Global Competition to Heat up in XR Market
The author is an analyst of NH Investment & Securities. He can be reached at kyuha.lee@nhqv.com. -- Ed.
At its Galaxy S23 Unpacked event, Samsung Electronics (SEC) announced its partnership with Qualcomm and Google to develop XR devices. Under the partnership, Qualcomm will supply key semiconductor chips, while Google will provide an XR-dedicated platform. Competition looks likely to intensify in the XR segment down the road.
SEC to overcome weakness in XR domain via collaboration
At its Galaxy S23 Unpacked event, SEC announced its partnership with Qualcomm and Google. Although it has yet to disclose details of its XR device, SEC plans to work closely with the two firms to develop the hardware and software required for AR and VR devices. We expect SEC to roll out its first XR device as early as 1H23 and no later than end-2023.
Apple’s first mixed-reality device, likely to be dubbed Apple Reality Pro, is set to feature: 1) ultra-high-functional sensors that boast much greater performance than those installed in smartphones and PCs; 2) ultra-high-resolution displays; and 3) XrOS, an XR headset-exclusive operating system.
Compared to Apple, SEC lacks competitiveness in these areas. The Korean IT giant should be able to catch up with Apple in the display arena, as affiliate Samsung Display is developing OLEDoS technology and mass production processes. However, sensors and an XR-dedicated platform remain SEC’s main weaknesses. In our view, the newly-formed partnership with Qualcomm and Google will allow SEC to make up for its lack of competitiveness in the XR device segment.
Global competition to heat up in XR market
The three firms hope to draw attention to their future XR product and begin competing in the segment in earnest before Apple unveils the Apple Reality Pro in June and releases it in 2H23. If Apple preempts the XR segment, which is expected to lead the IT device market going forward, other IT companies with high smartphone sales portions should come under great burden.
Global competition to preempt the XR market is likely to heat up going forward, with China planning to foster XR as a key digital economy industry.
We expect these developments to benefit SEMCO, LG Innotek, Sekonix, APS Holdings, Namuga, Sunic System, Newflex, and HyVision System.