Over the last three years, the rise of VR in public discourse has been impossible to ignore. During this time, most mainstream discussions have centered on the same few efforts in the US : Oculus, Valve/HTC, Sony, Samsung, and Google. But there’s something just as important going on roughly 7,000 miles west of San Francisco.


Guest article by Anjney Midha:

Anjney-MidhaAnjney leads KPCB Edge as Founding Partner, and focuses on Virtual Reality and Drones & Aerospace companies. Before founding Edge, Anjney was the youngest partner at Kleiner Perkins Caufield & Byers, and was closely involved with the firm’s investments in RelateIQ (acquired by Salesforce), Ayasdi, Magic Leap, Enjoy, and True Caller, where he is a board observer. Anjney pursued undergraduate and graduate degrees at Stanford, and is on a leave of absence from the Biomedical Informatics department at the Stanford School of Medicine. Anjney enjoys flying microlight planes and modding quadcopters.


chinese virtual reality head mounted displays (13)

Across the Pacific Ocean in Shenzhen, China, in the markets of Huaqiangbei, the factories in Dongguan, and in the high rise offices of Nanshan, is where demand and supply for VR hardware and software are on par, if not outpacing, the US. The Edge team took a few days to go on the ground in Shenzhen in March, and this is a summary of what we saw.

shunwang-gaming-cafe-htc-vive-virtual-reality
See Also: A Company Serving 100 Million Gamers Wants to Help Bring Your VR Game to China

If you, like us, believe that VR has a bright future, then you likely believe in the ability of most people on Earth to access mobile VR. This is because smartphones are the only devices that have anywhere near the scale, computational ability, and price points to bring VR to most of the planet in the near future. This is the story playing out in Shenzhen. Unlike the Rift and Vive, which cost around $1,600 all-in for headset and PC, there are a hundred different flowers of mobile VR blooming (pun intended) in the Chinese electronics market, ranging from low tech VR smartphone cases to standalone Android headsets. Not all of these are strictly VR devices (we’ll get into that in a moment), but when it comes to stereoscopic, head mounted displays (HMDs) for consumers, Shenzhen is a leader.

Broadly, most devices we saw fell into three categories — Mobile VR headsets, PC HMDs, and standalone headsets.

Mobile VR (a.k.a. Budget VR)

These mobile headsets involve turning your phone into a VR viewer by adding a couple of plastic biconvex lenses to a frame that holds your mobile device, essentially a nicer version of Google Cardboard. The sheer range of these is reminiscent of the explosion in custom smartphone cases since 2010. The bulk of stores we saw dedicated to mobile VR headsets were located in the SEG Communications Market, a multi storey edifice dedicated just to mobile parts and accessories, sold by the sorts of retailers who would otherwise be selling cases, chargers, cables and lens protectors for phones.

chinese virtual reality head mounted displays (1)

The cheapest of these was the $10 VRCase iPhone case viewer below (prices can drop quickly below this with the number of units you buy) similar to the Figment Kickstarter, with the most expensive one at $45 for a drop-in style viewer.

There are entire retail storefronts, like the one pictured below, dedicated just to these mobile VR headsets. While speaking to the folks manning these stores, we were told it’s common to move up to 1,000 headsets a day in retail, and 10k units a day to distributors, with orders mostly from locals or buyers visiting from Korea and Japan.

When we asked the VR salesmen which apps were most popular with consumers in China, we saw a combination of apps from overseas like Homido and Cmoar’s cinema apps, and homegrown first party apps, like Baofeng Mojing and VRCase’s iOS VR players. Watching 2D movies and videos in 3D spaces is by far the most popular use case for these headsets, with gaming and virtual tours as runner ups.

PC-only Headsets (a.k.a High End VR)

Adjacent to the mobile accessories building is the main SEG tower, a 72 story building with 10 floors dedicated to a dizzying range and number of electronics retailers. Here is where we spotted a few Oculus and Rift alternatives, like the AntVR pictured below which offers similar specs to the DK2 for around $280 and comparable build quality, and the Deepoon E2, another DK2 alternative.

The lack of enthusiasm for these compared to the mobile headsets from the retailers was palpable, and it sometimes felt like these headsets were displayed more for novelty value than anything else. This is understandable, given the low volume of these headsets that are moving in the market and their relatively high prices for the average Chinese consumer market.

All-In Headsets

Walking through Huaqiangbei, it became apparent to us that there’s a secondary consequence of the rise of VR taking place — namely, a halo effect on non-VR HMDs. These are essentially stereoscopic media players, which give you the ability to watch your regular 2D content on a display that, when suspended on your face, offers the effect of a much larger screen. While these have been around for years in various form factors and high price points like the $799 Sony HMZ (which launched in 2011) and the $500 Vuzix iWear, we saw a plethora of newer, cheaper alternatives.

shvr jam day one (1)
See Also: Shanghai Vive Jam Kicks off With 40 of China’s Top VR Developers

We were told these have become popular as HMDs like the GearVR and Oculus are making it more palatable for consumers to strap displays to their faces. Most of these were running their own flavors of Android on the headset, and had USB ports for users to plug in their own content. These ranged from $120 video players, to the $617 RoyoleX headset that offers a direct alternative to devices like the $700 Avegant Glyph. While none of these are VR headsets in the strict sense that they didn’t have gyroscopes and accelerometers to allow head tracking, it seems to be only a matter of time before that changes with the coming launches of devices like the Baofeng Mowang, LeTV’s Helmet, and Pico Neo.

chinese virtual reality head mounted displays (5)

One of the headsets we bought, the Bijela iTheater (pictured), essentially works as a fully functional tablet, allowing you to run all the apps you’d typically want to use with a desktop monitor (Gmail, Chrome, Kindle Reader etc.) but with a mobile device that fits in your backpack, costs you roughly $190 and weighs about 40% less than a GearVR with a phone. It’s easy to see why headsets like these that are somewhere between VR headsets and smartphones both in functionality and price points could become popular with young consumers who have never owned a dedicated PC or laptop.

The Bijela iTheater — one of many non VR HMDs seen in Huaqiangbei

Takeaways

Last year, we wrote about a coming age of mobile VR. Shenzhen is where that future is approaching quickly. It’s an exciting time in history, where for the first time we’re seeing the convergence of two unique trends — massive numbers of smartphones in the hands of billions of people, combined with the sheer range of low cost VR headsets described above. Over the next few years, founders working on compelling software experiences in VR will be able to build for an audience of hundreds of millions of users who can access VR for the price of a low cost smartphone accessory. This is the reason we’re excited to work with entrepreneurs working on building the apps, services and metaverses that will bring these headsets to life for consumers across the world.

If you’re one of these founders, let’s talk!


This article was published originally on the KPCB Edge blog.

 

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  • George Vieira IV

    All these “knock offs” seem like they will produce a false start of sorts, unless some of them actually give a good experience. Really gives me a Wii accessory feel, how people were buying up stuff they thought sounded good with no idea what it did, or if they needed it.

    Also there is a Typo: “Here is where we spotted a few Oculus and Rift alternatives…” probably meant Rift and Vive alternatives.

    • benz145

      In the U.S. that might be true, but in China I think the customers know what they’re getting — a cheap headset that lets them do some fun and new stuff from their smartphone. It may not be the high-end VR we think of here in the U.S. (and in some cases, may not be ‘VR’ at all), but these manufacturers are springing up because there is demand, and quite a lot of it it seems. Very interesting to watch unfold, and see how much different it is compared to the development of the market in the U.S.

      • George Vieira IV

        I don’t know much about the Chinese market. I suppose they must be used to the variety of products coming out that are not quite the same quality as the “name brands.” Hopefully all this interest will continue, and won’t be dulled by suboptimal VR experiences, or people being confused about the difference between a VR HMD and non-VR ones (This kind of confusion may be hard to believe, but I’ve worked in retail, it happens all the time).

        This did make me think though, since such a huge part of the world’s population is in India and China, high-end VR HMDs really have a long way to go before they become worldwide mass marketable. Phone based headsets will be where most people are going to experience VR, for the near future. That makes me wonder, exactly how small is the market for systems like the Rift and Vive?

        • benz145

          That’s a great question (what’s the size of high-end desktop PC VR) and I think a big part of Anjney’s article here. Although the experience may be superior through the desktop headsets, in terms of addressable market, mobile is likely to dominate.

        • Drakan

          Heh you don’t need to worry about that.

          Here everybody loves to try new things all the time, they will never ever get like “Oh VR sucked this time, I won’t try it tomorrow”. Basically the bombardment of new products is so immense, and the will to trade them and spread them is also so big, that basically any new products that comes out people try to sell them and use them. (even if they suck or if they don’t know nothing about it… and it’s quite terrible for us who have to deal with inexperienced sales team from factories mainly in new items)

          And about Rift and Vive ? I just think they are holding their low cost headset for later. And probably if there is a Chinese version that works, and is kind of good, they will pick it up, modify it, re-brand it and of course control the QC, Sales and after-sales (warranties). Or at least that’s what I would do if my own engineers can’t come up with a solution or I just don’t have the money, or the time to invest on it.

      • Drakan

        The thing is that you can get a really cheap Plastic Headset that do the job quite well. (well not yet really)

        They have been failing A LOT but I’ve seen some really good ones.

        Everytime I tell them “Please make the FOV better, the cardboard version is still is better!”

        Until now all of them have this “box” effect when placing the phone inside, but soon they will get it.

        I think that paying +50 USD on a plastic headset to watch VR on your phone is outrageous. VR headsets should have the cheap version (that does the trick) as a Mouse, Keyboard or Headphones.

        Or else VR will be a “niche thing” and that’s not what it should be.

        My granny should be able to put VR on her phone for less than 15 USD and watch a museeum in italy for 10 bucks before she dies. I’m sorry to open your eyes, but not everybody have the PIB of first world countries, and third world countries also will benefit greatly from VR. That might not be HTC or Oculus market right now, but it will be in the future or others will take over them.

        VR can and will help a lot to society only if it can also reach the masses… I’m not saying “OH DONT BUILD 100 USD HEADSET!” of course you should! but we need the cheap ones too.

        Everybody have a keyboard, a smartphone, a mouse, hell even a computer nowdays… Because the cheapest version can still do the trick (it will type your poems and move your cursor around for few years) and for gamers or designers or whatever, there are all the expensive versions.

    • Natural Order

      “know offs” is experimentation.

  • Barret

    I’m hoping for Three Glasses or Dee Poon to embrace the OSVR platform. With the Rift priced at $600 and the Vive at $800, there’s room in the market for a more affordable mid-range headset.

    • What is the state of positional tracking for OSVR? And what’s the plans for hand tracking? Hand tracking is a MUST. Of course, if you have head tracking, hand tracking is just a minor change in hardware….

      • Barret

        OSVR has positional tracking and Leap Motion is built into the latest dev kits. I hear that software-wise OSVR needs a lot of work, but a single standard would be a boon for the industry.

        • I’m a bit on the fence with Leap. It’s DEFINITELY better than before, but it still lacks the appropriate logic in their software. They need a better predictive inverse kinetics model so the program is capable of understanding that my wrist did not just suddenly snap off and flap backwards.

  • Natural Order

    What the West have is a type of monopolistic capitalism model where you have one or two firms controlling the entire market for a particular market category.

    I think the Chinese model is more of a makers movement+ DYI+ competitive market place with varies manufacturers produces products at varies price points. The market never settle to a stable equilibrium dominated by one, or two firms. Instead, it is many firms..The Chinese model is Dawinistic, Just like primal soup containing creatures of varies body designs, over time, some biological design wins out. It takes time, but it does settle into a few design plans.

    • Bryan Ischo

      What the Chinese market has clearly is quite a few companies willing to make copies of products at the lowest price point possible. There is no innovation, just races to the bottom. The reason that there are fewer competitors in western markets is because the companies that actually innovate in these areas have to spend considerable quantities of money and time to do so and only so many companies are willing to make those bets. Much easier when all you have to do is, watch what the innovators have done and just copy it.

      • Drakan

        “Much easier when all you have to do is, watch what the innovators have done and just copy it.”

        Oh so people shouldn’t try to improve upon failed creations or great creations of others, and we should all wait until the original creator improves it right ? Well that’s a nice way to keep development stacked.

        https://www.ted.com/talks/adam_grant_the_surprising_habits_of_original_thinkers?language=en#t-202

        Because youtubers are all originals, because musicians are all originals, because comedians are all originals, maybe thats why THAT CRAP called modern art is so popular among some people “Oh because it’s original OOHhh!!”

        Have you even wondered why google opensourced the cardboard ? Or why Elon Musk actually wants to open source patents from Tesla ? Or why there are everywhere Opensource projects that rules ?

        The chinese market as you said doesn’t exist. That’s every market in the world, everybody copied from everybody and that will always happen.

        If all the world spoke the same language then probably you would have tons of Chinese companies investing in American Companies or vice versa.

        Well, Alibaba just invested 789Mi on Magic Leap according to WIRED, so there you go, the chinese market investing in your market. Happy ?

        • Bryan Ischo

          You should have stopped your rant after the first sentence. I never said that “people shouldn’t try to improve upon failed creations or great creations of others”.

          I just said that it was EASIER TO DO SO than to innovate. Which is why I think there are more competitors making VR headsets in the Chinese market. It was in direct response to the O.P. who didn’t seem to understand why the Chinese market would work differently when he wrote “What the West have is a type of monopolistic capitalism model where you have one or two firms controlling the entire market for a particular market category.”

          • Drakan

            Ok Point taken.

            Although everything in the beginning is monopolistic. And I believe that HTC and Oculus will soon see Chinese competition.

            Chinese can also copy high tech, or develop for it. At least they will use Magic Leap a LOT or make something that works with their “lenses” (forgot the name they gave to it)

            Yes the O.P maye have been a little harsh saying it’s a monopoly, maybe metaphorically it is hehehe; at the moment only 2 companies have the tech.

            I expect open source VR getting used a LOT by chinese developers who don’t bow down to exclusivity making competition harder, better and faster. In the end who wins ? The consumers. And that’s how I believe it should be.

      • Natural Order

        I disagree.

        In economics, there is two fundamental goods: 1. Make something cheaper that satisfy product requirements and 2. making slight modification of the original to cater to a particular market niche.

        Chinese seem to be doing well in both.

        Also, Dawinism is better at understanding market economies. You can’t have selection, and competition if there is only one or two firm, or monopolies. Society always pay for it.

      • DiGiCT Ltd

        That’s indeed mostly how it goes here, i need to protect my business for it a lot, as even a simple idea be copied already.
        The saying here goes: better good copied than bad invented.
        In a way it’s positive too as when they copy you, your idea is good. :D

    • DiGiCT Ltd

      China the same, just a few control the market, different company names doe not make it a choice as they mostly belong to the same investment groups.

      • Natural Order

        This is a problem with monopolistic capitalism, but in the case of smartphone market in China( There is a lot of vendors), and the emerging makers movements, I see the seed of a new model that is “less monopolistic”.

  • Personally, China is not the monster that everyone thinks it is. The best thing that ever happened to the world is open source. And China has been able to create their own brands that have been every bit as good as the American counterparts. Granted you can still find crap in China. A lot of it. but you can also find a lot of crap in America still. The field is levelling, folks. Those of you that think America is the sole source for creativity and innovation has their heads in the sand with a 1950’s mentality.

    • TaxPayer

      your forgetting that the idea started in the “americas / non china” so they just wait for the hard work to get done, copy it and sell it for cheap because they dont have a R&D budget to pay for.

      • DiGiCT Ltd

        They have the budget but not the skills

  • Roy Sherrill

    i have been working with a Shenzhen manufacturer for the last 3 months to bring the eagle-VR.com Headset to the American Market. after finding it at CES 2016 its hands down the Best Stand alone VR system i have found. it still has a few software bugs to be localized but its gotten great reviews to everyone i showed to to at VRDC2016 GDC2016 SJCC2016 SVVR2016, SDC2016 and other VR events around the SF Bay area.

    look for info on
    Eagle-VR.com
    facebook.com/eagle.vr
    thenewsbubble.com and
    facebook.com/thenewsbubble

  • Roy Sherrill

    my problem with the big american VR companies is not the product but the target Market. they are making high end procucts only for the wealthy 1%’rs who can afford $1600 on a system for gaming rrather than the billions of average consumers around the would who could use the Tech for education, entertainment, Manufacturing assistance, Virtual Tourism, watching 3D movies and the thousand of other applications other than high end gaming.

    many of the Cell phone Carrier VR systems are fine but it depends on the phone your using and most people cant afford $700 for a smartphone to run the Gear VR.
    a mid range device with the electronics built in like i’m importing from shenzhen is an affordable, flexible and expandable system. it works on its own but can also be used as a traditional HMD on a basic PC or Macbook computers as an external monitor. most people don’t need positional tracking as they are not gaming, rotational gyroscope tracking is all thats needed. and not even that for most 3d Games and movies not in a 360 environment but just using the stereo 3d effects of the HMD.

    do you need positional tracking on your 3d glasses when you see a 3D movie in the Theater? or playing a game of 3D poker, Minecraft or even skyrim. we have been watching 3d Games in our PC’s and consoles for decades. i want to play my same old games in VR with its immersion, not have to spend thousands and forced to buy new systems, games and apps.

    I do 3d modeling and animation using 3ds max, maya and strata studio, etc. stereo 3d VR would be help but i don’t need the body motion capturing system of the rift or vive to do it. i also don’t need 120 frames a second. iv been using 30FPS on my tv or 60 on my computer for ages without throwing up.

    just like certain people get car sick. if a particular program makes you nauseous don’t use that program. don’t give up on VR over 1 program.

    i like the fact i can plug my standalone HMD into my cheap laptop and still play minecraft or arc survival. it works on PC macBook Pro and other computers and consoles that don’t have a copy protected HDMI encoding. i’m hardy going to use it to pirate netflix or scifi channel programming. although i do watch them streaming through the on demand android apps i installed.

  • Roy Sherrill

    And for all you naysayers. stop ragging on the system till you’ve actually tried it. my cheap $400 HMD gives far better quality then my DK2 ever did and has no screen door effect. sure there are lots of copying. but you look for the original manufacturer / Developer and build a relationship with them like i Have.

  • DiGiCT Ltd

    Regarding to this article it is partly true, eventually there will be cheaper devices on the market which are OK to use.
    The products here in China most are just trying to get a piece of the pie from the VR = Hot time.
    Less than 10% of the products will reach the state of usable, but limited.
    Issues what will remain is that there will be no good software for it, as developers here lacking skills to make games.
    This is mainly the reason why most of them are just good movie watchers and internet browsers.
    Even for current pc games, the best ones people like to play are from outside, not the ones made here.
    People here with good income buy stuff from outside for following reasons :
    1. quality
    2. reliability
    3. after sales support
    4. they dont believe in their own products as to many stories already before

    Why it is like that ?
    The best cars are not made here, the best aiplanes are not made here,the best watches are not made here, the best phones are not made here etc etc.
    Even that china manufactures the most it is mostly just assembly what they do here.
    DongGuan the HTC Vive been assembled but it is not created here, all working on SOP.

    Everything you buy here has an issue and always a promise that it will be solved in future……..
    For most Chinese people they don’t care as much as people abroad, as they are easy happy to buy new stuff and not having the idea what a full product should do.
    Their entire life they keep buying stuff as it always has some improvements over the previous one, hoping they bought a better one.

    I clearly see the author doesn’t understand China works, i know Shenzhen very well, and many other places too.
    Almost 10 years i Live here with my wife and i can tell you things are not as you see them by visiting those places and talk with people which are in Shenzhen just or have sales, even selling it to you for a much higher price as it should cost, simply because you are a foreigner.

    Take this article not too serious, the only truth is that you can get a simple VR set for a reasonable price, but dont expect it to be good, if it all does what you want you will end up with a short lifetime for the device as quality is a serious problem here.

    • Drakan

      The best CPU’s are made in China, and a lot of other electrical components.

      A lot of “the best” is made in China. A LOT. Benz cars, BMW and others.

      I think you are missing the big picture and putting too many people under the same roof.

      • Bryan Ischo

        Huh? There is no “best CPU”. And check this chart:

        https://en.wikipedia.org/wiki/List_of_semiconductor_fabrication_plants

        China is a blip on the CPU manufacturing radar. Unless you count Taiwan as China. Which I guess technically you can, but the success of Taiwanese CPU manufacturing has nothing to do with mainland China.

        Also, the vast majority of cars manufactured in China are sold in China in the Chinese market. So it’s not really accurate to imply that Chinese cars are sold globally as “a lot of ‘the best’ is made in China” would imply when talking about global brands like Mercedes-Benz, BMW, etc.

        Doesn’t matter to me though because my car was made in Japan …

        • Drakan

          By the way I do agree with other points on what Digi wrote.

          All i’m saying is that there are some brands (few but there are) that will give you customer support and give you good products. Of course that as a foreigner is a pain in the ass to go through support and most of the chinese people I know don’t care about it (like Digi wrote) so if you ask your friend, colleague, worker, or even your chinese wife they will just not follow it through as we would because… because too many things to explain and too long to debate.

          And we end up complaining about the company.

          Yeah, maybe companies should have english support ? But they don’t care atm, is not relevant yet.

          • DiGiCT Ltd

            Correct :)
            The most successfull Chinese companies are actually Mixed Companies, International reqruited workers, only owned by Chinese.
            They have more professional business setup as they are willing to make success, but yeah most of them are not.
            Lenovo is one of them and so is Huawei just ot mention some.

      • DiGiCT Ltd

        They are assembled in China not created, you misread my point.
        The labels on products are “made in China” its in general just follow an SOP to assemble the products, benz is not created but manufactured, there is a huge difference between that.

  • Luciana Pinazzo

    Just tried a VR Box (imported in Italy) and…. well, it worked. And was quite nice, just a bit less good than Samsung Gear VR (that I tried a few days before) in terms of visual, at least with the demo movies… Interesting object given its price, btw.

  • bestdad20005@gmail.com

    hey guy tupid you suptida you ar bd stop vr GPooood vr GOODODOODODODODODOODODODOODOD u bad u bad u BAAAAAAAAAAd u stupad sheep