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Supply Chain Claims that VR Headsets and HoloLens Component Orders are Disappointing for 2017

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In December Patently Apple posted a report titled "Market Analysts find the current VR/AR Headset Hype is failing to Resonate with Consumers." The report noted that many research firms' numbers have shown that VR product sales in 2016 have been weaker than expected due to lack of content and high product costs. VR/AR technologies also require more improvement in order to stimulate demand from both the consumer and enterprise sectors. In the end, the supply chain report clearly stated that the Virtual Reality craze that had hit the market in 2016 with the introduction of the Oculus Rift was at present a great disappointment.


Today a new supply chain report has surfaced claiming that "Current component orders for production of AR (augmented reality), VR (virtual reality) and MR (mixed reality) head-mounted display (HMD) devices from brand vendors are still insufficient.


Component suppliers for the AR/VR/MR industry have been looking for an influx of orders from brand vendors after Microsoft revealed at its latest Windows Hardware Engineering Community (WinHEC) event held in Shenzhen late 2016 that HMDs from Acer, Asustek Computer, Dell, HP and Lenovo will be available starting 2017.


In cooperation with Intel and Qualcomm, Microsoft also pledged to bring MR experiences to consumers through affordable PCs and HMDs.


However, shipments of HMD devices from these brand vendors are likely to be limited in 2017 as most vendors will be trying to differentiate their products from others and will ship a limited quantity of products to test the market initially.


In addition, the report noted that that vendors' initial production has also been affected by a tight supply AMOLED panels and insufficient application support.


Taking the China market for example, sales of HMD devices and high priced gaming notebooks have been lowered than expected recently, even though handset games are now very popular in the market, said the sources.


In my view, consumers are likely to wait out the initial barrage of products. At present VR headsets and Microsoft driven HoloLens glasses from various OEMs are creating a VCR-Betamax type of war. At the moment, neither side has a killer app or enough content to stimulate sales.


At present rumors have indicated that Apple is working on some form of a headset and Apple's CEO has talked up Augmented Reality on ABC News. With the market sitting on the sidelines, Apple has the luxury of time to get their headset right so as to make it compelling with enough content to excite their fan base enough to pull the trigger and make a purchase; something their competitors have failed to do.


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