Global XR Shipments Climb 149.7% y-y in 1Q21
The author is an analyst of NH Investment & Securities. He can be reached at kyuha.lee@nhqv.com. -- Ed.
Global XR device shipments continued to surge y-y in 1Q21, backed mainly by strong Oculus sales and the release of content for the XR environment, despite off-seasonality. We expect the related market to bloom in earnest from 2022, thanks to new product launches by major companies.
Global XR shipments climbed 149.7% y-y in 1Q21
In 1Q21, global extended reality (XR) device sales topped 3.05mn units (+149.7% y-y, -11.5% q-q), continuing a sharp y-y increase. Despite falling slightly q-q, shipments came in sound despite the off-season, considering that 4Q20 was heavily influenced by a high-demand shopping season and the release of major new products (eg, Oculus Quest 2).
Of note, Oculus shipped 2.29mn XR units (+446% y-y), driving overall market growth. In 1Q21, the firm’s market share totaled 75.2%, up 1%p q-q, with its main product, the Oculus Quest 2 (2.21mn units) accounting for the majority of shipments.
Among other players, Chinese firms DPVR and Pico are showing healthy sales growth. However, as the combined market share of the two companies is still below 10%, Oculus is expected to maintain its monopoly for the time being.
Brisk XR market growth to sustain
Currently, Facebook boasts an overwhelming share of the XR market through the Quest 2 series of its subsidiary Oculus. Moving ahead, the robust growth of the XR market is likely to sustain, backed by the global resurgence of Covid-19, an expansion of VR-focused content, and strong metaverse trends.
In our view, it is highly likely that Apple will unveil its first XR device around Jun 2022 and begin sales in 2H22, a development that should help the related market to bloom in earnest next year. We expect the global XR market to expand to 13.7mn units (+102.8% y-y) in 2021 and approximately 28mn units (+103.7% y-y) in 2022.
Looking at related domestic stocks, LG Innotek and Derkwoo Electronics have strong chances to supply XR-related camera modules to Apple. In addition, Newflex, which supplies FPCBs for camera modules for the Oculus Quest series, is expected to benefit.