Canalys (www.canalys.com) predicts vendors will ship 6.3 million virtual reality (VR) headsets worldwide in 2016, of which 40% will be in China.

VR has the potential to thrive in the country and the research group believes competition will be fierce this year. Barriers to enter the VR market have been lowered. Local vendors are releasing VR headsets that overcome the quality and performance issues of simple viewers, such as Samsung’s Gear VR and Google’s Cardboard. 

“The competition is around the user experience, hardware quality and content,” says Canalys Analyst Jason Low. “Currently, there isn’t a clear leader for VR content in China. Local content providers, game publishers and service providers are racing to exercise their influence on the development of VR beyond hardware. Numerous Chinese vendors are exhibiting their VR headsets at CES Asia 2016 this week. Attendees are willing to suffer long queues to experience the VR demonstrations. Leading Chinese vendors such as DeePoon, Pico, Pimax and Idealens are attracting the most interest from consumers.”

CES Asia has become a great platform for local VR vendors to demonstrate and let users try their products, but it’s still a huge challenge to translate that into product sales and the creation of content, he adds. Canalys believes that though inexpensive, simple viewers appeal to many consumers, vendors must look beyond these to more advanced VR headsets, where the longer-term opportunity lies.

Canalys defines a VR headset as a “device with a display designed to be worn on the face that immerses the viewer in a virtual world.” This definition includes smart and basic headsets, but excludes simple viewers that do not perform any computing (and are thus not devices), such as Samsung’s Gear VR and Google Cardboard.