Sat. Jan 22nd, 2022


Sony announced late last year that it had joined forces with Manchester City to develop a digital recreation of the team’s Etihad home stadium for fans around the world to visit virtually. It was a silent announcement, investors said, but the sound of football being sucked into the metavers was deafening.

Companies exhibiting at the Consumer Electronics Show in Las Vegas this week will be hoping for a similarly epic interpretation of their offerings. The aspirants include Samsung, which will give consumers the chance to decorate imaginary homes with digital versions of its home appliances. “This is no longer a fad, but a well-established trend of the future,” Samsung said. the metavers.

As another exhibitor put it, the metaverse – a striking term for the theory that people will spend ever larger portions of their lives in ever more immersive virtual worlds – does not have an exact enough definition for anyone to claim that they are a viable game on it.

But for many, the parameters are already sufficiently clear to project a large demand for certain products. In particular, the manager of a large global technology fund said, 2022 could be the first year in which investors, after decades of disappointment, consider virtual reality headsets more serious.

“Investors need to think of the metaverse as nothing less than the digitization of human activity and the disruption of everything that has not yet been disrupted,” said Simon Powell, a stock strategist at US investment bank Jefferies. He noted that metaverse projects such as those between Sony and Manchester City would join an almost constant stream of real-life activity reflected in a virtual space.

The process, he said, would eventually require more processors, significantly more computing power and portable devices that would drive a wave of hardware demand comparable to the early years of smartphones. The manufacturers of components such as semiconductors, servers, sensors, cameras and exhibits will benefit.

“Think back to the early days of the mass market internet investment gold rush. “The best bets in those early stages were on the hardware – the picking and digging,” Powell said.

Million unit bar graph showing global virtual reality and augmented reality headset unit sales

Apple’s $ 3tn market valuation, Powell added, could already be fueled by speculation that it was close to unveiling a headset as revolutionary to consumer technology as the original iPhone.

The significant rise in the share prices of US chipmaker Nvidia and Taiwan’s TSMC has suggested that a meta-driven bet on the demand for raw computing power and cloud storage is already filling up, said technology analyst Damian Thong at Macquarie in Tokyo.

A recent note by analysts at Citigroup has identified a dozen stocks, including Taiwanese server designer Wiwynn and Chinese manufacturer of acoustic components, GoerTek, whose products may also be in high demand thanks to metaverse applications.

For Japanese and Korean companies that are not yet on such lists, the building excitement surrounding the metaverse represents an urgent call for arms.

“Many Korean CEOs have a sense of crisis that they will fall behind if they do not adapt to technological change. . . therefore, they are likely to be the early adopters of the metaverse, ”said Choi Joon-chul, CEO of VIP Research and Management.

Korean gambling and entertainment companies have already begun buying film production and software companies to enhance their visual effects and make their products more suitable for the metaverse, according to James Lim, an analyst at US hedge fund Dalton Investments.

“Com2uS acquired WYSIWYG Studios. Hybe has invested in Won4bn [$3.3m] in Giantstep. “They try to get software companies that can make graphics quickly if they have strong content,” said Lim.

Zettabytes bar graph * showing global amount of data created, consumed and stored

For consumers, the type of hardware purchases they make will depend on how they use the metaverse – whether for virtual offices or to attend live concerts performed in video games, investors said. How captivating the metaverse can become will depend on the quality of the virtual reality involved, Choi of VIP Research and Management said.

“3D TVs were launched with great fanfare, but the demand for the product dropped. The metaverse requires more upgraded graphic technology to enhance the sense of reality. For example, the metaverse experience provided by Naver’s Zepeto platform does not really feel enough yet, ”he added.

Arthur Lai, a technology analyst at Citigroup, said investors should accept that the metaverse will significantly affect the way people consume and interact with social media and entertainment. Smartphone, computer and physical interactions can be replaced once technological sensitivity to voices, eyeball movements and gestures and headsets progresses lose their reputation as “stupid and heavy”.

But that will not happen right away. Even according to the most optimistic manufacturers, the headphone market will be behind smartphones for years, Lai said. “But it is not about virtual reality versus the smartphone. It’s about a general move of smarter gadgets that are becoming more complementary. “

VR headsets used on the Steam gaming platform in 2021

There are different theories as to what type of metaverse experience would eventually dominate. Metaverse experiences can cover a range of virtual reality to augmented reality, mixed reality and augmented reality (XR), which includes content that is fully synthetic to synthetic content that interacts with the real world.

Either way, Lai said, investors looking at component manufacturers should expect at least 15 cameras and sensors to be fitted to future-generation headsets.

The development of smaller, more powerful batteries that last longer will make headpieces lighter and more comfortable to wear for long periods of time, a major obstacle with current products. Outstanding names include Google is Oculus series, Sony’s micro-OLED screens, which analysts expect to be central to Apple’s future glasses or spectacles, and the Taiwanese optical lens manufacturer Genius, Lai said.

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Lee Kyung-hak, CEO of Warp Solution, a Korean manufacturer of wireless charging devices for head-mounted screens, said demand for metaverse applications will increase in the second half of the year, and mass consumption could occur by 2023.

“But the metaverse has a lack of deadly content, so people are not that interested in it yet,” Lee said, with the projection that the field is unlikely to move cell phones within the next 10 years.

Ultimately, the development of the metaverse will depend on the next generation of personal VR, AR and XR devices, said Kim Young-woo, an analyst at SK Securities. They rely heavily on Dram chips and image sensors, sectors in which Korea’s Samsung, SK Hynix and LG Innotek are world leaders.

South Korean companies are not directly producing devices to enter the metaverse, with Samsung halting production of a VR device in 2019 due to low demand. “However, companies like Samsung can quickly launch a new device to catch up, if there is enough demand,” Kim said.



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