Hong Kong - MobiusTrend, the fintech market research organization, recently released a research report "WIMI Hologram Cloud Seizes the Opportunity of AR Development, and Industry Development Is Expected to Increase Production Capacity with the Release of 5G". When it comes to the AR/VR industry, it has been proposed for many years. According to data from the China Academy of Information and Communications Technology, the global virtual reality industry has a scale of more than one trillion yuan, and the compound annual growth rate in 2017-2022 is expected to exceed 70%. In terms of overall scale, it was predicted that the global AR/VR market will exceed 70 billion yuan in 2018, a year-on-year increase of 126%. Among them, the VR content market is about 20 billion yuan, and the AR content market is close to 8 billion yuan. Meanwhile, in 2020, the global virtual reality industry will exceed 200 billion yuan, of which the VR market will be 160 billion yuan and the AR market will be 45 billion yuan.
With the continuous update of AR/VR products, its application field continues to expand, and the user scale continues to rise. The scale of China's virtual reality users has increased from 520,000 in 2015 to 5 million in 2017, and by 2020, it exceeded 20 million. With the maturity of China's virtual reality technology, the market scale will further expand. Only in 2020, China's virtual reality market reached 30 billion yuan.
1. Development status of AR industry
AR and VR are two technical aspects with different concepts. AR is to emphasize the enhanced information of the real world, and the purpose of VR is to present a closed virtual world. In specific scenarios, VR will be used in large-scale games, video albums, and product display fields, while AR is suitable for social applications, education, and lightweight games. AR focuses on algorithm software, and VR focuses on content production. The difficulty of augmented reality lies in how to make computers understand and reconstruct the 3D world, which requires high algorithms and software. Low-latency high-definition display is an important indicator of VR, and virtual content production is difficult.
Currently, AR on the market is still dominated by computer and mobile phone applications, and the technological maturity of optical components has become the main bottleneck restricting near-eye display AR. The AR industry chain is divided into upstream, midstream, and downstream. The upstream is mainly for components including chips, sensors, optical components, display screens, and other parts. The midstream is for various devices such as head-mounted displays, glasses, mobile phones, and vehicle terminals. As for the downstream, it is a platform for content such as games and movies.
Due to the impact of the epidemic in 2020, the demand for homes of mass consumers has been promoted, and with the continuous breakthroughs in AR optical technology, the demand represented by AR products has seen strong growth. Namely, the user base has increased, many developers have joined, and the industry has also ushered in the new flashpoint of developments.
2. Major giants are actively deploying in the AR field
2.1 Apple
Apple has been exploring the AR field for a long time. It has successively acquired more than a dozen companies such as Polar Rose and Metaio to obtain facial recognition and development tools. It has successively applied for six AR-related patents.
At the Apple Worldwide Developer Conference in June 2017, Apple announced the launch of the AR development platform ARKit. ARKit supports motion tracking, allowing developers to create AR applications and games. At the same time, A11 Bionic has two high-performance cores and four high-efficiency cores, and its overall performance is 70% higher than that of A10 Fusion. A11 Bionic is also equipped with Apple's first self-developed 3-core GPU, which is optimized for AR and immersive 3D games. In 2018, Apple added a lot of AR-related functions. For example, AR measurement tools, AR multiplayer interactive functions, AR games, and other functions. Apple CEO Cook made it clear that the core of Apple's future development will be AR.
2.2 Qualcomm
Qualcomm first launched the Qualcomm VR820 all-in-one design model with the same name as the processor in September 2016. The performance of the Snapdragon 835 processor continues to improve. It enhanced GPU support for VR rendering features, and it integrated several dedicated DSPs in the chip to optimize operating efficiency. The 3D graphics rendering capability of the Snapdragon 835 is increased by up to 25%, supports 4K resolution, and adds support for eye-tracking and rendering technology.
In addition, Qualcomm released the first chip dedicated to AR devices in May 2018, that is, XR1. The Snapdragon XR1 platform is specially optimized for the augmented reality experience that supports AI functions, which can provide interactivity and reduce energy consumption. The XR1 platform will support ultra-high-definition 4K video resolutions up to 60 frames per second. In terms of audio, it also includes Qualcomm Technologies 3D Audio Suite, Qualcomm Aqstic, and Qualcomm aptX audio technology, which can bring excellent sound effects to users.
The AR industry chain mainly includes four major parts, that is, hardware, software, applications and content, and services. Hardware includes parts and equipment, the software is divided into information processing and operation platforms, applications and content are developed and produced for different industries, and services are channel distribution of application content through the distribution platform. In recent years, leading foreign manufacturers have continued to deploy in the AR industry, increase R&D and M&A activities, and have their own focus on technical direction and category. Microsoft used Hololens as an entry to polish its commercial-end MR products and ecosystem. Apple applied for a large number of patents and released new products. Google continued to improve consumer AR products and ecosystems, while Qualcomm began to start from the chip research of upstream devices in the AR industry chain.
3. China's domestic AR chip research
From the perspective of the business model, WIMI Hologram Cloud, a leading provider of holographic AR application technology in China, has a similar focus to Qualcomm. WIMI is a solution provider, which integrates applications, content, and services according to the real needs of downstream customers to provide complete solutions.
According to some public information, WIMI Hologram Cloud was founded in 2015. WIMI's business covers multiple links of the Hologram AR technology, including Hologram computer visual AI synthesis, Hologram visual presentation, Hologram interactive software development, Hologram AR online and offline advertising, Hologram ARSDK payment, as well as 5G Hologram communication software development. It is a holographic cloud comprehensive technical solution provider. Moreover, WIMI's commercial application scenarios are mainly concentrated in five professional fields, including home entertainment, light field theater, performing arts system, commercial publishing system, and advertising display system.
In addition, WIMI also focuses on the applied research and development of holographic AR technology in semiconductors, cloud computing, artificial intelligence, big data 5G, and other fields. The purpose of WIMI's substantial increase in R&D investment is to quickly improve the holographic AR technology capabilities to maintain a leading competitive advantage in the AR holographic industry. Since July 2020, WIMI has established a joint venture company to carry out the semiconductor chip business. It provides corporate customers with comprehensive solutions for computer chip products and central processing algorithms and related services, as well as software and semiconductor business.
China's semiconductor chip business application demand is growing rapidly, and the market potential is large. WIMI wants to expand the semiconductor industry field and integrate market resources across industries. With the rapid development of the electric vehicle industry, the demand for automotive holographic AR navigation, holographic AR car windows, holographic AR rearview mirror, and holographic AR vehicle communication has exploded rapidly. WIMI develops solutions such as holographic vehicle equipment, holographic vehicle chip, and holographic vehicle software to meet the needs of electric vehicle holographic applications. Industry insiders expressed their affirmation that WIMI has the strength to develop its AR holographic technology into the semiconductor chip business, and its business expansion into new applications and business layers. Indeed, in 2020, WIMI has won the holographic AR business and the semiconductor business to generate about 44% and about 56.0% of the revenue respectively.
With the support of 5G, WIMI revealed that it will further extend the use of use holographic AI face recognition technology and holographic AI face-changing technology as its core technologies. Moreover, it will use multiple technologically innovative systems to support holographic cloud platform services and 5G communication holographic applications. Not long ago, WIMI finally surpassed other competitors in the holographic field and communications field, and it won the bid for the second phase of the holographic remote interactive project of China Mobile and the Media Cloud Platform. The winning of the bid proves the technical strength of WIMI, and its independent R&D and investment in the core field of 5G. It has integrated the identities of holographic AI mobile software developers and operators, and it has become one of the leading integrated platforms in the holographic AI field in China.
Although WIMI Hologram Cloud has been established for a short time, it has already gathered multiple identities in one, which is incredible, and it makes people look forward to its future development. Meanwhile, the development trend of China's AR industry has also reached the stage of rising and speeding up. As for the next path for both of them, we will report as soon as there is any news.
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