Statistics show that in the first quarter of 2026, the overall domestic XR market in China reached sales of 190,000 units, marking a 63% year-on-year increase. However, influenced by the industry's traditional off-season and fewer new product launches, sales experienced an 11% sequential decline. A breakdown by category reveals that consumer-grade AR device shipments, totaling 164,000 units, served as the core growth driver, surging 111% year-on-year. The pace of technological updates in the sector is accelerating, with brand and ecosystem competition intensifying. In contrast, the VR market, squeezed by the rapid adoption of AR products and market diversion, saw continued decline in consumer demand, with quarterly sales falling 42% sequentially. However, the commercial B2B segment performed steadily, with demand steadily emerging in professional scenarios such as corporate training, medical simulation, and large-scale VR experiences. The industry is leveraging the maturation of B2B application ecosystems to empower and drive the cultivation and penetration of the consumer market.
I. AR Market: Accelerated Technology Iteration and Intensifying Ecosystem Competition Optics: Data indicates the market share of optical waveguide solutions in China's domestic AR market significantly increased in Q1 2026, rising from 15% in the same period of 2025 to 43%, becoming the core force driving the expansion of the AR market scale. The share of traditional Birdbath solutions decreased from 84% to 56%, as their functional limitations and insufficient immersive experience became increasingly apparent. Display: Micro LED, leveraging its practical advantages for all-day wearable use and supported by increased market deployment from terminal brands like Rokid, saw rapid sales growth in the AR glasses category, forming a dual-technology development pattern alongside Micro OLED. Specifically, Micro OLED held a 57% share, dominating the mainstream market in Q1 2026. It is primarily used in split-type headsets for video viewing. Although a small number of new models were launched in the quarter, overall deployment volume was limited. The core strategy relied on continuous price reductions for popular flagship models, effectively stimulating market demand and ultimately driving a 40% year-on-year sales increase. Brands: In Q1 2026, Thunderbird led the domestic consumer AR market with a 26% share, with its Air 4 Pro split-type headset continuously capturing market share through high cost-effectiveness. Rokid, relying on the market breakthrough of its integrated Rokid Glasses, ranked second, narrowing the gap with Thunderbird to 4 percentage points. The industry has formed a direct competition between integrated and split-type product lines. XREAL, Quark, and VITURE ranked third to fifth respectively. Each brand is seeking new growth points through technological iteration: XREAL and VITURE focus on the mid-to-high-end split-type headset market, while Quark concentrates on optimizing waveguide displays and upgrading product experience, carving out a differentiated development path.
II. VR Market: Rising Storage Costs May Lead to Price Hikes for All-in-One VR, Sustaining Sales Pressure Technology: In China's domestic VR market for Q1 2026, Fast LCD, with its mature cost control and production capacity advantages, firmly dominated the mid-to-low-end VR market with a 95% sales share. Micro OLED VR products targeting the high-end market continued to decline, with their sales share contracting to 4%. Influenced by rising memory prices, the cost of all-in-one VR terminal products increased in 2026, and overall market sales are expected to continue facing pressure. Brands: In Q1 2026, Meta's market share in China rose to 52%, surpassing PICO's 32%. Flexible price adjustment strategies were key to this shift. Meta increased prices for its Quest3/3S series products starting April 19th, which may continue to alter the competitive landscape. PICO is seeking to regain market competitiveness by enhancing its content ecosystem, strengthening game content partnerships, and upgrading social features.
III. Silicon-based OLED Industry: Rise of Domestic Manufacturers and Intensifying Technology Competition Among suppliers of Micro OLED displays for domestic XR products in Q1 2026, SeeYA Technology held a 51% sales share, maintaining growth for nine consecutive quarters. Sony's share declined to 49%, urgently needing to break through development bottlenecks in the high-end market. BOE, leveraging its complete LCD/OLED supply chain resources, is entering specific segments with differentiated strategies to steadily expand its market presence. In terms of product size, 0.5-inch to 0.7-inch panels accounted for 91% of Micro OLED-based XR devices, representing the mainstream industry specification. Popular models like the Thunderbird Air 4 Pro and XREAL 1S utilize this panel size, contributing significantly to market sales.
IV. Investment, Financing, and Ecosystem Building: Capital Concentrates on AR, Major Funding Focuses on Startups, Accelerating Market Entry This quarter's industry investment and financing focused on consumer-grade hardware, characterized by deep scenario cultivation and collaborative industrial chain development. Companies like Thunderbird, VITURE, XREAL, Yingmu, and Shanjite are deeply engaged in various segments such as consumer AR headsets and smart wearable glasses. Liangliang Vision focuses on the R&D and deployment of industrial-grade smart glasses. The industry is forming a diverse ecosystem where the general consumer market and vertical industry scenarios develop synergistically. Concurrently, the industry's capitalization process is accelerating. XREAL submitted a listing application to the Hong Kong Stock Exchange this quarter, and it is anticipated that more leading AR manufacturers will advance IPO plans, helping the industry transition fully from the technology exploration phase to large-scale commercial deployment. It is predicted that with the further adoption of optical waveguide technology and improvements in Micro LED mass production capabilities, the AR industry will achieve multi-technology integration, broader application scenarios, and continued penetration into the mass consumer market in the second half of 2026, propelling the entire XR industry toward a new stage of all-scenario intelligent interaction.
Comments