Hong Kong – Tailor Insight, the fintech market research organization, recently released a research report “WIMI, Which Has Raised $170 Million in One Year, Expands Its Leading Position in the $500 Billion AR Market”. Speaking of holographic technology, one of the most popular concepts in recent years, some of the images in science fiction movies may appear in the WIMI Hologram Cloud. For example, in the “Star Wars” series of movies, the characters can communicate in real-time through holographic images at a distance of several galaxies. This year, it is necessary to select a few black technology companies, thus, WIMI Hologram Cloud, which has raised a total of $170 million within a year, is leading the AR market. What are the dazzling truths of this future technology company that everyone has discussed about?
Public information shows that, WIMI focuses on holographic cloud services, mainly in vehicle-mounted AR holographic HUD, 3D holographic pulse LiDAR, head-mounted light field holographic equipment, holographic semiconductor, holographic cloud software, holographic car navigation, and other professional fields, covering multiple links of AR technology, including holographic vehicle-mounted AR technology, 3D holographic pulse LiDAR technology, holographic vision semiconductor technology, holographic software development, holographic AR advertising technology, holographic AR entertainment technology, holographic ARSDK payment, interactive holographic communication, and so on. It is a holographic cloud comprehensive technical solution provider.
As an emerging industry, the global holographic AR market has huge growth potential. It has attracted a large amount of investment since 2016 and has made a huge contribution to the growth of the industry. Several organizations, including research and development, are investing heavily in technology to develop solutions for businesses and consumer groups. Over the years, the holographic augmented reality market has been widely used in applications such as games, media, and marketing. Its application scope in different industries such as advertising, entertainment, education, and retail continues to expand, and it is expected to drive demand during the forecast period.
According to Frost & Sullivan’s prediction, the holographic AR advertising market in China is expected to grow to 143.9 billion yuan ($22 billion) at a compound annual growth rate of 78.9% from 2020 to 2025. By 2025, the market size of China’s holographic AR advertising market is expected to reach 454.8 billion yuan ($70 billion).
Beast Finance believes that although holographic AR technology is currently mainly used in the entertainment and advertising industries in China, with the increase of related applications, holographic AR technology also has huge development opportunities in other industries.
A key factor driving the development of holographic AR technology in China is the progress and maturity of the technology itself. The maturity of the technology has led to the reduction of hardware costs, which has led to the application of this technology in more and more industries. In addition, with the expansion of the application range of holographic AR technology, people’s awareness and demand for it are also further promoting the development of this technology. For example, shopping with holographic AR technology is now common on e-commerce platforms.
However, Beast Finance believes that the main driving force for the development of holographic AR technology in China is the Chinese government’s policies and various aspects of support for 5G, Internet of Things, VR/AR/MR, and other new-generation technologies. Everyone knows that because of the different systems, the Chinese government has a great regulatory role in industrial development. In China, the government can mobilize a lot of resources to support industries that are considered strategically important. This kind of support includes grants, land and subsidies, loans, and regulatory support. For example, Jiangxi Province has provided 2.9 billion yuan in funding support for companies to promote AR/VR companies’ integration into the global industrial chain, capital chain, and value chain. Meanwhile, government departments including the Ministry of Education and the Development and Reform Commission have also formulated relevant policies to support the development of China’s AR/VR industry.
With the rapid development and changes of the holographic AR industry in China, a large number of industry participants are constantly developing new holographic AR technology products. R&D and strategic acquisitions require a lot of capital. Compared with its domestic competitors, WIMI Hologram Cloud has relatively abundant funds. Since its listing in April 2020, WIMI has received a total of $170 million in financing. Investors include a number of institutional shareholders such as Shengshijing Investment., Singapore UOB Venture Capital, Yingqu Capital, and Weibo Investment. These sufficient funds provide a huge source of capital for its competition in China.
During the 2017-2019 fiscal year, WIMI’s revenue increased by 28.9%. The gross profit margin for the same period was between 54% and 62%, which is reasonable for software companies. Because most of its revenue comes from advertising, WIMI is classified as an advertising company. However, Beast Finance tends to regard WIMI as a company operating in the field of information technology, because it mainly involves software applications and is based on its technology and application programs to compete in different fields.
From the above data, it is not difficult to see that the business growth of WIMI Hologram Cloud is in a healthy development trend. From 2017 to 2019, the financial revenue of the three years has continued to increase. It is reported from this market that the amount of business revenue is increasing, and the market expansion is expanding.
According to the prospectus of WIMI, as the 5G holographic communication network bandwidth conditions change, the 5G holographic application market will usher in an explosion. High-end applications such as holographic interactive entertainment and holographic conferences will gradually become popular in holographic social, holographic communication, holographic navigation, and holographic home applications. WIMI Hologram Cloud plans to use holographic AI face recognition technology and holographic AI face-changing technology as its core technologies. Moreover, it will use multiple technologically innovative systems to support holographic cloud platform services and 5G communication holographic applications.
WIMI services will be deeply integrated with 5G. With the cooperation of 5G’s high speed and low latency, the average transmission delay of remote communication and data transmission from the system terminal to the service server is about 6ms, which is much lower than the 4G network transmission delay. It guarantees the Hologram AR’s long-distance communication and data transmission without stuttering and low delay. Moreover, it also assures the richness and diversity of multi-terminal remote coordination, and time interaction, which makes the collaboration of end + cloud collaboration more efficient. Enhanced mobile broadband (eMBB) and Internet of Things (IoT) applications will enable WIMI’s Hologram AR advertising business and Hologram AR entertainment business, as well as Hologram interactive entertainment, Hologram conference, Hologram social networking, Hologram communications, Hologram family, will be based on the core technologies of 5G+AI face recognition technology and Hologram AI face change technology to achieve effective growth.
VR/AR is a product of the integration of a new generation of information technology. In the past, due to bandwidth and delay factors, VR/AR products had some problems, such as insufficient rendering capabilities, poor interactive experience, and poor terminal mobility, which has always curbed the development of the industry. High-quality VR/AR services have very high requirements for bandwidth and delay. For example, for VR, to achieve a very good user experience, the bandwidth required must reach 1000Mbps or more, and the delay must reach the level of less than 2ms. It is said that to achieve a good user experience, for AR, a bandwidth of more than 200Mbps and a delay of less than 5ms are required. This is impossible to achieve in the 4G era. Only 5G can meet such high-speed transmission capabilities.
After the launch of 5G, the first scene application will accelerate the development of VR/AR, and the growth rate of the Chinese market will be higher than that of the global market. Therefore, with the blessing of 5G, the communication transmission shortcomings of immersive game scenes such as VR/AR will be compensated, and it is expected that the commercial use of VR/AR of immersive games will accelerate. According to the research of the China Academy of Information and Communications Technology, the global virtual reality industry scale is close to 100 billion yuan, and the compound annual growth rate of 2017-2022 is expected to exceed 70%. According to Greenlight’s forecast, the global virtual reality industry scale will exceed 200 billion yuan in 2020. Among them, the VR market is 160 billion yuan, and the AR market is 45 billion yuan. In addition, for the Chinese market, according to IDC’s latest “IDC Global Augmented and Virtual Reality Spending Guide”, by 2023, China’s AR/VR market spending will reach $65.21 billion, which is higher than the 2019 forecast ($6.53 billion). At the same time, the compound annual growth rate (CAGR) from 2018 to 2023 will reach 84.6%, which is higher than the 78.3% growth rate of the global market.
Therefore, after the issuance of the 5G license, the largest application in the first stage scenario is the VR/AR industry, which is a trillion-level industry. After the breakthrough in the technological update of the AR micro-display, optics, and sensory interaction sectors in the industry chain companies, manufacturers begin to actively deploy AR mass production capacity, Besides, they also continue to focus on themed investment opportunities of VR/AR equipment producers, immersive game development, and leading operators in the second half of the year.
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