CINNO Research: Domestic consumer-level XR sales in 2024 totaled 567,000 units, a year-on-year decrease of 25%.

In the fourth quarter of 2024, the domestic consumer XR market benefited from e-commerce promotions and national subsidy policies, ushering in a peak of new product releases, mainly AR glasses, driving a significant increase in sales. According to CINNO Research data, XR device sales reached 131,000 units in the quarter, a 21% increase from the previous quarter. However, the total annual sales volume of domestic XR consumer market in 2024 was 567,000 units, a 25% decrease year-on-year. This decline is mainly attributed to the lack of support for VR devices in the upstream industry chain and the lack of industry leaders in the downstream market, leading to a decrease in industry enthusiasm and a gradual shift of investment focus towards the AI+AR field. Charley, chief analyst at CINNO Research, stated that according to CINNO Research data, the domestic consumer XR market in 2024 achieved a 21% quarter-on-quarter increase in sales in the fourth quarter under the promotion of AR devices, but a 25% year-on-year decrease in total sales, with VR devices showing weak performance and AR devices showing a 25% year-on-year growth, becoming a market highlight. Looking ahead to 2025, with policy support, technological breakthroughs, and continuously enriched content ecosystem, the overall XR market is expected to grow by 25%, with AI+AR glasses and MR devices leading industry innovation, promoting diversified application scenarios, and injecting new energy into the global XR market. Summary of the development of the Chinese consumer XR market in 2024 Market Segmentation Performance In 2024, the total annual sales volume of VR devices was 287,000 units, a sharp 46% year-on-year decline, with sales in the third quarter nearly halved. Despite a 4% quarter-on-quarter increase in sales driven by new product iterations from top manufacturers in the fourth quarter, overall performance was weak. In contrast, the AR device market showed a strong performance, with total sales of 283,000 units, a 25% year-on-year increase. This growth is due to significant improvements in the portability, lightweight, and efficiency of AR devices, meeting consumer demands. At the same time, with the support of AI multimodal large models and the market influence of Meta and Ray-Ban's AI glasses, AR glasses are re-entering the public eye in a more affordable form, laying the foundation for further development of AR devices in the future. Price Trend Analysis In the field of VR devices, the launch of Apple Vision Pro has sparked a competition frenzy for 3D spatial imaging features, with manufacturers such as PICO, Dreamscape, and Meta introducing new products with MR functions, driving up the average price of VR devices. National subsidy policies will be an important means to promote sales. In the field of AR devices, manufacturers have achieved price diversification through innovation in product form and functions, leading to a slight downward trend in the average price of AR devices, with further room for reduction in the future. AR Device Brand Competition Landscape Thunderbird Innovation has continuously ranked first in the Chinese consumer AR market with a 35% market share for three consecutive years, with its star products Thunderbird Air 2 and new Air 3 driving the market's vigorous development. XREAL follows closely with a market share of 29%, and by the end of the year, with its self-developed X1 spatial computing chip for XREAL One glasses, providing an excellent immersive experience. Rokid ranks third with an 11% market share, and its collaboration with the traditional eyewear brand Baolong to launch Glasses AI+AR glasses is about to be unveiled. Collaboration between leading AR manufacturers and traditional eyewear manufacturers is becoming a trend, with market share being captured through joint research and development, offline store collaborations, etc. VITURE and Star Meizu showed strong performance in the second half of the year, demonstrating strong market potential. VR Device Brand Landscape Pico leads the domestic consumer VR market with a 54% market share, with its PICO 4 Ultra product driving VR market sales rebound in the domestic market. Meta ranks second with a low-price strategy covering the lower-end market with its 3S products. DA PENG ranks third and plans to further expand the consumer market by collaborating with Baidu (09888) to release AI glasses and VR all-in-one machines. VR Device Screen Display and Optical Solution In 2024, the Fast LCD+Pancake optical solution remains mainstream, with Fast LCD accounting for 89% and Micro OLED accounting for 10%. Micro OLED is mainly used in small-sized, high-resolution MR devices or high-end VR devices and is currently in the small-scale production stage. BOE dominates the Fast LCD market, while Sony remains a leader in Micro OLED, but the share of Vision continues to rise. The penetration rate of Pancake optical solutions continues to increase, with a market share of 65% for the whole year, while Meta's new 3S product adopts a Fresnel lens scheme to further capture market share and reduce costs. AR Device Screen Display and Optical Solution In the field of AR devices, BB optical solutions account for 90% market share, but the split BB solution lacks innovation in perception, and price will be a key factor in future competition. The supply chain and terminal manufacturers are actively promoting localization, such as the screen display of Thunderbird Air 3 provided by Vision, with prices falling to 1,699 yuan. In terms of optical solutions, Phenix Optics' BP module and BM module have become alternative solutions. E-sports hardware manufacturer THUNDEROBOT's debut of AR glasses, AI glasses, and AI+AR glasses series at CES 2025, marks its transformation into an intelligent ecosystem service provider. In the future, all-in-one AR glasses will tend to be equipped with AI large models, integrated multifunctional integration, but the technology is not yet mature. Investment and Financing Dynamics In 2024, the total financing amount disclosed in the global VR/AR industry reached 18.89 billion yuan, with the domestic financing amount being 4.47 billion yuan, a decrease of 1.42 billion yuan compared to the previous year. Intense market competition has led to the elimination of some companies and a decrease in the number of financing transactions. The number of financing deals in the AR display field has decreased, but the amount per deal has increased, with companies like Xitai financing 1 billion yuan and Hongshi Intelligence financing 400 million yuan. AR hardware financing has increased from 11 deals in 2023 to 20.In 24 investments, mainly due to the upstream core components moving towards terminal devices. Rokid, XREAL, and Thunderbird Innovation raised 600 million, 430 million, and 200 million respectively, with the funding amount decreasing compared to last year.Outlook for the domestic XR market development in 2025 1. With the deepening of market competition, capital is increasingly favoring upstream leading companies with strong technological capabilities and broad market prospects. Major projects such as Xitai's financing of 1 billion yuan have emerged. In contrast, the investment and financing activities of AR downstream hardware manufacturers are numerous but small in scale. In 2024, the AR industry has entered a mature development stage, and this trend is expected to be consolidated in 2025. With the continuous escalation of national subsidy policies and the active cultivation of overseas XR content, the domestic consumer-grade XR market is expected to see a significant growth of 25%, and its application scenarios will become more diverse. 2. Looking ahead to 2025, the competition in the hardware market will enter a more intense elimination stage. Giants in industries such as esports and smartphones are increasingly entering the XR field, making the competition between internal brands more intense. Price wars and technology wars may become the norm of market competition, which will undoubtedly bring heavier survival pressures to small and medium-sized enterprises. Facing this challenge, smartphone manufacturers such as Huawei and Vivo, esports manufacturers, and professional manufacturers in the XR field are actively planning their product forms, striving to leverage their own advantages in order to stand out and eliminate lagging competitors in the fierce market competition. 3. XR product forms are becoming increasingly diverse, with AI smart glasses expected to become a mainstream trend as a low-barrier product. Although the VR/MR device market showed slight weakness in 2024, there are reasons to believe that the market will see a strong recovery in 2025, especially with significant growth expected in applications in education, training, and entertainment as the upstream supply chain gradually improves and the content ecosystem continues to enrich. At the same time, AR devices are continuously optimizing in terms of portability, lightweight, and price. Before hardware technologies such as displays are fully mature, AI glasses as a low-barrier transitional form of AR glasses will lay a solid foundation for the comprehensive popularization of AI+AR devices.