reality for consumer and business applications. With the participation of major global manufacturers, the VR market is set to enjoy rapid growth in the second half of 2016. This results in upstream and downstream benefits, with VR chip/screen suppliers providing more specially designed components and video game developers offering more VR content. We expect the VR ecosystem and user demands to dramatically change in the coming years.”

About IDC Trackers

IDC Tracker products provide accurate and timely market size, vendor share, and forecasts for hundreds of technology markets from more than 100 countries around the globe. Using proprietary tools and research processes, IDC's Trackers are updated on a semiannual, quarterly, and monthly basis. Tracker results are delivered to clients in user-friendly excel deliverables and on-line query tools. The IDC Tracker Charts app allows users to view data charts from the most recent IDC Tracker products on their iPhone and iPad.

About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,100 analysts worldwide, IDC offers global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a subsidiary of IDG, the world's leading technology media, research, and events company.