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XR Industry Megatrends

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Extended reality (XR) devices, which overlay an extended reality on top of the real world, are emerging as disruptive devices that will drive a second wave of digital convergence, renewing the digital convergence brought about by smartphones. MR (mixed reality) devices will converge TVs, monitors, and laptops, while AR (augmented reality) devices will integrate smartphones, smartwatches, and tablet PCs.

 

UBI Research has released a new report, “XR Industry Mega Trends Analysis,” which provides a detailed analysis of the past and present of the XR industry that set manufacturers, display companies, and component/material/equipment companies need to know in order to prepare for the upcoming second wave of digital convergence.

Analyzing all the models of XR devices on the market from VR devices that started to be released in 1989 to the first half of 2023, we found that XR devices have a very complex industry structure that is different from wearables, mobile devices, and IT devices that have existed before.

MR devices are characterized by being able to work while moving, unlike conventional IT products that are used while sitting in a chair, and AR devices are products that free up both hands while actively adjusting the display to provide information in all directions of head movement.

Therefore, it was analyzed that in order to succeed in the XR device industry, which is the next generation of innovative products, all related companies, including set companies, display companies, and equipment/components/materials, must first understand the composition, operation principle, and content of XR devices and prepare business directions.

The core components of XR devices are optics, displays, and sensors for tracking, and the content used is different depending on the characteristics of these three components. While the existing IT industry has determined the content to be used based on the performance and specifications of the hardware, XR devices are expected to develop in the opposite direction, with the content determining the specifications of the XR devices.

We have summarized the optics and displays of XR devices released in the first half of this year. Understanding the relationship between optics and display is an essential element of the XR device industry, as the type of content determines the specifications of the device.

We analyzed the optics, displays, and tracking methods of all XR devices released since 1989.

Display trends show that the number of models using LCDs is slowly decreasing, while the percentage of XR devices using micro-OLEDs is increasing.

In optical see-through (OST) AR with transparent windows, micro-OLEDs are most commonly used, with waveguides and birdbaths being used as optics.

Display companies need to work together to understand which combination of optics is appropriate for the display they are developing or producing.  This is because XR devices are often used for specific purposes rather than general purpose. The field of view (FoV) of the optics can determine the display of choice.

We analyzed the resolution trends in AR devices. FHD (1920×1080) resolution is becoming the main specification for AR devices. Micro-OLED is mostly used.

Micro-LEDs are attracting attention as the main display for AR devices due to their high brightness, but it will take at least five years before FHD products with a panel size of about 0.25 inches are available because panel and LED manufacturing technologies are not yet established.

As the features and specifications of XR devices vary depending on the purpose of use, it is necessary to closely examine the software, so we analyzed 472 products from 178 companies that have released software for XR since 2010.

We examined the number of software companies by country, and found that the United States has 79 companies, accounting for 44.1%. It is clear that the software industry for XR is dominated by the United States.

To analyze the activity of software companies, we examined the number of companies by genre that released products between 2018 and 2022. We analyzed the number of companies by genre in each country and found that the U.S. has an even distribution of companies in all genres.

This report will serve as a cornerstone for all supply chain players in the XR industry and those who wish to enter the XR industry in the future to understand the characteristics of the XR industry and find a successful business path.

▶ Megatrend Analysis of the XR industry Report Sample Download

Megatrend Analysis of the XR industry : Detailed analysis of XR devices and software industry

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In order to shed light on the footsteps of the XR device industry, which is gradually increasing in scale with the goal of replacing wearable devices and IT devices, and to forecast the future market, XR device models and specifications released from 2018 to the first half of 2023 were analyzed. During this period, there were 327 models of XR devices and 127 companies that were investigated.

XR devices are classified into VR, MR, and AR. As for AR devices, only optical see-through (OST) products were classified as AR, and video see-through (VST), which allows viewing of the real world through a camera, were classified as MR. Since the labeling methods for MR and VR devices were mixed by the company, the fixing method was also closely investigated and referred to the device classification.

In order to analyze the trend of XR devices, it was analyzed by dividing into three types by period.
1) Latest trends of products released only in the first half of 2023
2) Overall XR device flow through analysis of products released from 1989 to 2022
3) 5-year trend between 2018 and 2022 for an accurate analysis of the current status, taking into account the company’s mergers and acquisitions, closure, etc.

Analyzing the number of models released between 1989 and 2022 by device, the XR device industry appears to have started to bloom in 2016. Most of the device models were for VR, but after the number of models released peaked in 2017, the number of new VR device models has been slowly declining. Especially since 2020 when Covid-19 started, the number of AR device models has outpaced the number of VR device models. One of the reasons for the decrease in the number of newly released VR device models is the increase in the number of MR device models. From this analysis, it seems that the XR device industry is shifting from VR to AR and MR industries from 2021.

The competitiveness of each country in the XR device industry was also analyzed. Recently, the device industry has been affected by the entire supply chain depending on the ecosystem of each country, so we looked at the countries and application fields that are leading the XR set industry. Between 2018 and 2022, the country with the highest number of vendors launching XR devices was China, with 25 vendors. The United States comes next with 20 companies, and Korea has the third largest number with 9 companies. As a result of investigating the number of companies by application field, Chinese companies have the largest number of companies that have released VR and MR products, but the number of AR companies is the number one in the United States. South Korea ranked third in AR and VR products respectively.

When analyzing the number of XR device product models, China ranked first, the US ranked second, and Taiwan ranked third.

We analyzed software companies for XR between 2010 and 2022, as well as their released products and applications. The number of software released during this period was 472, and the number of companies was 178. The increase in the number of software releases for XR started from 2016, and when 472 software were analyzed by XR type, the ratio was 66% with 311 cases for VR, and 81 cases and 80 cases for AR and VR, respectively. VR software still seems to dominate the XR software industry.

When XR type software was analyzed by country, China released the most products for VR with 177 cases. This result shows that China is leading the VR software industry. As a result of analysis by genre, game use accounted for 49% with 233 cases, industrial use with 62 cases with 13%, and entertainment with 41 cases with 9%.

When the number of software companies is analyzed by country, US companies have an overwhelming number of companies with 79. On the other hand, China, which has the most VR software releases, had only 12 companies.

▶ Megatrend Analysis of the XR industry Report Sample Download

Kopin, entering OLED microdisplay market for mobile VR and AR with new technology and business model

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Kopin, mobile VR and AR wearable technology development company, announced on December 21(local time) that they will enter OLED microdisplay market for mobile VR and AR application. This company’s very first OLED microdisplay is expected to be tested during CES 2017 held next month.

Kopin mentioned they developed a new silicon backplane structure which can implement OLED-on-silicon microdisplay without restrictions of size, weight, and power of the direct view products. The characteristic of this microdisplay is the ultra-high resolution, low power, and small form factor which provides excellent user experience in mobile and wearable system.

Kopin mentioned OLED-on-silicon microdisplay consists of two main factors, silicon backplane and OLED release layer. What is special of Kopin’s business model is that, where the expert knowledge is in Kopin, both of the two manufacturing operations are the very first full fab-less OLED microdisplay business model which is outsourced in private foundry. The main reason that Kopin got involved in this fab-less is that they expect the demand of OLED microdisplay will largely increase along with VR and AR, MR market, and also they think utilizing investments from other companies seems to be the best way to be prepared in the market because there is burden in capital investments in OLED foundry.

Kopin’s CEO, as well as the founder, Dr. John C.C. Fan said “Kopin is one of the biggest and successful suppliers of microdisplay system where more than 30 million of AMLCD and LCOS products are shipped”, and “by adding OLED microdisplay and module in product portfolio, Kopin provide various display technology and optics technology where customers evaluate various designs, and based on that, we were able to manufacture the product where the application is optimized.”

Lastly, Dr. Fan said “Kopin’s OLED microdisplay is specially manufactured so that the improved technology can be utilized well that are being improved in virtual and reinforcement, mixed reality applications field”, and mentioned “Kopin’s target is to occupy a portion where they can grow in the OLED microdisplay market”. Along with competing companies such as eMagin and Sony, what new type of OLED microdisplay panel will Kopin introduce is expected attract attention in CES 2017.

<Kopin’s world’s smallest smart glass display publicized in January 2016, businesswire.com>

BY HYUNJUN JANG, HANA OH