With Apple entering the virtual and augmented reality race with its newly announced $3,499 Vision Pro headset, its success in Asia — a key market for VR — will be closely watched.

While VR remains a niche interest outside gaming in much of the world, in Asia the technology has found favor with a wider range of users and sectors — including education — with Japan, South Korea and China ranking among the most advanced markets for headset adoption. According to Statista Market Insights, in 2023 the top three markets by value are the U.S., China and Japan.

Underlining the region’s importance, Apple will base half of its six Vision Pro developer labs in Asian cities: Tokyo, Singapore and Shanghai.

The Vision Pro, which incorporates both AR and VR features, resembles ski goggles and allows the user to control apps through hand gestures and eye movements, watch movies and make phone calls. Some are speculating that the device could have the same transformative impact as the iPhone.

But Apple will be coming up against a number of established players.

Globally, Meta has so far dominated the VR market with its headset offerings, following an uptick in demand during the pandemic, and companies including Sony have sought to make inroads with their own hardware offerings.

China’s ByteDance, which acquired local firm Pico as an entry point into producing VR devices, has also sought to put its stamp on the market.

Apple’s emergence in the space is only likely to ramp up competition further. As such, the Vision Pro’s performance in Japan, the world's third-largest gaming market and a key country for Apple, will be particularly revealing.

Sam Byford, a Tokyo-based writer for the tech publication Multicore, said that Apple has a large fanbase in Japan that stems back decades, but the weakened yen may hamper the Vision Pro’s attractiveness.

The Vision Pro will debut in the U.S. in early 2024 and won't be available in other countries until later in the year, and if the weak yen trend continues, consumers in Japan could pay significantly higher prices.

“The price is going to be even more of a tough sell for Japanese people than people in other countries — $3,500 works out at around ¥500,000 right now,” Byford said. “Imagine if they announced the U.S. price as $5,000.”

Also, given VR devices are not currently mainstream products, there is the question of whether Apple is right to enter the space.

Nevertheless, some industry observers have said the move suggests a confidence that the tech is here to stay.

Harmeet Singhwalia, senior analyst at Counterpoint, said that regardless of the price, the Vision Pro demo — which emphasized business and cinematic applications — offered a new mainstream vision for how AR and VR will be used.

“It’s not just about gaming or content but a much broader use case. Longer term, this is the next personal computing device, and it’s already generating excitement for the segment as a whole,” he said.

Apple typically does not attempt new technology, Byford said. Instead, “they tend to kind of look at how the market shakes out and then offer their own spin on it.”

“I think they've been looking at the VR market, the AR market and waiting and iterating and deciding when to enter it. Ultimately they see that this technology is not going away,” Byford said.

In Asia, VR has already been applied across a number of industries, from finance to education.

In Japan, where absenteeism is a growing issue, some schools have harnessed VR to encourage students — particularly those who live far away — to attend. Meanwhile, the Pohang University of Science and Technology in South Korea aims to become a "metaversity" based on digitalized training.

Singhwalia says that further refinement of the tech will lead to the emergence of a wider range of uses for VR.

“As the technology evolves to resolve issues like bulkiness and eye strain, I think we’ll see it used much more frequently for things like training and other enterprise applications,” Singhwalia said.

In Asia, part of the success of the VR segment has been driven by supportive government initiatives that have sought to invest in training, industry development and production.

In November 2022, China’s Ministry of Industry and Information Technology released a VR action plan, aiming for the sale of more than 25 million devices, with the industry value exceeding 350 billion yuan ($48.2 billion) by 2026. VR has also been included as one of the “key industries” for China’s 14th Five-Year Plan, which called for local governments to encourage industry growth.

Singapore launched a $5 million AR studio last year, while the same year Japan emphasized the importance of the metaverse — an interactive vision of the internet — with Prime Minister Fumio Kishida promoting this under his efforts to expand services, known as Web3, underpinned by blockchain technology.

South Korea’s science ministry, meanwhile, plans to invest 223.7 billion won ($166 million) in order to develop a metaverse ecosystem, with training a focal point of the strategy, and will support the development and commercialization of VR and AR technology.

Analysts project economic gains from both technologies — by 2030, Japan is expected to see a 2.00% increase in its gross domestic product, according to a PwC report in 2020, while China is forecast to witness a GDP boost of 2.09%.